Business Analysis: Starbuck´s Mission

The Starbucks mission statement (“Our Starbucks Mission Statement,” 2011) comprises two important elements (a) an overarching statement of purpose, and (b) a set of “guiding principles” that interpret the meaning of the mission statement relative to six important aspects of the company’s business model (See Appendix for a complete description of the Starbucks mission statement). The overarching mission statement – “To inspire and nurture the human spirit one person, one cup, and one neighborhood at a time” – explicitly conveys the firm’s intent to extend its global presence

Starbuck 's has become a staple of American culture and for the most part, if you are in your 20 's, you have grown up with it and this has become what you expect coffee to be. Who can blame you, it is everywhere, so "wake up and smell the coffee"! I plan to tell you about the strategies that this giant uses, that have taken it from humble beginnings to a worldwide phenomenon. I also intend to explain how Starbucks is taking China by storm, mainly because marketer / entrepreneur Howard Schultz 's vision and mission statement is shared by everyone in the company!An excerpt from the London Financial Times published in February 2006 states the following in regards to Starbucks entering the Chinese market; "Mr Schultz said the company was

The first Starbucks opened in 1971, in Seattle’s historic Pike Place Market. The name, inspired by Moby Dick. Howard Schultz (Starbucks chairman, president and chief executive officer) had first walked into a Starbucks store. “He had a vision to bring the Italian coffeehouse tradition back to the United States. A place for conversation and a sense of community.” A third place between work and home. From the beginning, Starbucks set out to be a different kind of company. One that not only celebrated coffee and the rich tradition, but that also brought a feeling of connection. ("Company Information | Starbucks Coffee

Its weakness is its main dependence on the U.S. mainland and in some areas in the mainland and in large cities. Perhaps it is because its product image is freshness. Although Starbuck which is in the same market segment has expanded overseas. Its dependence on the organic raw materials for its product is a threat to the expansion of its market.

The industry’s saturation is moderately high with a monopolistic competition structure. For new entrants, the initial investment is not significant as they can lease stores, equipment etc. at a moderate level of investment. At a localized level, small coffee shops can compete with the likes of Starbucks and Dunkin Brands because there are no switching costs for the consumers. Even though it’s a competitive industry, the possibility of new entrants to be successful in the industry is moderate. But this relatively easy entry into the market is usually countered by large incumbent brands identities like Starbucks who have achieved economies of scale by lowering cost, improved efficiency with a huge market share. There is a moderately high barrier for the new entrants as they differentiate themselves from Starbuck’s product quality, its prime real estate locations, and its store ecosystem ‘experience’. The incumbent firms like Starbucks have a larger scale and scope, yielding them a learning curve advantage and favourable access to raw material with the relationship they build with their suppliers. The expected retaliation from well-established companies for brand equity, resources, prime real estate locations and price competition are moderately high, which creates a moderate barrier to

I am interesting in talking about Starbuck, because many other food service companies also offer coffee and at a lower price. The average price that Starbucks offers is much expensive than other competitors, but a lot of people still like to purchase coffee from Starbucks.

McDonald’s, in addition to several other fast food vendors like Burger King, Dunkin’ Donuts, Panera Bread and independent coffee houses remain Starbuck’s toughest competition (Adamy). McDonald’s began introducing its espresso beverage products in 2001, and offers its product at a price between two and three dollars to compete with Starbucks between three and four dollars a cup coffee (Adamy). Similarly, Dunkin’ Donuts has recently implemented a plan to expand nationally (Adamy). On average, Dunkin’ Donuts coffee products cost approximately 20 percent less than Starbucks’ (Ball and Leung). In response, Starbucks has announced recent

The Starbuck’s board of directors is normally comprised of 12 directors, but due to current succession planning of a board member there are currently has, two of which are internal members of the Starbucks Company; the remaining independent, external directors meet the independence requirements set forth by the Nasdaq Stock Market. These highly qualified directors bring an immense amount of external insight and experience to the Starbuck’s board. Each member of the Board of Directors is chosen for their level of experience in the food and beverage industry, consumer products and food service industry, brand marketing experience, international operations and distribution, domestic and international public policy, digital and social media

“Starbuck’s mission is to inspire and nurture the human spirit – one person, one cup and one neighborhood at a time” (as cited in Our Company, 2014). Starbucks vision is to “Establish Starbucks as a premier purveyor of the finest coffee in the world while maintaining our uncompromising principles while we grow” (Shah, Hawk, & A, 2011) In order to perform our mission and see our vision we must conduct business by the following values:

Retail: The integration of retail is also a source of competitive advantage because this capability is also valuable and rare. Through Starbuck's full control and consistent management of the distinctive Starbucks experience, the company is able to create a strong brand equity. Establishing a strong brand equity allows the company maintain market presence. Additionally, considering that there are many coffee producers competing against Starbucks, having a strong brand equity allows the company to differentiate themselves.

In terms of competition and the forces, which could limit the success of Starbucks it is important they stay ahead or even with other companies concerning innovative products. Many more micro companies are coming up with new products with a similar quality and a lower price/cost. It is important that Starbucks continues to search for innovative products to continually satisfy their customers. At the same time “rivalry” amongst Starbucks and smaller providers of coffee will continue to increase as the demand for coffee continues. The buyers bargaining power is significant as they can determine the cost, type of product, quantity and ultimately

Starbuck’s missions, values, and principles are directly related to their generic strategy of broad differentiation. Each one of these elements explains how Starbucks is just not offering just coffee, but an experience. In the stores, they complement this by bringing several items to the table (product variety). In addition, Starbucks has positioned themselves in the focus differentiation and treacherously close to best supply category. Starbucks has used the Verismo to position themselves back into the focus section because it is a specialty item that Starbucks aficionados might want in their home. However, Starbucks is going against the grain with the Via products because of its low costs. This is risky because people buy Starbuck for the experience and the high quality coffee, not because it is cheap.

With Starbucks being on basically every corner, it is hard for other coffee shops to come in and be competitive. Another ethical issue that Starbucks faces is their use of hormone-addled milk in their coffees (Ferrell, Fraedrich, & Ferrell, 2015). With all of Starbuck’s unethical aspects and criticisms of their company, they are well-known for their ethical values. One of their top ethical attributes is their employee relationships. Their employee relationships with the company are what Starbucks is known for if you work for them. Starbuck’s offers their employees top healthcare and benefits. Naturally, their employee turnover rate is not high, and as I stated before, they are one of the top companies to be employed

The greatest threat of them all at this particular moment for Starbucks, or any other company for that matter, is the global economy crisis. In particular the source of the crisis, this lays in its home country the U.S. So if more than ¾ of the companies growth is depended on the U.S. then the

1. What factors in the global environment provide opportunities or threats for Starbucks? How do Starbuck’s strengths and weaknesses match up to its opportunities and threats?