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Starbucks Essay

1288 words - 6 pages

I’m sure that when thinking of Starbucks, many automatically think of strong coffee; Starbucks is more than just coffee. This company offers an appealing atmosphere and friendly helpful staff to assist customers with various services. Not only does Starbucks offer exceptional customer service they also pride themselves in offering an excellent working environment and benefits to their employees. Starbucks’ mission statement states: “Establish Starbucks as the premier purveyor of the finest coffee in the world while maintaining our uncompromising principles while we grow. The following six guiding principles will help us measure the appropriateness of our decisions:

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Currently Starbucks is now looking to expand globally.
Starbuck’s plan to expand globally is due to more western influences, in India where tea was a common beverage choice for the upper and middle class, but now coffee is becoming a statement of wealth and prosperity. China is another market that Starbucks is exploring with sales growth of 9% in 2010 making it the second largest coffee market. Brazil is another rising economy; it is set to be the biggest coffee drinking country in the world with recent coffee consumer’s growth and upper and middle class expanding, and it has more money to spend on specialty coffee and other excessive items. If sales in the United States began to decline with these emerging countries the market for specialty coffee will continue to grow. With many countries finally embracing industrialization and westernization, coffee will become the beverage of choice for many individuals.
The biggest threat would be definitely the power of the buyers has in the industry. Specialty coffee is a luxury and people can make the decision that it no longer fits in their budget. “Starbucks stock (SBUX) took a tremendous hit during the economic crisis when its shares fell from around $40 a share in 2007 to less than $10 a share the late 2008 to beginning 2009.” (An Analysis of Starbucks as a Company and an International)
Starbucks are financially sound; this is proven during the financial crisis in 2008 and 2009. Its stocks price may have fallen, but its profits barely took a hit. Profits went from $7.8 billion in 2006, to $10.4 billion in 2008, down to $9.8 billion in 2009, and back up to $10.7 billion in 2011. A company that can endure an economic crisis and still come out stronger than when its stock price was through the roof is a company that can’t be taken down easily. Starbucks has a strong brand recognition by customers.
Another big threat to the specialty coffee industry is the power of their suppliers have over the price of coffee. Arabica coffee prices soared 77% in 2010, which lead to major problems for the coffee industries. Arabica coffee is one of the most sold brands of coffee in the specialty coffee industry. With prices for that type of coffee sky rocketing, could really hurt the bottom line of every competitor, especially those that thrive on a low cost strategy.
Starbucks has been working to make itself your favorite stop for a cup of coffee. Starbucks wants to be the only brand name when thinking about coffee. The Seattle-based coffee retailer is increasing efforts to sell Starbucks pre-made coffee drinks, coffee beans for home brewing and other branded caffeinated products. Starbucks has been working with Kraft foods Inc., since 1998 to distribute coffee beans to grocery stores, wholesalers and other retailers. More of those products are known as Starbuck ready brewed Via with a variety of flavors and Starbuck house blend k-cup pack for...

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