Starbucks knows and realizes it is a billion dollar company with more than 20,000 shareholders. As Starbucks main goal is to keep its standing in the coffee market while also inducing growth ethics plays a large role in this strategy. To be unethical would do nothing to help Starbucks market
Starbucks offers a variety of coffee and coffee products in their retail stores and in grocery stores worldwide. Recently, Starbucks has added value to their retail stores with the expansion of their breakfast and lunch food selection, as well as with the arrival of the Starbucks Blonde Roast Coffee. Through value exploration, the avenue by which a company identifies new opportunities (Kotler & Keller, 2012, p. 58), Starbucks discovered there was a large group of consumers who preferred a milder roast coffee, when compared to the traditional dark roast coffees. In hopes of meeting consumer preference, the Starbucks Blonde Roast was developed and introduced as the newest brewed coffee by Starbucks. It is a “lighter, mellower roast coffee developed to meet the demands of consumers who requested that Starbucks create a lighter-roasted coffee.” According to Smyl & Edelman (2012), Brad Anderson, master roaster for Starbucks, said of Starbucks customers, “They told us they wanted a flavorful, lighter-bodied coffee that offers a milder taste and a gentle finish.
Growth! Management objective or goal is having twenty five thousand locations by 2013. Starbucks would saturate the market, so the company would become the most dominant, recognized, and respected coffee specialty retailer in the world. The company’s strategy is to increase sales and net income on a consistent basis year-after-year. Providing a profit for stockholder and stakeholders are essential.
It also sells a variety of coffee and tea products and licenses its trademarks through their Channel Development segmentation. As of September 30, 2012, it operated 9,405 Company-operated stores and 8,661 licensed stores. It has four segments (% of gross revenue): Americas (75%); Europe, Middle East and Africa EMEA (9%); China/Asia Pacific CAP (5%), and Channel Development (10%). (The New York Times, 2012) (Starbukcs Corporation, 2012) The business strategy of differentiation is exhibited through delivering consistence quality products and exceptional customer experience at a typically higher than average cost to customers. Customer value proposition is leveraged around serving the coffee experience into everyday lives.
This was important for top managers at Starbucks because instead of just having customers come in and out for a cup of coffee they can also think of Starbucks as a place to relax and meet with friends. In my opinion Starbucks was on the right track by creating this atmosphere as they have gained and retained many customers in this manner and at this time there are not many other cafes that can compare. The image that Starbucks created was employees are treated as partners and customer service is a very important factor. In addition to employee partnership Starbucks created an image of dominating the specialty coffee market. Why have Starbucks’ customer satisfaction scores declined?
It also sold coffee products through non-company-operated retail channels. - “Partners:” All Starbucks employees were called “partners.” Starbucks believed a partner satisfaction leads to customer satisfaction so it had a generous policy of giving health insurance and stock options to even the most entry-level partners. As a result, the company had the lowest employee turnover so the training process was reduced as much as possible to lower resources’ waste for the process. ! 2) Were there any changes in customer satisfaction levels and company’s ability to provide outstanding customer experience (2002 compared to 1992)?
Employees have heard a rumor that Starbucks might be opening a store in the area. Right now we have competitive advantage, because we are only café which is specialized in coffee products. The situation will change when Starbuck will open a new shop. As Baltzan & Phillips (2009) have stated in their book that, “competitive advantages are typically temporary because competitors often seek ways to duplicate the competitive advantage” (p. 22). The café have first mover advantage to be first in business but Starbucks are technologically advanced and have wholesale coffee business in the market.
Moreover, Product differentiation is difficult to achieve in a crowded market(over 400 new fragrances have been launched in 2007). Starbucks(an example from class) planned to increase its coffee sales. After a thorough analysis it was concluded (in unison) that Starbucks should focus on second most visiting visitors as the most frequent visitors are already generating maximum sales. Flare is experiencing a similar situation (performing exceptionally well in mass channels and Loveliest product category) and using the above idea it can be concluded that Flare should focus on drugstores and increase its sales in Summit and Essential brands. Flare can penetrate into Drugstores at cost of turning over the
Their competitive advantage is lower prices than their competition and more than 69 million Americans that are members of the Catholic Church are potential customers. 4. Mystic Monk Coffee’s strategy is a good money-maker for making profits now, but they are going to have to expand if they want to reach their fundraising goal. Its business model is selling to individuals on its website and occasional phone orders. It has recently just expanded its business model by selling wholesale to churches and local coffee shops.
Subject: Strategic Marketing by professor V. Camps European University Business School MBA Group A Adilbek Umraliyev October 2014 Starbucks case analysis General goal: Improve speed-of-service and thereby increase customer satisfaction How to do it: Invest additional $40 million annually in the Starbucks’ 4500 stores to add the equivalent of 20 hours labor per week What need to do: Reduce the service time for each customer to maximum 3 minutes How did they get it? In short, SWOT-analyze of the Starbucks External: 1) Demographical: customer type is changing; 2) Social: demands of customer is changing; 3) Technology: Impacts of innovation and new technologies; 4) Geographical: location of coffee shops. Opportunities: - available capital to invest (for instance: Schultz’s experience with $25 mln., also company have good financial condition); - customer demands for fast-service; - new technologies (special machines for making coffee). Threats: - independent low-costers; - substitutions (instant coffee, capsules etc. ); - local economic situations (crisis, political aspects).