Starbust Case Analysis

Starbucks in 2004: Driving for Global Dominance

Starbucks is a global corporation, which was established in 1971. This company has dominant retail stores and brand specialty coffee and drinks in North America and also in foreign countries. The fiscal year of 2004, Starbucks pledge to open up approximately 1,300 new stores across the world. The company is hoping to increases sales revenue and sale from 3 to 7 percent with in year. The guiding theme of Starbucks' social responsibility strategy was "Giving back to our communities is the way we do business."

This statement can mean help the unfortunate and its employees by giving them health care, education, and aid program awareness. The environmental committee looks for way to help reuse and reduce the material by recycling the waste, which is used. Some of the issues that confront the management team are question like what new products and new experiences could Starbucks provide that would uniquely belong to or be associated with Starbucks? Therefore, management would come up with strategies of new products and different flavor for coffee to attract new customers.

Strategic intent was to establish Starbucks as the most recognized and respected

brand in the world today and future. According to the case:

The vision of what a Starbucks store should be like included such concepts as an authentic coffee experience that conveyed the artistry of espresso making, a place to thick and imagine, a spot where people could gather and talk over a great cup of coffee, a comforting refuge that provided a sense of community, a third place for people to congregate beyond work or the home, a place that welcomes people and rewards them for coming, and a layout that could accommodate both fast service and quiet moments.

Therefore, Starbucks CEO Howard Scheltz has place a good interests in bettering the company to increase strategic vision in showing a direction in developing and strengthening its business. Starbucks vision statement is "Not only integral to our success as a company it also serves as a wonderful example for us to follow. Draw from your roots. Trust in and nurture the strength of your core. Always reach upward. Always reach out. A perhaps most important, always give back

Starbucks SWOT Analysis

Starbucks has become a well-known company for selling the highest quality coffee beans and best tasting coffee products. It was one of the first companies to realize that the real money to be made was in beverage retailing, not just coffee beans. Starbucks created a coffee for the coffee connoisseurs and go to great lengths to acquire only the highest quality of coffee beans. They have set new precedence by outbidding the European buyers for an exclusive crop of coffee beans, which produces one of the best coffees in the world. Roasters of Starbucks coffees are extensively trained for one year. Starbucks has the distinction of being the public's educator on Expresso. They have also recently started to expand to packaged and prepared tea in response to the growing demand for this product. There are no other national coffee bar competitors in the same scale as Starbucks. Starbucks is the only competitor in the coffee bar market that has a recognized brand image. The difference between Starbucks and other coffeehouses is that they own all their stores and do not franchise. Starbucks stores operate in most metropolitan areas of the United States and also have a direct mail business to serve customers in every state. They have introduced gourmet flavored decaffeinated coffees as well as specialty flavors and whole bean coffees for the faithful coffee drinkers. They have also added light lunch fare to their menu. Starbucks had recently expanded its emphasis internationally. There are opportunities waiting in possible joint ventures with other corporations to design new product associations with Starbucks' coffee.

Although Starbucks has enjoyed tremendous success in the past few years, there are a few obstacles looming. Since the popularity of the coffee house idea has grown, some cities wish to issue regulations on the coffeehouses due to complaints of late night patrons becoming uncontrollable. The cost of coffee beans is expected to rise in the future due to lower supply, which may tighten the margins on coffee merchants. The higher costs have cut into markets, which have heightened the competition in a crowded market. There is an enthusiasm of health consciousness growing in the United States. People are cutting down on caffeine but the consumption of decaffeinated coffee has not seen an increase. Although Starbucks does not have major national competitors, they do have regional ones. Tourists become confused when ordering, since they cannot simply order a cup of coffee. Although Starbucks is interested in gaining recognition and growth in Europe, they will not be pioneers in the European coffee market as they were in the United States.

Strengths

Ð'* Starbucks Corporation earning in excess of $600 million in 2004.The company generated revenue of more than $5000 million in the same year.

Ð'* Starbucks is in the Fortune 100. The company is a respected employer that values its workforce.

Ð'* The organization has strong ethical values and an ethical mission statement as follows, 'Starbucks is committed to a role of environmental leadership in all facets of our business.'

Ð'* It is a global coffee brand built upon a status for fine products and services. It

cafes increase every year.

Weaknesses

Ð'* Starbucks has a reputation for new product development and creativity. However, they remain vulnerable to the possibility that their innovation may falter over time.

Ð'* The organization has a strong presence in the United States of America with more than three quarters of their cafes located in the home market. It is often argued that they need to look for a portfolio of countries, in order to spread business risk.

Ð'* The organization is dependent

on a main competitive advantage, the retail of coffee. This could make them slow to diversify into other sectors should the need arise.

Opportunities

Ð'* Starbucks are very good at taking advantage of opportunities.

Ð'* In