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Starbucks: Company Analysis

Introduction

Competition has gone global and the market and industry dynamics have necessitated the need for companies to make concerted efforts streamlined towards ensuring that high quality goods and services are offered in the market at competitive prices. This has resulted in the adoption and implementation of several tools and strategies geared towards the aforementioned goals attainment. According to Soh (2009) “battles over technology standards have great strategic importance for firms competing in the food and beverage industry”. Starbucks has not been left behind in its quest for the adoption of new technologies and better marketing strategies.

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In the operation of Starbucks Company, effective and efficient managerial interventions are widely applied. The company has over the years experienced continuous development in the coffee industry. To effectively and efficiently achieve and maintain this, it has employed marketing approaches which seek to enhance its comparative advantages as well as unlock economies of scale. Building a global brand with a strong presence in 30 countries and reporting revenue of $5.1 billion in 2006 is not an easy thing. It calls for best management in marketing and operations (Pickett and Pickett, 2001).

Marketing Strategies

One strategy that has been used by Starbucks to aggressively market its coffee brand is cause marketing. This is because of the underlying factor that as opposed to person marketing, cause marketing has the capacity to impact emotionally on consumers and the general public. This strategy is well illustrated by the purchase of Ethos Water Company in 2005 by Starbucks with the aim of cleaning up the world’s water supply. Within just a period of five years, Starbucks pulled in one the biggest cause marketing strategy in the history marketing in that it plans to donate $10 million to developing nations that lacked capacity to provide clan water to their citizens. In fact, it has been pointed out in marketing circles that cause marketing forms an effective marketing strategy for international companies because of its ability to elicit emotional impact on the consumers. “More and more marketers are looking for ways to appeal to consumers on an emotional level by indicating that they support the sorts of causes that consumers support,” (Howard, 2005).

Marketing Philosophy

In addition to the above, the primary marketing philosophy behind the marketing strategy of star bucks is geared towards employing greater impact on social influences to reach their target market. This has been demonstrated by operational control and innovation and entrepreneurship that it has sought to the entrenchment of a clear mission statement that portray the importance of sociological importance through environmental issues. This issue is succinctly put by Kembell (2002) in stating that “Starbucks doesn’t just rest on its laurels, it demonstrates it through participating and organizing activities such as neighborhood clean-ups and walk-a-thons and once again, the company’s image is strengthened by its actions.”

In its pursuance of its strategic control intervention, Starbucks Company has incorporated in its management the integration of both qualitative and qualitative strategies, the uses financial and non-financial information and customer focus interventions. Furthermore, it rewards all it employees and customers on the basis of relative contribution to the company success. On the aspect of innovation and entrepreneurship, it ensures continuous success in this competitive world and spends a considerable amount of resources in its innovation and it unique. Because of its global presence, Starbucks uses global and second mover strategy to attract and retain its customers. This is demonstrated by the long term marketing plan it signed with Kraft Foods Inc. to “distribute, market, advertise and promote the Starbucks products” (Kembell, 2002).

Pricing Strategy

In addition to the above, the pricing strategy of Starbucks is aimed at giving the customer the best value in return for the price of the product. The pricing strategy is an important attribute and should ideally be focused on the pursuit of a strategy that is based on customers’ perception of value and has been fully exploited by Starbucks to its competitive advantage. This is because of the greater attachment to quality than price. According to Soh (2009), “A comparison of specialty drinks with its competitors reveals very minor differences and Starbucks’ image is one of the key elements to their success,” Starbucks employs the application of intensive distribution that is aimed at capturing all areas in market levels. Last, the branding strategy for Starbucks is the most important characteristic of this top brand is its ability to deliver the benefits that customers truly desire. This is demonstrated through its unique colour.

Conclusion

In conclusion, Starbucks Company stands out comparatively above the rest in the coffee competitive market due the above strategic controls, effective Innovation and Entrepreneurship and best practices in marketing management. This market remains one of the most competitive and dynamic and as such Starbucks must avail a combination of flexibility and customer satisfaction strategies to stay at the top. It has archived an above average score in its management approaches so far.

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References

Howard, T. (2005). Starbucks Takes Up Cause For Safe Drinking Water. USA Today. 160(9), 32-38.

Kembell, B. (2002). Catching the Starbucks Fever: Starbucks Marketing Strategy. Missouri: Missouri State University.

Pickett, S.H.K. and Pickett, J.M. (2001). Internal control: a manager’s journey. John Wiley and Sons.

Soh, P. (2009). Network Patterns and Competitive Advantage before the Emergence of a Dominant Design. Strategic Management Journal. J., 31: 438–461.

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