Company Internal Strength And Weakness Of Starbucks

As the world’s number one specialty coffee retailer, Starbucks sells coffee drinks, food items, coffee beans, and coffee-related accessories and equipment. In addition, Starbucks sells whole-bean coffees through a specialty sales group and grocery stores. Starbucks has grown beyond coffee into related businesses such as coffee-flavoured ice cream and ready-to-drink coffee beverages. The purpose of this paper is to analyze Starbucks business strategy, customer value proposition, company’s operations and the risks to financial results and reporting in the short term.

Within the coffee industry Starbucks Corporations has grown from a small shop to a leading coffee distributor, proving to have financial strength and determination to continue growth. With the weakening economy the continued success of Starbucks

* It is a global coffee brand built upon a reputation for fine products and services. It has almost 16,000 cafes in almost 40 countries.

Starbucks is dominant coffee brand in North America, which also is well-known worldwide. Established in 1971 as coffee shop oriented to a niche of coffee purists, in late 1980’s it turned to be a constantly growing chain of stores that sold whole-beans and premium-priced coffee to mostly affluent, well-educated customers. In years 1992-2002 company was showing at least 5% annual growth. And by 2002 Starbucks was serving already 20M customers in 5886 stores (both operated and licensed) around the globe, had $3.3 billion net revenues and was opening 3 new stores a day in average.

Starbucks has developed a brand image that has revolutionized coffee drinking experience. It has created an ambiance that is designed to attract customers and keep them coming back to Starbucks stores. It offers wide varieties of services such as comfortable seating areas with unique music and free wireless Internet for their customers while sipping their favorite coffee. This distinctiveness sets Starbucks apart from most of its competitors and has allowed the company to successfully grow and profit while charging premium prices for their products.

Starbucks is rated as the number one World’s leading coffee distributor. Customers satisfactions are always be in the center of their business and the company works consistently to maintain it as customer look forward to a unique experience when visiting one of Starbuck stores. With over 12,000 stores worldwide, Starbucks has always aimed at achieving and maintaining competition in the industry.  Starbucks success reside in many factors :  the company is admire and respected worldwide,employees are recognized and respected for what they contribute to the success of the company. Open communication

Additionally, Starbucks focuses on the customer satisfaction aspect, setting them apart from their competition. The purpose behind an organization 's presence is to give items or administrations that address the issues of its objective clients and benefit them definitively. The part of clients is basic to the organization 's survival and achievement. Through the purchase choices they make every day, they select which organizations will flourish and which will fizzle. They likewise give profitable criticism to the organization about its items and client benefit level (Hill, 2017). This criticism empowers the organization to enhance what it offers and to think of altogether new answers for client needs in view of what its clients requested. For some organizations, clients additionally assume a key part in the organization 's advertising endeavors by prescribing the organization 's items or administrations to other potential clients (Hill, 2017).

Starbucks smartly realizes that innovation will allow them to maintain the upper hand in the

Furthermore, Starbucks always involves with its customers and the community, providing customers with everything they want, and being continuously loyal to the customers while providing products that are good quality. Moreover, Starbucks also makes sure that the provided products are good at the beginning, rather than provides low quality products and makes improvement in the future. In order to do this, Starbucks gets the best ingredients possible and trains its partners properly so that is can prevent any defects in the products. To ensure that all products are with good quality, Starbucks always listens to feedbacks from its partners and its customers in order to better the process in which the products are made and the end result itself (Sandhu, M., Singh, R., Ratra, R. et

Starbucks distinctly stands out from other food or beverage chains in terms of the consistent quality of experience, that is symbolic of the company. A number of aspects have enabled the company to foster this consistency: a culture based on communication and centered around the customer, innovation in business practices, pioneering technology integration, an international appeal and steadfast commitment to its original ideals (for example, no franchising).

surprised by Starbucks’ initial success in its first six months of operation. The few issues that

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

2008 credit crisis in US caused the shortage in money supply and increase in unemployment rate and food prices, thus not only US resident but other countries’ residents as UK, Canada (both of them are key markets of Starbucks) must cut down the spending and shifted to cheaper alternative products (Hakizimana, 2012). It caused the 28% decline in profit of Starbucks on March compared to 2007Q1 (Herman, 2008) as same as the stock price (fell 3% in 2008Q4), meanwhile company could not reduce the price points/ production cost ( it may deteriorate Starbucks’ premium brand) (Prahalad and Ramaswamy, 2004) (Clifford, 2008), thus forced company to restructure and slow down the expansion of new stores in US, Australia, UK, China, etc. (Mitchell, 2009). In contrast, the buying power in emerging/ developing countries as Brazil, India now increases along with the increases in middle class residents (Hitt, Ireland and Hoskisson, 2013), thus Starbucks must consider to shift to those

Starbucks primary objective is to establish the company as the most recognized and respected brand in the world (Starbucks Website). Starbucks is a gourmet coffee shop so they must increase their name brand so as to justify their gourmet status. In order to maintain its success Starbucks must implement an effective implementation plan. A company may have a great product, but if it fails to identify a specific market, or to use a proper marketing plan, it will not be able to successfully reach the consumers. Over the years Starbucks has been successfully able to take simple activity carried out at home to the pinnacle of commercial success. By expertly executing their marketing strategy Starbucks has taking coffee service to an art form.

Factors in the global environment provide both opportunities and strengths for Starbucks. Opportunities such as increased revenues, further expansions, and achieving their goal of becoming the most respected brand worldwide. Starbucks also faced threats. These threats include dealing with growing antiglobalization overseas and their huge risk of less return on each overseas store, this deriving from overseas operations being run by local partners instead of Starbucks