The Industry demand has changed due to a shift in consumers’ attitudes towards healthier products. This placed Starbucks’ coffee culture at risk and threatened the company’s future. Starbucks has tailored their menu to include more organic and healthy product mixes, venturing into tea, bread and fresh juice products (Geereddy, n.d). Starbucks’ cornerstone product differentiation strategies and Human Resource Management are the main impacts to strategy formulation. Starbucks’ is a premium valued brand; costly to imitate.
The aggressive growth rate of stores across the world had a ripple effect which led to Starbucks undergoing multiple changes: a. Globalization – The number of retail stores were 5000 and counting. It also started experimenting with new retail formats such as ‘drive-throughs’. Around 15% of its revenue came from non-company operated retails channels, known as ‘Specialty Operations’ which included international licensed stores, grocery stores, warehouse clubs and online mail-order sales. The goal was simple – reach customers where they work, travel, shop and
Starbucks should ensure prices in international market are not inhibitive to customers and will allow them to have an increased market share and augment sales. This will also allow the company to face threats from other brands that have taken advantage of Starbucks high-pricing mainly McDonalds through McCafe. Innovation and addition of new products at Starbucks to augment the Starbucks experience and increase client loyalty is the other recommendation for Starbucks. This is aimed at overcoming increased competition from Dunkin Donuts and McDonalds. The threats in the operating environment can also be overcome by differentiating products offered at Starbucks from those of the competition in terms of better quality, impeccable service delivery, and augmenting customer service and quick response to queries.
Product: Starbucks mainly specialized in coffees and but also sells other beverages such as premium quality teas, ice-blended beverages, pastries and some of their merchandise like for instant tumbler and mugs. They still continued to innovate more of their products to cater to attract more people to buy their product. For example, in 1994, Starbucks starting selling Frappuccino at their store. Price: Starbucks announced in 22nd September 2010 that there will be an increase of prices for their beverages due to the increasing prices of raw materials such as coffee beans. They tried to maintain the prices to make it affordable to everyone.
Starbucks Coffee Company, founded in 1971, has grown to an international brand. As the world’s biggest coffeehouse company, Starbucks continues to lead the industry in sustainable business and innovation. Such success is attributed to the firm’s ability to address the external PESTEL/PESTLE factors. The PESTEL/PESTLE analysis framework indicates the most significant influences on Starbucks based on characteristics of the remote or macro-environment. Despite its current industry leadership, Starbucks must continue monitoring its remote or macro-environment.
As Starbucks imports coffee from frequent countries they have to be aware of changing imports laws. And the Inflation rate affects a lot
Starbucks sees the advantage of turning to local partners as the most effective way to reach out to their target and consumer market. If Starbucks were to do this by itself, it would be very difficult for them to face the bureaucracy, infrastructure, distribution, business practices and challenges, therefore it would be a great
Executive Summary Starbucks is an American coffee chain that began operating on the 31st of March 1971. Since then they have grown and expanded to over 24 000 outlets globally. Starbucks has a extensive Corporate Social Responsibility (CSR) programme. They are committed to Ethically and Sustainably 1Sourcing their Tea, Coffee and Manufactured Goods. This means that they hope to reach their goal of 100% ethically sourced cocoa, 65% ethically sourced tea and manufactured products by 2020.
Starbucks is able to give this lifestyle the quality experience that has attracted such a market in the United States, people are able to enjoy a luxury coffee in the store, but also on-the-go. However, Chinese consumers of Starbucks have different tastes, “they value space and couches on which to relax in the afternoons” (Burkitt). So in order to address these desires, Starbucks is adding stores that have 3,800 square feet that can accommodate large groups of friends, family, and businesses employees coming together for the afternoon. The company is also not also relying on income rises in households to attract the Chinese to Starbucks; they are relying on lifestyle in the emergence of a shifting lifestyle. In order to attract the rising Chinese population too openly or subconsciously identify to more “cosmopolitan tastes” they have adjusted the store layouts in accordance to culture and aesthetical appeal of the geographic location.
Starbucks is an American company that was established in 1971 in Seattle, WA. Starbucks is the leading roaster, maker and retailer of special coffee around world. Starbucks employed more than 182,000 employees across 19,767 branches operated & licensed stores in 62 countries. They do the purchasing and roasting of high-quality coffees that they sell, along with handcrafted coffee, tea and other beverages and a variety of fresh food items, through company-operated stores. The company also sells different types of coffee and tea products and licenses their trademarks through other channels such as licensed stores, grocery and national foodservice accounts.