essay about starbucks company

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Strategic and competitive advantages

The early years, the howard schultz era, schultz steps down, but not for long, revolving door of ceos.

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Starbucks is an American company that operates the largest coffeehouse chain and one of the most recognizable brands in the world. Headquartered in Seattle , Washington, the company operates more than 35,000 stores across 80 countries (as of 2022).

Although Starbucks was not the first major coffeehouse chain in the U.S., it was the first to both popularize and mass-distribute a particular brand of café culture . Starting in the 1990s, Starbucks began promoting coffee as a holistic experience that combined ambiance, community, function, and lifestyle. By transforming people’s perception of coffee and coffeehouses, Starbucks achieved outsize growth and established itself as one of the most dominant names in the coffeehouse industry.

Starbucks’ dominance among coffee retailers can be traced to several key strategic initiatives and competitive advantages, including:

• Promotion of coffee as a social and cultural experience. By focusing on the quality of its coffee beverages and the ambiance of its coffeehouse environment, Starbucks was able to reframe coffee as an affordable luxury that can be enjoyed in a social space, or a “third place” away from home and work. Starbucks cafés became a popular space for social gatherings, small business meetings, studying, and working. Starbucks gained a first-mover advantage in the café market by being among the first to curate, define, and mass-distribute its own brand—of coffeehouse culture.
• Saturation strategy. Starbucks deployed a saturation strategy based on factors such as population density, income levels, proximity to other businesses, amenities, and competition, and overall foot traffic patterns. This helped Starbucks achieve geographical dominance without market cannibalization (i.e., new Starbucks outlets taking business from existing outlets).
• Product innovation. Starbucks has consistently experimented with new product offerings and flavors. The company’s Tryer Center, located in Seattle, Washington, is its main “innovation lab,” where it develops and tests new products and services.
• Vertical integration. Unlike many of its direct competitors, Starbucks’ coffee supply chain is vertically integrated from coffee estate, to roasting, and into a beverage cup. This allows Starbucks to exercise greater control over costs, processes, and quality. It also helped establish the company’s global economies of scale .

Starbucks was founded by Jerry Baldwin, Gordon Bowker, and Zev Siegl, opening its first store in 1971 near the historic Pike Place Market in Seattle . The three Starbucks founders had two things in common: they were all coming from academia, and they all loved coffee and tea . They invested and borrowed some money to open the first store in Seattle and named it “Starbucks” after the first mate, Starbuck, in Herman Melville ’s classic novel Moby Dick .

Alfred Peet, a coffee-roasting entrepreneur, was a major inspiration to the founders of Starbucks. Peet was a Dutch immigrant who had begun importing fine arabica coffees into the United States during the 1950s. In 1966 he opened a small store, Peet’s Coffee and Tea, in Berkeley , California, that specialized in importing first-rate coffees and teas. Peet’s success encouraged the Starbucks founders to base their business model on selling high-quality coffee beans and equipment, and Peet’s became the initial supplier of green coffee beans to Starbucks. The partners then purchased a used roaster from Holland, and Baldwin and Bowker experimented with Alfred Peet’s roasting techniques to create their own blends and flavors.

By the early 1980s Starbucks had opened four stores in Seattle that stood out from the competitors with their top-quality fresh-roasted coffees. In 1980 Siegl decided to pursue other interests and left the two remaining partners, with Baldwin assuming the role of company president.

In 1981 Howard Schultz , a sales representative for Hammarplast, a Swedish company that made kitchen equipment and housewares from which Starbucks bought drip-coffee makers, noticed how large the company’s orders were, which prompted him to pay it a visit. Schultz was so impressed that he decided to pursue a career at Starbucks, and he was hired as the head of marketing in 1982. Schultz noticed that first-time customers sometimes felt uneasy in the stores because of their lack of knowledge about fine coffees, so he worked with store employees on developing customer-friendly sales skills and produced brochures that made it easy for customers to learn about the company’s products.

Schultz’s biggest idea for the future of Starbucks came during the spring of 1983 when the company sent him to Milan to attend an international housewares show. While in Italy , he was impressed with the country’s cafés and discovered that Milan alone boasted 1,500 coffeehouses. Inspired, he thought of doing something similar in Starbucks and envisioned turning a tiny regional operation into a national coffeehouse chain via rapid store expansion. However, Baldwin and Bowker were not enthusiastic about Schultz’s idea, as they did not want Starbucks to deviate much from its traditional model of business. They wanted Starbucks to remain strictly a coffee and equipment seller and not turn into a café that served espressos and cappuccinos.

Essentially, while Baldwin and Bowker homed in on coffee as an artisanal “product,” Schultz envisioned it as a medium for social connection and interaction (i.e., “coffee culture”). This distinction bore profound implications from a market perspective: Branded products can engender loyalty, but the appeal for branded experiences can be localized, customized, and ultimately, self-generated or customer-driven (what would later be referred to as “brand tribalism”).

Seeing that he would not be able to persuade Baldwin and Bowker to embrace the café idea, Schultz left Starbucks in 1985 and started his own coffee chain, called Il Giornale, which was an immediate success, quickly expanding into multiple cities.

In March 1987 Baldwin and Bowker decided to sell Starbucks, and Schultz was quick to use Il Giornale to purchase the company with investor backing . He combined all his operations under the Starbucks brand and committed to the café concept for the business, with additional sales of beans, equipment, and other items in Starbucks stores.

Under Schultz’s guidance, in four years the coffeehouse chain grew from fewer than 20 stores to more than 100. Starbucks entered into a meteoric period of expansion that continued after the company went public in 1992. In 1996 it began opening stores outside North America , and Starbucks soon became the largest coffeehouse chain in the world. By the end of the decade, Starbucks had some 2,500 locations in about a dozen countries.

Schultz announced in 2000 that he was stepping down as CEO but would remain as chair. By 2007 the chain boasted more than 15,000 locations worldwide, but it also began foundering with regard to customer satisfaction, brand focus, and employee morale. This prompted Schultz to return to the helm as Starbucks’ CEO in January 2008.

Several factors contributed to Starbucks’ continuing decline in 2008. The most prominent were likely the economic environment leading up to and following the Great Recession , over-expansion leading to cannibalization, and increased competition from other coffeehouse chains and fast food restaurants, such as McDonald’s , which began serving a more diverse range of coffee beverages.

In response to the company’s challenges, Schultz oversaw the closure of 900 stores and implemented an ambitious strategy to secure new avenues of growth, which included acquisitions of a bakery chain and the makers of a coffee-brewing system as well as the introduction of an instant-coffee brand. He also oversaw changes to menu offerings at Starbucks stores; Starbucks had begun selling food in its cafés in 2003. These moves were largely successful, and by 2012 Starbucks had rebounded financially.

Schultz again stepped down as CEO and was replaced as CEO by Kevin Johnson in 2017. Schultz continued to be active in the company, serving as executive chairman until 2018, when he was replaced by Myron Ullman.

Meanwhile, the company’s global growth strategy continued. The world’s largest Starbucks, a Starbucks Reserve Roastery, opened in Chicago in 2019. By 2021 Starbucks had a presence in dozens of countries around the globe and operated over 32,000 stores.

During this time, however, Starbucks began to face various challenges. Notably, workers at several of its stores began to unionize, despite opposition from the company. In addition, the COVID-19 pandemic and related supply-chain issues had a negative impact on sales, especially in China , one of the company’s key markets. In 2022 Johnson abruptly departed, and Schultz returned as interim CEO.

Later that year Starbucks announced that it had hired Laxman Narasimhan, who would replace Schultz in 2023. Although Schultz had handpicked Narasimhan as his successor, after a period of languishing sales and challenges with speed of service, particularly among mobile order pickup customers, in May 2024, Schultz sent an open letter to the board, highlighting the need to fix certain customer service practices in order to “win back customers.”

In August 2024 Narasimhan was ousted as CEO and by the following month would be replaced by Brian Niccol, who was at the time CEO of Chipotle Mexican Grill (CMG). Shares of Starbucks rose 24.5% on the announcement, the largest one-day move in company history.

Starbucks Coffee Business Evaluation Essay

Introduction, an economic assessment, a marketing assessment plan, a financial plan, an organizational structure recommendation, supporting rationale.

Starbucks started its coffee outlets in 1971 at Seattle. The founders of the company included Jerry Baldwin, Zev Siegel, and Gordon Bowker. Howard Schultz joined Starbucks in 1982 as the heading of marketing and overseeing retail division (Thompson and Gamble, 1997). Schultz had a different vision for the company.

He wanted to create a community of coffee consumers. Under Schultz’s leadership as the CEO and chief global strategist, Starbucks has become the world’s largest coffee retail outlet.

It is gaining international presence in most emerging economies due to reorganization of the company’s business strategy since 1987. Starbucks has grown as the premier coffee retailer with happy employees, quality coffee products and satisfied customers.

The report focuses on the Starbucks’ Global Quest 2006: Is the Best Yet to Come? in order to develop a strategic management proposal for the company’s board of directors. The proposal focuses on the future of the company through an economic assessment, marketing assessment plan, a financial plan, an organizational structure recommendation, and supporting rationale.

Today, Starbucks is a strong company in the US and other regions as shown through its success. Hence, the company needs to expand to other emerging markets. This expansion would require understanding of economic factors in the coffee retail business. The coffee retailer would be able to seize opportunities in emerging economies early enough to make it a market leader.

The BRIC countries would be critical for the Starbucks’ global growth in years ahead because of the large number of a growing middle class with disposable incomes. The expansion will ensure that Starbucks gets new customers, follows its global customers, and becomes cost-effective in its operations.

Although the company is already in some parts of the global market, it will have to consider economic factors as it expands into other BRIC countries because they could have both short-term and long-term effects on the Starbucks’ global quest. Specifically, Starbucks will evaluate inflation rates, tariffs, interest rates, monetary policies, economic growth, freedom of conducting business, and exchange rates.

In addition, the company will also have to evaluate unemployment rates in foreign countries, qualified labor, and labor costs. Still, the company will have to focus on changes in political leadership of various countries because these changes in leadership may or may not encourage foreign investments due to rigid policies.

Starbucks will evaluate entries into new markets. It shall have to consider a Greenfield foreign direct investment or a strategic alliance. Foreign entries would be easier through strategic alliances rather than a Greenfield investment.

In this regard, Starbucks would evaluate what other partners can bring to the business. Local firms already understand the local market, culture, and business activities than Starbucks. Starbucks will have to consider reputable firms in the coffee retail business, with good brand names, and firms that show strong relationships with coffee consumers.

Starbucks will also have to review its position in the global retail coffee market and available opportunities. The global expansion presents significant opportunities for the company in terms of revenue growth and customer retention. Starbucks can take the advantage of the growing middle class and create communities of coffee consumers around the globe.

The BRIC countries also have growing populations with large numbers of coffee consumers. On this note, it must focus on India and Brazil. However, Starbucks must account for consumers’ preferences in these countries.

The international coffee prices have risen considerably. This has attracted other big brands like McDonald’s into the retail coffee business. Starbucks must face fierce future competitions and fluctuating coffee supplies in the global markets. Any interruption could have negative impacts on the brand’s name.

In other words, the company must have reliable suppliers in order to cater for its globe strategies and a huge number of coffee consumers. The study shows that the Asian market is growing rapidly, particularly China. Starbucks must focus on expanding its outlets to other areas within China. This shows that economic elements favor the company’s growth strategies.

Although Starbuck is likely to face competitions in the future, effective global strategies will ensure that the company maintains its leadership position in new markets. Starbucks would achieve competitive advantages through its expertise, employees, and product positioning strategies. Conversely, Starbucks must note that international markets could be repulsive against high prices.

On this note, the company will have to review its premium coffee prices in order to meet the prevailing economic conditions of various countries.

The quest for a global strategy also involves considerable costs. The company will have to evaluate whether it is cost-effective to venture into some globe markets. It will also review entry requirements and any factors that could hinder its smooth operations.

From the Starbucks’ global quest, the growth has been impressive. The company’s goal would be to maintain its image in all markets in which it shall operate. Starbucks has recognized that it has a huge growth potential in oversea markets. For this reason, the company should accelerate growth, promote its brand, maintain its global leadership position, and become a globally respected brand.

The company must formulate new growth strategies and a marketing plan for the global market. Starbucks must look for strategies that would allow it to continue to explore new opportunities in foreign markets.

For instance, it can acquire small coffee shops in foreign countries and develop its brand. This strategy may help the company to avoid negative publicity or total rejection as witnessed in Primrose Hill, London (Kotha and Glassman, 2003).

The market analysis shows that Starbucks commands a large share of the market. Coffee retail business is likely to improve globally, and this presents a good opportunity for the company to grow too. The growth may even be resilient to changes in economic situations like recession. The company must continue to provide great services to its consumers in order to maintain them and attract new ones.

Starbucks will have to consider new products to cater for consumers who do not prefer dark roasted coffee. This would increase its customer base and revenue growths. However, this process requires a thorough market study. In the global quest, the company must maintain the design of its coffee outlets and its brand in order to provide consumers with the same environment available in the US.

The quest for the global market will require the company to differentiate its market. Marketing segmentation would ensure that Starbucks has different products for various coffee consumers.

Marketing segmentation would ensure that the company caters for low-income earners, students, and other consumers who may not be able to afford premium coffee. This is a strategic marketing strategy in new markets, which would ensure that Starbucks draw new consumers from various segments of the market.

The company will formulate new target market strategies in new locations. Starbucks must never forget that it will expand into emerging economies in which high prices may not attract its target consumers. The company will have to review its prices downwards in order to accommodate these segments.

Many consumers would like to have premium coffee, but high prices have been major hindrances. The company should diversify with regard to locations in order to accommodate majorities. Emerging markets have discerning coffee consumers, who may prefer good coffee but do not go for premium coffee due to pricing.

Starbucks will conduct a constant industry analysis in order to determine the rate of growth, competitions, and changes in external conditions. From the study, the coffee industry has grown steadily as global sales and revenues rise. The company must study the international patterns of coffee consumption in various locations in which it intends to run new outlets.

Although Starbucks holds the leading position in the retail coffee market, the company must understand impacts of competition on its business growths. It must understand the fraction of the market segment that buys from its competitors.

In new markets, Starbucks will outdo the small local brands. Although they present competition challenges, small local coffee outlets shall retain a small share of the market because small brands in foreign markets do not present biggest threats to Starbucks.

The case study shows that Starbucks has been able to establish close and intimate relationships with its customers. The company has been able to experience such a growth because of its employees, who have established close relationships with customers. Starbucks believes that happy employees lead to happy customers, increased revenues, and growth.

In this regard, the company should focus on quality coffee and services and implement favorable employment policies in all its global market outlets. The company believes that happy employees are critical for its success and competitive advantages. Therefore, the company must continuously review its employment practices and improve them if necessary.

This is a culture of empowering employees in order to ensure that they are productive. Starbucks employees in other parts of the world will have to receive generous compensations, training, and employee stock ownership just like others in the US.

The company will also focus on multiple channels of product distribution. In other words, Starbucks must rise above its stand-alone retail outlets and offer new areas of distributing coffee to its consumers.

Hence, it must consider other popular spots like supermarkets, airports, banks, and office buildings among others. The company will have to seek for strategic partnerships with service providers, suppliers, grocery stores, airlines, and other firms, which can distribute coffee to consumers throughout their designated areas.

The company will also improve its corporate social responsibilities, particularly in areas in which it sources its coffee. This is important for reducing the notion that Starbucks pays poorly to farmers (Kotha and Glassman, 2003). It will improve the focus on environments, workers’ welfare, and children’s rights.

Any controversies about the company’s interactions with these critical parts of the supply chain could damage its global reputation. For instance, there should be no negative publicity that the company exploits farmers while making huge profits from the same coffee. On this note, the company must improve its public relations and manage bad publicity, particularly by paying attention to the media.

The company will have to focus on the use of technology to retain its customers. In the future, many consumers will use technologies and social media for interacting and conducting online purchases. Online platforms will drive customers’ feedback and by extension customer service. They will be able to post and criticize the company openly.

The company will have to integrate effective online platforms and loyalty programs to drive customers to its outlets. Online platforms will also act as distribution channels for Starbucks. In addition, these are also strategies for improving customer loyalty, growing the brand, providing excellent values, and customer convenience. They also result in increased revenues and profits for shareholders.

Technology will be a differentiating tool for Starbucks. The social media, mobile apps, loyal cards, and e-gift cards will differentiate the company and drive the global growth for Starbucks ( Starbucks Unveils Accelerated Global Growth Plans , 2012). On the same note, Starbucks will use technologies to enhance efficiency in product delivery and develop quality products. It will invest in advanced coffee equipment.

These are coffee machines with precise technologies to maximize the coffee flavor at an ideal temperature during preparation. Technologies will create competitive advantages for Starbucks because not many competitors will have the financial strength required to acquire such equipment. They will enhance product management and operational details of the company.

Today, Starbucks’ business and financial activities are healthy. This gives the company an opportunity and a better position to execute its global strategies. The company generates enough revenues and profits, which can support its growth plan in all continents. This would make the company one of the most successful coffee retails globally.

Table 1: Income Statement (2009-2012) – these growths over the years indicate that the best is yet to come for Starbucks

( Starbucks Corporation , 2013)

Starbucks will expand globally in order to succeed and grow its balance sheet, revenues, and profits. However, this process will bring about many issues, specifically financial. Starbucks will have to focus on global budgeting, forecasting, planning, and reporting. In addition, the company will also have to conduct financial risk assessment and promote global accountability (Castellina and Jan, 2012).

The company will conduct workforce planning, maintain profit and loss accounts, balance sheet, and financial planning in different systems. Moreover, it will have to set global sales targets. However, these financial details may present challenges because of their fragmented nature. They are likely to increase operational costs, maintenance costs, and compliance costs. These are internal issues.

On the other hand, Starbucks will also have to deal with fierce competitions from coffee retails in foreign markets and others at home. These competitions will also exert financial pressure on the company.

Starbucks will not rely on the traditional annual budget alone. Instead, it will be flexible and track daily sales to quarterly sales in order to understand financial growths in foreign countries. This may also require a knowledgeable financial team and efficient financial tools.

Starbucks will also meet many, global statutory requirements, including employees’ welfare and benefits, GAAP, and IFRS. This implies that the company will need to integrate all its financial activities at various levels and consolidate financial reports for reporting. In short, Starbucks will invest in financial tools, which would streamline financial management and reporting in order to improve efficiency.

The complex nature of global operations may require slightly different organizational structure.

Figure 1: Proposed Starbucks global organizational structure

This is a Starbuck’s basic structure of managing home and global operations. The company’s senior managers and executives will control all operations from the head office at Seattle, Washington. The district managers will be responsible for domestic operations in their designated states or areas.

As the company expands to different continents, it will introduce regional managers or presidents to oversee operations across different continents or regions. Regional presidents and district managers will report directly to senior executives at Seattle.

The store managers may take the role of the outlet chiefs, and they work alongside shift supervisors. Shift supervisors may also assume the role of chiefs in their absence. Starbucks has other employees below the supervisors, who will be responsible for running daily operations of the company. These are baristas.

The company also has licensed stores, which would be strategic areas like bookshops, airports, grocery stores, and in locations where Starbucks may not be available. Starbucks will still control all licensed stores and other distributors. Moreover, they must maintain all Starbucks’ standards and stringent company’s guidelines. Starbucks must approve all their products. This is critical for protecting the Starbucks’ brand globally.

Starbucks considers all employees who work in retail outlets as partners. The company believes that this is an integration process for all employees into the system irrespective of their role or title in the company. Partners are responsible for repeat business, happy customers, excellent services, products, and other activities that involve contact with customers.

Since Howard Schultz took over Starbucks, it was clear that the company would grow significantly. However, it was not until 1990s when industry observers noted that the company was expanding rapidly.

The company focused on domestic expansions within a specific period. Starbucks aimed to be the most recognized coffee retailer in the world. As a result, the company has achieved global recognition and established itself as the most respected coffee brand.

Today, the company has expanded its operations to several continents with many retail outlets. Financially, the company can achieve global expansion because it has the capital for strategic partnership, joint ventures, or as a sole investor.

Management has focused on improving the ways in which the company does business globally. As a result, Starbucks has increased its presence in most of the emerging economies. Financial statements indicate that the company is still profitable despite widespread investments in new ventures. Strategic alliances and licensed stores have facilitated the company’s growth and profitability.

From the analysis of economic factors, the industry is favorable and most foreign countries encourage foreign investors. This presents good opportunities for Starbucks’ global expansion strategies. The company’s marketing plan recognizes critical areas for its global expansion. It has premium products.

However, Starbucks has learned to adjust prices to fit emerging economies where high prices may hinder acquisition of new customers. The market mix has worked for Starbucks while the focus on technologies has improved customer services and operations. Starbucks controls the largest market share in the coffee retail business. Hence, competition may not be a major hindrance to expansion and profitability.

Schultz believes that the company must strive for the best in order to develop and maintain the global brand, take meaningful risks, and establish new market segments. From such risks, the company has developed elegant coffee outlets, developed better rewards, and compensation for employees and improved customer satisfaction.

Starbucks has provided a new line of products in order to create new experiences for customer and attract potential coffee consumers. Such new products have resulted in new coffee products, which have attracted customers who were not coffee consumers. Starbucks continues to search for new strategies for the global expansion in order to establish its coffee brand as the most recognized and respected globally.

Castellina, N., and Jan, W. (2012). Effective Financial Management for International Expansion . Web.

Kotha, S., and Glassman, D. (2003). Starbucks Corporation: Competing in a Global Market . Web.

Starbucks Corporation . (2013). Web.

Starbucks Unveils Accelerated Global Growth Plans . (2012). Web.

Thompson, A., and Gamble, J. (1997). Starbucks Corporation . Web.

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Starbucks: The Company Analysis

General Environment Factors Mentioned in the Video

The three general environmental factors are socio-cultural, economic, and political. The social factor was that people were not used to having to drink coffee outside their residences, and it was an avenue that Howard Shultz initiated by establishing coffee cafes. It supported Starbucks to flourish and go public in its coffee business. However, the company suffered economically due to the great recession of 2007-2008, which negatively affected the sales revenues of Starbucks leading to its stock price drop by 50% (Shedd, 2019). This posed a serious threat to its survival in the global market as people averted from luxury coffee. In addition, the firm experienced political factor as, there was an issue in constructing Starbucks stores overseas such as in Singapore and Japan.

The Starbucks Reserve Roastery strategy

The Starbucks Reserve Roastery strategy was intensive and improved the company store experience. The large reserves were a creative marketing approach that inadvertently generated financial benefits for the corporation. The reserves created a positive experience between the company’s products, particularly coffee, and its consumers (Shedd, 2019). Through the practical illustrations at roasteries, consumers were exposed to coffee tastes; hence, preferences for the company were improved.

However, I do not think this strategy runs the eventual risk of cannibalizing nearby stores. This is because the reserve roasteries are costly to set up, creating them fewer in number. In addition, the roasteries were a marketing approach aimed at creating a premium experience for a given high-end market for Starbucks. These roasteries offer specialty products, whose values are twice the ones from the normal Starbucks shops. Therefore, it would be appropriate to assert that the typical Starbucks cafes and the reserve roasteries shall maintain their consumer bases (Kendle, 2019). Thus, the reserve roasteries are there to complement the typical Starbucks shops.

The Main Source of Starbucks’ Competitive Advantage

Starbucks’ main source of its competitive edge is excellent consumer services that further improve the coffee retailer’s attractiveness. The company duly recognized the paramount role of its workers in consumer-experiencing positions to maintain its high consumer service level. In addition, Starbucks gains from its product differentiation approach, which creates the brand to be competitive in the market.

Starbucks SWOT Mission Statement and Vision Statement

I do agree with the explanations given concerning Starbucks’ mission statement and vision statement. The document has presented its definition and illustration of the vision and mission of the company to help the reader understand. I agree that the vision of Starbucks centers on leadership in the sector. The mission statement is explained clearly with its significance to the company’s success. I give this document a grade A because of the excellent expressions and explanations of the vision and mission statements in detail.

Starbucks PESTEL Analysis

The PESTLE analysis was well explained in this document based on my observations and analysis. I agree with the economic aspects that Starbucks should take advantage of and exploit the growth of developing nations. Further, I agree that the government policies of enhancing infrastructure create opportunities for the company to have access to more suppliers and consumers. This reveals that the corporation has room for expansion and growth based on the external factors presented. Therefore, I give this document a grade A because of the solid explanations and analysis of the external factors affecting Starbucks’ growth.

Starbucks Five Forces

I agree with competitive rivalry is high as Starbucks has several competitors both large competitors, for example, McDonald, Dunkin Brands, Subway, Burger King, and small competitors. The competitors rival the company’s services and products at each market level. However, I disagree with the threat of substitutes being high because no trends are showing that the demands for coffee is declining while other beverages rising. On a rating of A to F, I will rate this document as B because of its detailed analysis of Porter’s five forces.

Starbucks Resource-Based View of the Firm/VRIO

I agree that the strong global presence and large size of Starbucks are rare and expensive to sustain and are exploited. The company’s global presence attracts many consumers, and may not be duplicated easily. Further, its large outlets located in strategic sites create them costly to keep. However, I disagree with the aesthetic appeal and ideas of Starbucks’ shops are rare because this can be developed for any service corporation. Further, I do not agree that the company being in a strategic and prime position is rare. Therefore, I can rate this document C because it has provided some misleading information on VRIO.

Starbucks Generic and Intensive Growth Strategies

I agree with the highlighted generic and intensive growth strategies for Starbucks. The strategies align with the company mission and vision statement of growth. For instance, the firm employs market growth as its generic strategy for intensive growth that facilitates business growth by generating sales revenues in new market segments. If I were to rate this document, then an A would be the grade awarded because of its well-informed research on strategies employed by Starbucks to spur growth.

Starbucks SWOT Analysis

I agree with Starbucks’ strengths highlighted in the document. The company is one of the most recognizable coffee brands globally. It has high-quality products due to investment in highly skilled labor in terms of its coffee. However, I do not agree with the weaknesses noted about the company. While Starbucks products could be cited as highly-priced compared to other brands, its consumers have not risen any complaints. I rate this document B as it has displayed a good analysis of Starbucks’s SWOT analysis despite a few misleading concepts about the company.

Kendle, K. (2019). Starbucks reserve Roastery: The complete guide . Web.

Shedd, K. (2019). How Starbucks went from one coffee bean store to an $80B business [Video]. CNBC. Web.

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History of Starbucks

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Published: Jan 4, 2019

Words: 701 | Pages: 2 | 4 min read

• Starbucks went public on June 26, 1992 at a price of $17 per share (or $0.53 per share, adjusted for subsequent stock splits) and closed trading that first day at $21.50 per share.
• Starbucks was incorporated under the laws of the State of Washington, in Olympia, Washington, on Nov. 4, 1985.
• Starbucks Corporation’s common stock is listed on NASDAQ, under the trading symbol SBUX.

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• Instructions Followed To The Letter
• Deadlines Met At Every Stage
• Unique And Plagiarism Free

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Starbucks: Company Analysis

Introduction, marketing strategies, marketing philosophy, pricing strategy.

Competition has gone global and the market and industry dynamics have necessitated the need for companies to make concerted efforts streamlined towards ensuring that high quality goods and services are offered in the market at competitive prices. This has resulted in the adoption and implementation of several tools and strategies geared towards the aforementioned goals attainment. According to Soh (2009) “battles over technology standards have great strategic importance for firms competing in the food and beverage industry”. Starbucks has not been left behind in its quest for the adoption of new technologies and better marketing strategies.

In the operation of Starbucks Company, effective and efficient managerial interventions are widely applied. The company has over the years experienced continuous development in the coffee industry. To effectively and efficiently achieve and maintain this, it has employed marketing approaches which seek to enhance its comparative advantages as well as unlock economies of scale. Building a global brand with a strong presence in 30 countries and reporting revenue of $5.1 billion in 2006 is not an easy thing. It calls for best management in marketing and operations (Pickett and Pickett, 2001).

One strategy that has been used by Starbucks to aggressively market its coffee brand is cause marketing. This is because of the underlying factor that as opposed to person marketing, cause marketing has the capacity to impact emotionally on consumers and the general public. This strategy is well illustrated by the purchase of Ethos Water Company in 2005 by Starbucks with the aim of cleaning up the world’s water supply. Within just a period of five years, Starbucks pulled in one the biggest cause marketing strategy in the history marketing in that it plans to donate $10 million to developing nations that lacked capacity to provide clan water to their citizens. In fact, it has been pointed out in marketing circles that cause marketing forms an effective marketing strategy for international companies because of its ability to elicit emotional impact on the consumers. “More and more marketers are looking for ways to appeal to consumers on an emotional level by indicating that they support the sorts of causes that consumers support,” (Howard, 2005).

In addition to the above, the primary marketing philosophy behind the marketing strategy of star bucks is geared towards employing greater impact on social influences to reach their target market. This has been demonstrated by operational control and innovation and entrepreneurship that it has sought to the entrenchment of a clear mission statement that portray the importance of sociological importance through environmental issues. This issue is succinctly put by Kembell (2002) in stating that “Starbucks doesn’t just rest on its laurels, it demonstrates it through participating and organizing activities such as neighborhood clean-ups and walk-a-thons and once again, the company’s image is strengthened by its actions.”

In its pursuance of its strategic control intervention, Starbucks Company has incorporated in its management the integration of both qualitative and qualitative strategies, the uses financial and non-financial information and customer focus interventions. Furthermore, it rewards all it employees and customers on the basis of relative contribution to the company success. On the aspect of innovation and entrepreneurship, it ensures continuous success in this competitive world and spends a considerable amount of resources in its innovation and it unique. Because of its global presence, Starbucks uses global and second mover strategy to attract and retain its customers. This is demonstrated by the long term marketing plan it signed with Kraft Foods Inc. to “distribute, market, advertise and promote the Starbucks products” (Kembell, 2002).

In addition to the above, the pricing strategy of Starbucks is aimed at giving the customer the best value in return for the price of the product. The pricing strategy is an important attribute and should ideally be focused on the pursuit of a strategy that is based on customers’ perception of value and has been fully exploited by Starbucks to its competitive advantage. This is because of the greater attachment to quality than price. According to Soh (2009), “A comparison of specialty drinks with its competitors reveals very minor differences and Starbucks’ image is one of the key elements to their success,” Starbucks employs the application of intensive distribution that is aimed at capturing all areas in market levels. Last, the branding strategy for Starbucks is the most important characteristic of this top brand is its ability to deliver the benefits that customers truly desire. This is demonstrated through its unique colour.

In conclusion, Starbucks Company stands out comparatively above the rest in the coffee competitive market due the above strategic controls, effective Innovation and Entrepreneurship and best practices in marketing management. This market remains one of the most competitive and dynamic and as such Starbucks must avail a combination of flexibility and customer satisfaction strategies to stay at the top. It has archived an above average score in its management approaches so far.

Howard, T. (2005). Starbucks Takes Up Cause For Safe Drinking Water. USA Today . 160(9), 32-38.

Kembell, B. (2002). Catching the Starbucks Fever: Starbucks Marketing Strategy . Missouri: Missouri State University.

Pickett, S.H.K. and Pickett, J.M. (2001). Internal control: a manager’s journey . John Wiley and Sons.

Soh, P. (2009). Network Patterns and Competitive Advantage before the Emergence of a Dominant Design . Strategic Management Journal. J. , 31: 438–461.

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