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 industry size and consumers needs are impacted by social or customer related factors (Contributor, 2015). The main customer related factors affecting Starbucks and its competitors include, economic conditions and customer attitudes, specifically towards Lifestyle and Taste. One of the main demand drivers in the Industry is disposable income, which is significantly influenced by economic conditions. Positive economic conditions increase industry demand and per capita coffee consumption. The Industry demand has changed due to a shift in consumers’ attitudes towards healthier products.
The company’s revenues have grown at an average annual rate of 9.2% in North America from 2010 to 2013, and 22.4% in China and the Asia Pacific. The company is looking to expand aggressively in this region. Its operating margins, are not as high as they could have been, because it did not franchise a sizable number of its stores, but are still healthy and established, keeping in mind that the effects of the 2008 financial crisis have yet not vanished. Starbucks falls under another league altogether: its main offering, coffee, is frequently touted for health purpose. The
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.
Furthermore, Starbucks had difficulties when they tried to expand their company and introduce it to outside the Pacific Northwest such as in cities like Chicago, Illinois and Portland Oregon. When Starbucks entered the Chicago market, they had issues gaining customers in their stores. This was partially caused by the insufficiency of experienced store employees and managers. Costs also impacted the expansion of the brand. The cost of supplying coffee to the Chicago stores were also part of the issue as it was costly.
“Starbucks has always been about so much more than coffee.” (Shultz and Gordon, 2011, p.4). Starting from a small coffeehouse in Seattle’s Pike Place Market, it is now the global leader in specialty coffee consumption. Starbucks has about 182,000 employees across 19,767 company operated & licensed stores in 62 countries (Starbucks Corporation, 2013). Their product mix includes roasted and handcrafted high quality coffee with a premium price, tea, fresh juices, different types of cake and cookies and other beverages and food items. (Larson, 2008, p.21) stated that “Looking at the characteristics of a company pursuing the generic strategy of focus,…, it would involve a combination of the characteristics of the differentiation strategy directed toward a specific consumer segment.” In the case of Starbucks, they targeted wealthy consumers who wouldn’t mind paying extra for
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.
After he is already has more than 21000 chains in more than 65 countries. He wants to open new shop in Italy where people prefer to enjoy natural and fresh coffee instead of quick coffee. His leadership analysis - Opportunities His company has relations outside so that Starbucks is well known by people and these thoughts of leadership make his company better. 1. Embrace social media Starbucks uses Instagram to advertise its brand.
But in 1987, Howard Schultz decided to buy Starbucks from its original owner for $4 million when he found out that Starbucks is profitable. However, his plan for Starbucks is to start off and to grow their revenue slowly. A few years later its revenue grow drastically, Starbucks began to open more stores locally and in 1996, it began expanding their business internationally to 60 countries. As at 2012, Starbucks successfully operates 20,300 stores worldwide. Outside of North America, Singapore became their third country to introduce their business on 14 December 1996.
1. Introduction Starbucks logo has evolved during the 40 years that the company existed. Its colour and shape changed, but the central figure, the siren, remained. The current version of the logo was created in 2011 with the help of Lippincott, a branding firm. The target audience of Starbucks is the middle class, the company’s development strategy and branding (the logo being a huge part of it) are designed to attract that audience, and so far the company has been successful in doing so.