S.Bucks
Starbucks Corporation is a Seattle, Washington based coffee company. Its main core business is to roast and sell whole bean coffee and coffee drinks through its retail outlets spread across USA and other major developed countries in Europe, Middle East and Asia. Schultz started the company in 1985, named Giornale. He got the business concept of retail coffee bars, while on a visit to Italy. He found Italians were adherent coffee lovers and loved to relax and discuss in coffee bars. He felt Americans would also prefer a premium cup of coffee if offered in a relaxing environment and spend some time in the coffee bars. America was one of the largest consumers of coffee in the world after Italy, Germany and Japan. His idea did not find much acceptance among his partners in Starbucks Corporation, where he was working as VP marketing. Starbucks Corporation was established in 1971 in Seattle, and was mainly in the business of selling roast bean coffee. Majority of the coffee sellers in America were selling the cheap quality coffee unlike the premium and expensive roast bean coffee sold in Italy and Japan. Schultz was of the opinion that Americans would pay for a premium cup o
The starbucks Corporation has to know their competitors, how powerful they are, and this address the first factor, rivalry among competitors. Procter & Gamble and Nestle are indirect competitors because they supply the canned coffee drinks. However, the greatest competitors are running coffee retailer. They are called Second Cup (Gloria Jean's Coffee Bean and Brother's Gourmet), and Seattle's Best Coffee (SBC), as mentioned earlier. In order to stand out from the crowd, Starbuck implement the differentiation strategic. The beans of coffee in Starbuck' coffee is 100% good quality. They import from Arabica. Location is another successful factor. Ø The retail outlet of coffee shops concept of Starbucks has been copied extensively by a number of other competitors such as Second cup and Seattle's best coffee retail outlets. This has affected the expansion strategy of Starbucks. Ø The Middle East culture, which once shunned the coffee house meetings of youth, has liberalized and many youth now prefer to relax and chat in a coffee house. This cultural shift makes the Middle East market a new potential market of growth for Starbucks. Ø It is not sold through the departmental stores and supermarket chain, which has the highest consumer attendance and can increase the sales and market share. Ø It has tie up or strategic alliances with a number of supermarket chains, shopping malls and airlines to sell its coffee either to the clients customers or staff. For instance it has strategic alliance with United Airlines and many other agencies. The firm has a matrix organizational structure, between the functional department and the product division. It has major functional departments such as marketing, supply chain, human resource, accounting, international planning, finance and communication. The product based division includes retail, specialty sales, wholesale group, direct response and international licensed concept unit. Ø A functional matrix organization structure of Starbucks helps in quick reorganization and a motivated workforce has little resistance to change. Ø It does not have franchisee agreements for expansion in other foreign countries. This can increase the establishment cost and decrease the profit margin from the overseas sale. 7.0 Conclusion on the Current strategy adopted: 5.0 Starbucks' Competitive strategy:
Some common words found in the essay are:
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Approximate Word count = 3003
Approximate Pages = 12 (250 words per page double spaced)
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