Brief History
The first Starbucks’ coffee store was opened in 1971, and the company has chosen the Seattle’s Pike Place Market as a historic location (Schultz & Yang, 2012). Nonetheless, the idea of the creation of the original coffee place started in 1983, when Howard Schultz (the Chairman and the Chief Executive Officer of Starbucks) traveled to Italy (Gilbert, 2008).
He was highly inspired by the Italian coffee bars, which cultivated the association with the romance while having the coffee experience. This fact was the primary reason for his desire to bring the tradition of the Italian coffeehouse to the United States of America. It could be said that Starbucks became a leader in the coffeehouse industry in the world slowly by selling one cup at a time (Schultz & Yang, 2012).
Missions and Goals
As for the mission of the company, the primary intention of the company is “to inspire and nurture the human spirit – one person, one cup, one neighborhood at a time (Starbucks: Our Mission, 2015). In this case, the main goal is to create a cozy atmosphere for the coffee drinking and provide the unique experience for the customers.
Speaking of goals, it is necessary to assure keeping the highest standards of quality using the ethical principles. In this instance, it could be assumed that the company offers the unique experience to the coffee drinkers, as the customers should expect more than just a simple coffee. Moreover, the company states that “we are performance driven, through the lens of humanity” (Starbucks: Our Mission, 2015).
In this case, this sentence underlines that the company pays high attention to the quality of the products and the ethical principles. In the end, delivering high-quality products and services is the primary goal of the company while combining it with the friendly atmosphere.
Scope of Business
Business scope is another aspect, which has to be discussed in details since it provides the information about the company’s fundamental values. The company tends to create the friendly atmosphere for all potential clients of Starbucks, as it welcomes everyone to have a drink in there coffeehouse (Starbucks: Our Mission, 2015).
Secondly, the company is continuously looking for the new opportunities to grow in size and to improve the quality of its services (Starbucks: Our Mission, 2015). Furthermore, another value of the company is “being present, connecting with transparency, dignity, and respect” (Starbucks: Our Mission, 2015, para. 1). This approach states that the company is respects the rights of its clientele and the ethical principles by giving the access to the operations, which are performed by the company.
Lastly, Starbucks emphasizes its goal to deliver the high quality of the services to all coffee drinkers while being responsible for the results (Starbucks: Our Mission, 2015, para. 1). It could be said that all of the values mentioned above underline the company’s responsibility and respect to the values of its customers.
Current Size, Growth, Profitability
It remains evident that Starbucks is highly popular and in the world, and it is present in many countries. Today, the coffee company has 21,000 stores in the 65 countries worldwide (Starbucks Coffee International, 2015). In the Middle East, it has 230 stores. International friendliness and friendly atmosphere are the potential reasons for Starbucks’ popularity in the world.
Moreover, the company pays high attention to the peculiarities of the local cultures (Starbucks Coffee International, 2015). As for the growth, it showed the rapid growth in the Middle East, as the number of the stores changes from 59 (2008) to 90 in Dubai (Starbucks in Dubai, 2012).
It could be said that the friendly international and cozy surroundings, friendliness, and high attention to the local cultures are the primary reasons for the growing popularity of Starbucks in the Middle East, as culture is an important part of the society and cultural traits cannot be disregarded. As for the profitability, Starbucks is a highly profitable company, and it tries to decrease the production costs to save more on manufacturing and services (Miller, 2009).
Culture and Reputation
One of the determinants of the company’s success is Howard’s efficient internal management strategy, which contributes to the efficient collaboration between the employees of different levels (Wardhana, Mustafa, & Idris, 2012) In this case, the employees, who work in the store, are in a strong interaction with the employees of the upper-level.
Additionally, Howard united the position by the same name ‘partners’ (Schultz & Yang, 2012). This approach helps avoid the power distance and conflicts between the employees. Lastly, changing the headquarters’ name into Starbucks Support Center (SSC) contributed to the making the decision makers the support providers.
It could be said that the combination of the ‘partners’ scheme and efficient internal management strategy is the primary reason for the empowerment of the role of the partners in the decision-making process, as the regional employees became closer to the corporate teams. In turn, this approach allows SSC to choose the right geographical locations for expansion.
In the end, the Howard’s vision of the essentiality of the customer relation management had a rapid influence on the company’s reputation and contributed to the building of the positive reputation of Starbucks in the world.
Competitive Advantage
It is evident that the company has several factors, which build its competitive advantage. One of them is the logo and the brand name; these two subjects create the company’s image and reputation in the world. The logo and name are highly recognizable and easy to remember. Another aspect is the high quality of the services, as they serve the finest coffees in the world.
In this case, the management of the company tends to assure the quality of the products and services by paying close attention to the relationship with the customers by enriching their experience in Starbucks (Wells, 2008). Furthermore, Starbucks provides more than 30 blends and single-origin premium coffee (Starbucks: About us, 2015).
Lastly, Ethisphere has named Starbucks, as one of the ethical companies for the ninth time in a row (Ethisphere, 2015). The last factor contributes to building company’s positive image in the world, as it is portrayed as valuing the ethical principles. In the end, the combination of these factors is beneficial for the company’s success, as it defines its strengths and competitive advantage.
SWOT: Opportunities
Furthermore, the opportunities of Starbucks have to be evaluated. One of the opportunities is to use social media to attract customers. Nowadays, online marketing is one of the ways to advertise new products (Close, 2012). In this case, social media (Snapchat, Facebook, and Twitter) can attract young adults and youngster to try Starbucks products.
Another opportunity is to provide delivery services in the capital cities, as the traffic is high. In this case, the customer base of Starbucks can be quickly increased, as there are many people, who do not have an opportunity to visit Starbucks locations during the day. Furthermore, paying attention to the development of the phone applications is another important opportunity. For instance, the app for the European and Middle East markets is not efficient, as it lacks important information about the products and interactivity.
Lastly, increasing the number of the stores, which are open 24/7 is another critical opportunity, as it will help increase the attendance of the Starbuck’s locations during the night. Nowadays, the 24/7 stores (63) are only present in the United States of America (Starbucks Coffee International, 2015).
SWOT: Threats
Despite having a distinct competitive advantage, the threats are present. One of them is the dominating number of the local coffee shops with the lower prices. Moreover, the number tends to increase in both American and international markets. This aspect might threaten Starbucks profitability and competitiveness.
Another threat is the fact that the prices for the coffee beans and dairy products tend to rise. In this case, the company might experience the increased caused. It remains evident that this aspect will question company’s profitability and might be the potential reason for the loss of the significant share of the market to the company’s with the stable suppliers.
Lastly, changes in economic or political regulation might limit the operations of the company in the world. For instance, the inflation rates are one of the aspects, which can cause the decrease in profitability of Starbucks (Wardhana, Mustafa, & Idris, 2012). This aspect will generate the demand for the substitute products with the lower price.
References
Close, A. (2012). Online consumer behavior: Theory and research in social media, advertising, and e-tail. New York, NY: Routledge.
Ethisphere. (2015). Web.
Gilbert, S. (2008). The Story of Starbucks. Mankato, MN: Creative Education.
Miller, J. (2009). Starbucks returns to profitability. Wall Street Journal, p. 31.
Schultz, H., & Yang, D. (2012). Pour your heart into it: How Starbucks built a company one cup at a time. New York, NY: Hyperion.
Starbucks: About us. (2015). Retrieved from They have more than 30 blends and single-origin premium coffees.
Starbucks Coffee International. (2015). Web.
Starbucks: Our Mission. (2015). Web.
Starbucks in Dubai. (2012). Web.
Wardhana, F., Mustafa, F., & Idris, M. (2012). Strategic management: Comprehensive strategic analysis in Starbucks. Web.
Wells, J. (2008). Starbucks bitter choice. Globe & Mail Toronto, p. B1.