Case study: Starbucks Coffee

1. In the beginning, how was Starbucks different from other coffee options for coffee drinkers in the United States? What activities and assets did Starbucks leverage to differentiate itself from competitors?

This assignment is based on the Starbucks case study; Trouble Brews at Starbucks written by Lauranne Buchanan and Carolyn Simmons (2009). The aim of this paper will be to discuss the the changing consumer experience, competitive landscape and external circumstances affecting marketing opportunities for Starbucks, while determining how Howard Schultz can provide Starbuck’s customers a greater long-term value.

Poverty, child labour, low wages, long working hours, no employments benefits and illiteracy caused by coffee industries in coffee growing communities due to increased demand of coffee farmer’s children are involved to do work hard with their parents to earn more and also remain illiterate.

The context change in form that Starbucks found itself competing with smaller chains that resembled its former pre-expansion model with competitors focusing in creating symbolic-expressive value and fast food restaurants that had started to offer specialty coffee with more aggressive advertisement at a lower cost. The competitive context changed for Starbucks because it’s focus in mass distribution channels and its retail footprint strategy stated its product within a standard performance product value; this affected the value perception of the product.

The Starbucks Company was founded in Seattle in 1971 by Jerry Baldwin, Gordon Bowker and Zev Seigel with a dream to inform American customers about the fine coffee drinking experience. In a short time, they became a multi-million-dollar company in the industry from a small coffee business house by keeping their standards high and only purchased premium quality coffee and by giving a unique experience to their customers. Currently, the company is considered on top in the coffee line, and has over 12,000 locations in more than 35 countries. (Starbucks Company Timeline)

For this extra credit assignment, I’ll be doing a Porter’s analysis of a well-known brand, Starbucks. And also talk about how there is a future competitive environment of the coffee industry. How other high-end coffee/tea drinks are growing in the market, and how there are so many café’s selling similar drinks. Starbucks is an American global company based in Seattle, Washington. They are the largest coffeehouse company in the world with 20,373 stores in 63 countries and territories. Since 1987, Starbucks has opened an average of two stores per day. In 2013, the company generated revenues of $14.0 billion. They are best known for their hot and cold beverages, and whole-bean coffee. Most of Starbucks stores sell pre-packaged food items such

The objective of this case study is to analyze why Starbucks was not meeting expectations in terms of customer satisfaction thereby losing customer loyalty. Whether or not to invest millions of dollars ($ 40 million) in each store to enhance the labor. How will it impact the sales and profitability if invested? Product mix and marketing approach will also be recommended in this paper.

a) The nature of Starbucks’ business is to generate income based on operating activities. When referencing the Statement of Cash Flows and looking at their operating activities, you can see that Starbucks generates $2,908.3M in net cash provided by operating activities. Investment is a significant item in this statement as well. The company spent $785.9M in investments in the year ending September 29th, 2013. Strong investment activities show that Starbucks is investing through buying and selling (Sales, maturities, and calls of investments $1,040.2M) and using their spare cash to invigorate future growth and fund future obligations.

The company competes with other sellers, like Dunkin Donuts and McDonalds, in the coffee market, but ultimately is overwhelmingly dominant. In the monopoly, Starbucks has had to create a unique identity and brand image for itself in order to succeed amongst competitors. Starbucks has been able to successfully differentiate itself from its competition by priding itself in quality assurance to its customers as well as its distinctive brand marketing strategy, which includes a large number of stores and little to no paid advertising; the company feels their high quality products speak for themselves and a high presence of storefronts allows customers to purchase their products at their own

After researching information I discovered that Starbucks identifies conceptions of product distinctiveness and merchandise distinction. They have utilized in on what the purchaser recognizes and had succeeded to identifiable distinguish themselves among other businesses’ goods or services. Furthermore, it was reveal to me that Starbucks recognizes this accomplishment depends extensively on the significance of the Starbucks product while banking on its

Starbucks dates back from 1971 and is based in Seattle, Washington. The company was founded by Gordon Bowker, Jerry Baldwin and Zev Siegl and it

Their marketing research shed light on the fact that their focus had shifted from the consumer towards store growth and product expansion. The research also highlighted the fact that they were lacking in customer service. Through these studies, Starbucks was able to identify what their customers wanted in terms of satisfaction. Consumers wanted Starbucks to make improvements to their service and also start offering better prices and incentive programs.

Licensing format would not give Starbucks the tight control over management, marketing and strategy in the licensee firm’s country in order to maximize its profitability. Under licensing agreement, control over marketing, strategy and decision making will be done by liscensee firm. Where normally the decision made is for the benefit and profit of licensee firm.

This paper will examine Starbucks, Inc. CSR and sustainability practices from the viewpoint of a potential socially responsible investor performing due diligence. Two indices will be used to compare and contrast the company 's CSR report which measure the CSR practices of corporations; also, the usefulness of these two indices for research purposes will be evaluated, critiquing the credibility and limitations of each index. A report will be formed addressing Starbuck’s CSR performance and strategies based on the analysis.

Starbucks believes in a good, competitive business strategy that is facilitated by passion for the product. They have good leadership and management approach. The Company’s motivation to develop the most recognisable brand was also based on the good planning and positioning strategy.