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.
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 creation of a simple and comprehensive logistics system was fundamental for the company because it allowed it to optimize the management of its extensive supply chain. Normally Starbucks brings coffee beans from Latin America, Asia, Africa, Europe and the United States into shipping containers; from the port of entry, this grain (unroasted) is sent by truck to six storage points and after this input is toasted and packed, the finished product is transported by truck to the distribution centers (whose areas are between 200 thousand and 300 thousand square
Customers appreciate its ethical sourcing of raw materials and are happy to pay more for Starbucks products. Even though the company does not hold the first place in the UK market, which is held by Costa Coffee, they have acquired a strong customer base of students, as well as their normal target group of working class. Based on the findings from the Marketing Mix, Starbucks has successfully created value for their customers. (Shubber, 2015) They have succeeded in growing their cafes into experience and a place for people to meet to spend their time. In the recent years Starbucks has expanded their sales channels from cafes to smaller pop-up units inside shopping areas, bookstores, college campus and airports.
This job complexity was compounded by the fact that almost half of Starbucks’ customers customized their drinks. This was directly co-related to the increase in employee turnover. To summarize, the rather potent combination of new customer segments, product / service complexity and increased workload on the baristas led to the decrease in customer satisfaction scores. The need of the hour was a new and accurate CSAT measurement system which takes into account the diversified customer base (and their separate needs/expectations from the brand). The aggressive growth rate of stores across the world had a ripple effect which led to Starbucks undergoing multiple changes: a.
Originally, Starbucks was a trendsetter with its unique brand positioning and differential values. It offers not only food and services, but most importantly, experiences. Starbucks can gain high customer motivation to pay with relatively low cost and earn reasonable profits. Its "non-brand" decisions, such as licensing arrangements, store locations and drive-through service, may financially make sense over a short period of time (Ferrell and Hartline, 2014, p. 527- 528). However, such short-term financial growth is in sacrifice of brand positioning and equity in the long term.
The main reason for this is the fact that it operates in the Food and Beverages space which means that despite the recession, consumers cut down on the consumption to a certain extent and not completely. Therefore, the task before Starbucks is to lower costs and increase the value so that it retains its consumer base and attracts consumer
\ 5. Market Structure According to Pitek (2009:4) they have possessed the capacity to make a standard for their espresso and in which they require their client base to be misrepresented costs for a measure of their different mixes. With use of the Starbucks logo, quality, and different trademarks, they separate their espressos their rivals. Starbucks prides itself on being totally not the same as some other café and its rivals, which is a motivation behind why Starbucks has turned out to be so fruitful. The organization's procedure to concentrate on their centre abilities to separate themselves has made Starbucks into an espresso powerhouse.
Assignment 1 1) Firm’s orientation Starbucks is a market orientated company that delivers what customers want and the drawback for that is high prices when compared to other coffee shops. In Starbucks the customer is expected to have the chance to customize his/her order according to his/her needs. Moreover, for more customer satisfaction Starbucks have provided a secret menu for even more compatibility with customer needs. 2) Mission statement “To inspire and nurture the human spirit – one person, one cup and one neighborhood at a time.” 3) Objectives + critique the objectivies Objectives Starbucks objectives are categorized in different standards and scales. Coffee purchasing – That ensures 100% of the coffee is sourced.