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Starbucks Coffee Company’s Analysis

Starbucks coffee company is an international based coffeehouse chain that purchases and roasts finest coffee beans. The processed beans are being sold all over the world in the form of dip-brewed coffees and espressos. Starbucks Coffee Company was founded in 1997 and became the world’s leading brand of specialty coffee.

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Mission Statement

The company’s mission statement is available from its official website “To inspire and nurture the human spirit— one person, one cup, and one neighborhood at a time” (Starbucks, 2009). It is clear from this mission statement that the company has placed great emphasis on its relationship with customers, partners, society and shareholders. Furthermore, the company has also set out its corporate social responsibility by stating that “Starbucks is committed to a role of environmental leadership in all facets of our business” (Starbucks, 2009).

  • Coffee: There are more than 30 blends of single-origin coffees available in the product line of Starbucks Coffee Company. The product line includes fresh-brewed coffee, hot and iced espresso beverages, coffee and non-coffee beverages and Tazo teas.
  • Fresh Food: Customers will find a great deal of fresh food in the restaurants and franchise of Starbucks Coffee Company. The fresh food includes variety of salads, sandwiches and pastries.
  • Merchandise: The merchandise that is an addition to the marketing range of Starbucks Coffee Company includes assorted home espresso machines, coffee grinders and a great range of premium chocolate. Furthermore the company also provides coffee mugs, coffee accessories and a variety of gift items.
  • Entertainment Services: Entertainment services make it a worthwhile experience for the Starbucks Coffee lovers. The entertainment services provided by the company include the marketing of selected music, movies and books. The entertainment services help in encouraging emerging music stars and writers.
  • In Stores: Starbucks Coffee Company also provides a great range of bottled products available in stores world wide. The in-store products include bottled Starbucks Frappuccio beverages, chilled cup coffee, Starbucks own blended espresso drinks and iced coffee. Tea is another important product in the in-store products range. The two most famous types of tea by Starbucks coffee company are whole bean coffee and Tazo. Starbucks Coffee Company also provides tasty ice cream for all the ice cream lovers.
  • Starbucks Card: Starbucks Card, a reloadable stored-value card and also Duetto® Visa card which allows customers to take advantage of discounts available in stores. The company also offers this service via customer’s iphone® (Starbucks, 2009).
  • Global Consumer Products: Line of bottled Starbucks Frappuccino® beverages, Starbucks Discoveries® chilled cup coffee (in Japan, Taiwan and Korea), Starbucks DoubleShot® espresso drinks, Starbucks® Iced Coffee, whole bean coffee and Tazo® teas at grocery, Starbucks™ Coffee Liqueurs and a line of super-premium ice creams (Starbucks, 2009).
  • Ethos: Ethos is a brand of mineral water bottles which is acquired by Starbucks Coffee Company. The Ethno mineral water brand is being sold in America and Canada. The income received by the Ethos mineral water bottle is used to fund the mineral water projects in the third world countries.

Industry Analysis

Starbucks Coffee Company is regarded as the biggest hallmark in the beverage industry. With the passage of time the US beverage industry, specifically the coffee market is being considered as saturated due to the bigger chains competing with one another. Smaller companies are emerging in the coffee market even though the bigger companies are in competition. The cost of the coffee is increasingly becoming the reason behind the tough competition among the coffee brands (Starbucks Coffee Company, 2009). According to the figures, there were 463 coffee outlets in the country in 1991 but by the middle of 1996, there were 5,425 coffee outlets in the country. This shows that coffee beverages have become a trend in the commercial sector. The coffee market is crowded and fully catching light with competitors. In such a situation, Starbucks Coffee Company is working through strategic planning for the business.

Strategic Planning

The strategic planning of the Starbucks Coffee Company is to turn the attention of the marketing department to the foreign markets for continued growth. The main focused region of the Starbucks Coffee Company is Asia-Pacific Region (Starbucks Coffee Company, 2009). The consumer income is increasing in Japan therefore Japan is main target in the strategy of Starbucks Coffee Company. Starbucks Coffee Company has its strategy to form alliances with the bigger companies to get aid in the distribution of its products. Thus the company had strived to form alliances with Tazo, New York Times, Pepsi Co. etc. Currently the largest companies, to which the Starbucks Coffee Company is affiliated with, are Apple and MSNBC.

Competitors Analysis

The list of competitors of Starbucks Coffee Company includes McDonalds, Nestle and Dunkin.

Caribou Coffee: The Company operates by promoting and selling a lifestyle to its customers which is characterized by adventure. The company has been able to secure the second largest position in the US and could be considered as the closest competitor of the US. The company has almost 415 outlets in the US and operates in different countries through 80 franchise stores (Starbuck, 2006).

Costa Coffee: Costa Coffee is an international chain supplying coffee and other products which has a well placed global strategy and in direct competition with Starbucks. Costa Coffee has a global chain of stores and is also enjoying great market success in the Middle East and other Asian countries. The company’s position in the Asian market grew further stronger as it decided to amalgamate with local producers in huge market of India. Through collaborative associations the company has grown rapidly and despite slowing down financial conditions the company has announced opening of 300 stores in China only in the years to come (Starbuck, 2006).

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Nestle: Nestle is a Swiss based company which claims that Starbucks Coffee Company is offering instant coffees at four times expensive prices of nestle products. This claim is being advertised all over the strategic areas including Korea, US and Canada. Nestle and Starbucks Coffee Company claims the premium and best taste. Instant nestle coffee is handy and cheap for most of the coffee consumers but on the other hand the taste and premium quality of the Starbucks Coffee Company stands tall among other brands. Due do the pricing of the Starbucks Coffee Company, other companies are able to compete with it.

McDonalds: McDonalds is a rising competitor of Starbucks Coffee Company. McDonalds coffee products selling strategy is a new and rising in comparison with Starbucks Coffee Company. McDonalds has started its range of coffee cappuccino 18 months back. The experiment to introduce the coffee products has already helped the income of the McDonalds in rising. The customers are appreciating the new introduced tastes of the cold and hot coffee beverages. The competition that has been introduced by McDonalds is welcomed by the CEO of Starbucks Coffee Company (Baertlein, 2007). Starbucks Coffee Company has been the leading coffee seller in the beverage industry and therefore the company is working strictly on its strategic plan for the competitors like McDonalds.

Dunkin: It introduced its coffee products a year ago at low prices which was a call for competition for Starbucks Coffee Company. Dunkin’s prices were affordable for the consumer to buy coffee products (Flight, 2007). The reason of the low price helped Dunkin in its purchases but the capital remained limited as the dairy products increased. Dunkin is able to compete with Starbucks Coffee Company on the basis of prices.

Market Position

Starbucks Coffee Company has a dominant position in the market. Starbucks Coffee Company introduced the first premium, expensive and high-quality Starbucks experience full of coffee products. The expansion of the company helped in capitalizing its growth and popularity. The addition of the 1,500 stores every year brought the count of the total stores to 166,000 by 2008. The company has generated U.S $10.4 billion revenue in US (Starbucks Coffee Company, 2009).

In the contemporary situation Starbuck faces significant headwinds and serious rivalry competitions. Due to the economic recession once again the competition has begun among these brands. But there is still a clear passage for the Starbucks Coffee Company for its smooth business as there are no clear competitors to compete the quality of Starbucks Coffee Company.

Reference

Baertlein, L. (2007). McDonald’s owners eye Starbucks with McCafe drinks. 2009. Web.

Flight, G. (2007). Grinding Out Success Next to Starbucks. Buisness 2.0.

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Starbuck, W. (2006). Organizational Realities: Studies of Strategizing and Organizing. New York: Oxford University Press.

Starbucks Coffee Company. (2009). Web.

Starbucks. (2009). Our Current Card Menu. Web.

Starbucks. (2009). Starbucks Card. Web.

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StudyCorgi. (2021, October 30). Starbucks Coffee Company’s Analysis. Retrieved from https://studycorgi.com/starbucks-coffee-companys-analysis/

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StudyCorgi. (2021, October 30). Starbucks Coffee Company’s Analysis. https://studycorgi.com/starbucks-coffee-companys-analysis/

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StudyCorgi. 2021. "Starbucks Coffee Company’s Analysis." October 30, 2021. https://studycorgi.com/starbucks-coffee-companys-analysis/.

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StudyCorgi. (2021) 'Starbucks Coffee Company’s Analysis'. 30 October.

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