Starbucks Company Analysis
SYNOPSIS Starbucks Corporation, originally founded in 1971, but purchased by Howard Schultz in 1987, is the market leader in selling gourmet coffee (Starbucks, 2008). Starbuck's main objective is to establish itself as the most respected and recognized coffee brand in the world (Fact Sheet, 2008). Starbucks has accomplished this objective and experienced much success through their competitive strategy of clustering several stores within the same community and through their distinctive competencies of roasting and selling the quality coffee while providing high quality customer service. The question is, can Starbucks continue their market share growth with rising competitors? Should they focus more on their international operations? Can they continually reinvent themselves to maintain their strong brand image in the long run?
PROBLEMS
• Overall economic downturn can affect Starbucks’ market share if management neglects to address competitors’ strategies with lower priced offerings as consumers are becoming more conservative in spending their discretionary income. • Loss of identity and authenticity focused upon the foundational Starbucks experience, which, if unaddressed by management, can result in dissatisfied customers, loss of sales, and decreased market share. • Considering the economy and increasing domestic competition within the U.S., Starbucks must address their less profitable international operations.
SWOT ANALYSIS[1]
INDUSTRY EVALUATION In the past two decades, the coffee industry has experienced a significant increase in the demand for premium coffee. Today, about one in five Americans drinks some type of espresso-based coffee drink each day. The average yearly coffee consumption per capita in the U.S. is around 4.4Kg. Among these coffee drinkers, the average consumption is 3.1 cups of coffee per day, with men drinking approximately 1.9 cups per day, and women drinking an average of 1.4 cups per day (Coffee Research
PROBLEMS
• Overall economic downturn can affect Starbucks’ market share if management neglects to address competitors’ strategies with lower priced offerings as consumers are becoming more conservative in spending their discretionary income. • Loss of identity and authenticity focused upon the foundational Starbucks experience, which, if unaddressed by management, can result in dissatisfied customers, loss of sales, and decreased market share. • Considering the economy and increasing domestic competition within the U.S., Starbucks must address their less profitable international operations.
SWOT ANALYSIS[1]
INDUSTRY EVALUATION In the past two decades, the coffee industry has experienced a significant increase in the demand for premium coffee. Today, about one in five Americans drinks some type of espresso-based coffee drink each day. The average yearly coffee consumption per capita in the U.S. is around 4.4Kg. Among these coffee drinkers, the average consumption is 3.1 cups of coffee per day, with men drinking approximately 1.9 cups per day, and women drinking an average of 1.4 cups per day (Coffee Research