Starbucks Coffee Industry Analysis

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a. Introduction about the industry and why quality is important there. Starbucks is one of the firstly operates and contend in the retail coffee and snacks store industry. This industry experienced a prime drop in 2009 according to the economic crisis and change in customer tastes. The coffee industry had a decade of growth consistent. According to the economic decline, customers spend less money on luxuries like eating in cafe and restaurants; this led to choose to pay low-price products instead of expensive coffee drinks due to reduction budgets. The coffee industry developed at a minimum annualized rate growth rate of 0.9% from 2008 till 2013 with current industry revenues at $29 billion in the US. The industry is now forecasted to rise…show more content…
Therefore, coffee bean requirements are increasing each year. Starbucks recognizes that coffee beans used in its products is a major operational risk factor. Accordingly, the company's margins depend heavily on the price of its coffee bean inputs, and serves as its main cost driver. Furthermore, climate change has posed a serious threat to coffee production. The increase in average temperatures and the turning of rainy seasons destroy large parts of farmers' yields and impede the overall yield of coffee. • Competitors The main potential challenges facing Starbucks are increasing competition from other retailers with similar concept of products. These competitors are able to stand out in the markets to generate customers. The main competitors are Dunkin Donuts, McDonald’s and Costa. It is essential for Starbucks to know their rivals and what they are currently doing to gain completive edge over them. Starbucks should be able to defend its position against other retailers and do various initiatives and activities to maintain its brand advantage. Objectives Objective of the…show more content…
They ensure to get the best coffee beans that grow at higher altitudes, where they are denser and have deeper and more complex flavors, tasted in each cup of Starbucks coffee. According to (Linn, 2014) "there is a lot of specialty coffee out there; it's just a matter of finding it." Starbucks employs a wide range of specialized agricultural engineers to grow coffee beans in a better way, where they deal well with crop production and soil management. Starbucks collaborates with them to promote growing practices and improve the quality and size of their crops. To improve productivity and sustainability, Starbucks has established farmer support centers on four continents. These centers directly support improving farmers' livelihoods and ensure long-term supply of high-quality coffee for the industry. The agricultural engineers test soil, study samples and provide free advices to any farmer who asks in this field. The company makes sure that the coffee farmers reduce from agrochemical use, so to be able to continue to produce high quality coffee in the coming years. She added ‘’you can’t have a sustainable farm if you mistreat workers and mistreating the environment.’’ Starbucks strives to solve future supply problems and improve the quality of life for farmers and coffee workers. All suppliers are rewarded for the continuous improvement of social and environmental practices, where it

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