Starbuck is a leading roster, marketer and retailer of specialized coffee around the world. The company was formed in 1985 and operates in 75 countries around the world. its stocks trade at the NASDAQ under the symbol SBUX. The company purchases and roast quality coffee that is sold along with handcrafted tea, coffee and other beverages including a variety of food items like snacks. The products are offered through stores that are o0perated by the company. The company also licenses its trademarks through different channels like licensed stores foodservice accounts and groceries. The company also sells other products under different brand names apart from its coffee brand ( Starbucks, 2017).
The objective of the company is to maintain the brand as the most recognized and respected globally. To achieve its goal, the company has engaged in a global expansion program that involves adding new stores to new and existing markets while optimizing the mix of company-operated stores and licensed outlets. The company is also leveraging on the experiences it gained from its traditional store model. Additionally, Starbuck continues to offer new coffee as well as other products in different forms in different categories, channels, and stores ( Starbucks, 2017).
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The company has seven strategies for growth that drive its operation, strengthen its revenues. The company strives to be the employer of choice, to elevate coffee, grow its store portfolio and create new customer occasions. Others include driving at home coffee share and occasions, building Tavana using Starbuck and CPG and extending digital engagement ( Starbucks, 2017).
SWOT Analysis
The strengths of the company include being the top brand in the coffee industry. It also has a strong brand image and the largest coffeehouse chain globally. The company has a strong reputation and brand value. The company has a dynamic management team and experienced staff and baristas giving the customers superior services. The distribution network allows the company to respond quickly to the changing needs of the customers. The opportunities for the company include an expanded global market. The company also has a strong distribution channel that supports its strategic operations. Similarly, experience in the global front has enhanced the ability of the company to remain on top of the competition. Increase brand portfolio has also enabled the company to serve a wider and diverse market. Emerging markets like China have also enhanced its revenues and market share. The coffee culture also promotes the consumption of its products. The weaknesses include inability by some suppliers and vendors to meet the required standards and to deliver supplies at the right time, in the right place and of the desired quantity. Diversifying its operations to include packaged coffee is likely to affect the value of the brand. Threats include increased costs for quality coffee, changing economic conditions that affect consumers’ ability. There is intense competition from established outlets that offer quality coffee at lower prices. The company is faced with foreign exchange fluctuations which affect its profit and costs ( Hanna , 2014; Sorkin, 2017).
The main competitors for Starbuck include quick service restaurants as well as specialty coffee shops. The company uses luxury coffee and unique store outlets to attract the middle class some of the existing brands like nestle use price competition to capture and maintain their market shares. The company has established competitors like KFC and McDonalds which have the financial muscles and a wide network thus are capable of launching new products or outlets faster than Starbuck. The company faces few barriers to entry into new markets and the regulations in the global market are few. Similarly, there are no switching costs involved in the industry. The buyers in the target market segment choose the brand due to its strong brand name and their locations and aesthetics, quality services and high-quality products. The company has a strong loyal customer base. Globally there are many suppliers of coffee beans which reduce the bargaining power of the suppliers. There are also few close substitutes to coffee where the next possible option that the customer will go for is tea, juices ( Hanna, 2014; Sorkin, 2017).
References
Hanna, J. (2014). Starbucks Reinvented. HBS Working Knowledge . Retrieved 8 April 2018, from https://hbswk.hbs.edu/item/starbucks-reinvented
Starbucks Corporation - Financial Data - Form 10K . (2017). Investor.starbucks.com . Retrieved 8 April 2018, from https://investor.starbucks.com/financial-data/sec-filings/default.aspx
Sorkin, A. (2017). While Other U.S. Companies Flee China, Starbucks Doubles Down . Nytimes.com . Retrieved 8 April 2018, from https://www.nytimes.com/2017/07/31/business/dealbook/sorkin-china-starbucks.html
