Starbucks Business Analysis

1698 words - 7 pages

Starbucks Business Analysis


Starbucks went from just a hole in a wall shop to a world known company and culture. One would wonder how it occurred, if it was over night, and most importantly the business aspect sustaining a successful international business. At the end of the day Starbucks Co. is well known for their market in gourmet coffee. On the other hand, the market has plenty of competitors in coffee, but what makes Starbucks the number one specialty coffee retailer? The answer lies in every compartment that makes Starbucks Co. what it is. From the 87,000 possible drink combinations, to the provided healthcare insurance offered to employees including part-time. ...view middle of the document...

d.). By 1987, Starbucks began selling bottled Frappuccino coffee drink through North American Coffee Partnership (Pepsi-Cola North America). Starbucks introduced the first mail order catalog in 1988, enabling mail ordering of their coffee in all 50 states. Tazo, a tea company based in Portland Oregon was welcomed into the Starbucks family in 1988.

Expansion for Starbucks was the star in creating a brand and a culture that many now find hard to compete with. In 1996 the first Starbucks outside of North America opened up in Tokyo, Japan. By 2002 Mexico City was the first store in Latin America (Starbucks Corporation, n.d.). The expansion for Starbucks grew to around 65 countries which makes it a worldly competitive beast.
Starbucks like any other business has competitors in the market. Starbucks main competitors include Caribou Coffee Company, Costa Coffee, Dunkin’ Brands Group, Inc., Green Mountain Coffee Roasters, McDonald’s Corporation, Nestle S.A. and many other restaurant chain and retail companies (Starbucks SWOT analysis 2015, 2015). Starbucks has plenty of competitors, but what advantages does Starbuck have that sets them apart from the competition? A huge advantage is Starbucks taking advantage of technology. When it comes to the mobile world Starbucks dominates competitors. According to the Motley Fool, “More than 13 million consumers in the U.S. now use Starbucks mobile apps. As a result, the coffee retailer now generates over 7 million mobile transactions in its stores each week” (Walsh, 2015). The app is an advantage for customers who wants faster service, with shorter lines. Starbucks also unlike its competitiors has its own software mobile app that is exclusive not only to consumers, but also to employees. Employees can easily get access to on the job information such as their work schedules. The Starbucks rewards programs app is Starbucks main tool to stay competitive.” Starbucks is driving consumer loyalty with the ongoing success of its My Starbucks Rewards, or MSR, initiative. In fact, the java chain added nearly 900,000 new MSR members in its latest quarter -- Starbucks MSR membership now tops 9 million, up 23% over last year (Walsh, 2015)”. Starbucks rewards program is the competitive advantage to grow profit, and maintain long-term customer loyalty to secure the future of the company. Starbucks execution on focusing on the original products including good coffee, quality service and a nice environment (Starbucks and McDonalds winning strategy, 2013). Some other attributes include, the leadership of Company founder Howard Schultz, and the expansion to China. “…This means that there is a strong demand for Starbucks as a “third place.” Last year, Starbucks opened 500 new stores in China, bringing the total to 1500” (Starbucks and McDonalds winning strategy, 2013).

Starbucks is a brand name and recognized internationally with companies value at $6.9 billion. Being...

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