Control Mechanisms in Starbucks

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.

Financial controls have been another key component to Starbucks’ success. They monitor the individual cash flow from each store all the way up to the CFOs of Starbucks. Store managers can determine the stores needs based on proper information from the financial controls. An effective illustration of this is Starbucks’ more than 550 specialty cafes and kiosks in North America (Starbucks, 2010). The kiosks serve freshly brewed coffee to the public and provide instant

To continue off of the centralizing of decision making, the company should also consider a more mechanistic organizational structure. This is a setup that is used effectively by companies such as McDonald’s as the company has a process in place to generate just the right amount of burger patties, fries and soda syrup for each branch to run smoothly. With Starbucks implementing a structure such as this, it would allow for each manager to have a centralized oint of contact for all goods. This, in turn, will lessen the burden for each branch to find their own product vendor. It will

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

Starbucks has created a competitive advantage with their product quality by setting themselves apart from their competitors. “The Company has stayed with the upper-scale of the coffee market, competing on comfort rather than convenience, which is the case with its closest competitors, McDonald’s and Dunkin Donuts” (Mourdoukoutas, Panos). Consumers believe they are receiving a better product and experience when they purchase from a Starbucks as opposed to another large food service company that may sell coffee.

starbucks Corp., an international coffee and coffeehouse chain based in Seattle, Washington, has expanded rapidly since its opening in 1971. These outrageous success was due to its well-developed strategy vision which lay out the company's strategic course in developing and strengthening its business. Starbucks is a global corporation that sells authentic coffee in 30 countries, reporting revenues of nearly $5.1 billion in 2006. The main goal of Starbucks is to embrace diversity by applying the highest standards of excellence. Starbucks strives to perfect the relationship with the working class by making the service as fast as possible because they believe that every customer has their own personal rate. One

Starbucks is no doubt a phenomenon in the United States, but the brand wants to expand globally. Opening chains in various global locations such as Japan, Vienna, England; Starbucks wants to reach out to the coffee loving fans everywhere. Nevertheless opening chains globally is not that simple. There are many uncontrollable factors Starbucks need to focus on to make sure they are making profit as well has abiding by the country’s laws and regulations. Going global takes a lot of market research to make sure that the brand will be successful even with uncontrollable factors. Controllable factors can be tailored to fit the needs of each country. Starbucks has to find the happy medium so they don’t lose their identity overseas.

Nonetheless, Starbucks is big enough that they have created an oligopoly. But like any other company they face the increasingly large task of not only serve their clientele, but be able to still make a profit. In order to stay competitive and still be profitable they need to reconsider their current business plan and focus on the demand for the quality instead of the quantity. The basis of this rationale would be to modify its business plan in order to respond to the needs of it clientele and be able to deliver on their wants. There is no such thing as an ideal profitability methodology, but if the product keeps its value and it is able to withhold its product differentiation as well as brand identification, the profit margin and its ROI would speak for itself.

Starbucks utilizes a differentiation business model by offering an overall unique and high quality experience for the consumer. From the high-quality food and drink options, to the uniquely roasted coffee and supreme customer service, Starbucks aims to provide an experience unobtainable anywhere else. Starbucks also focuses heavily on rapid expansion by seeking out profitable geographical areas and overcrowding those areas with stores in order to exploit profits and slow down competitors. Starbucks’ compliments this with its horizontal acquisition strategy, extending their product line through acquisition of competitors. This provides Starbucks with a differentiation strategy focused on providing a diversified product mix

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

First, Starbucks has effectively applied the product differentiation strategy. To achieve it, the company has specialized in different product mixes, aligned its business locations to a specific ambiance that suits the context, and varied the customer experience, thus resulting in a higher customer service satisfaction. Further, Coskun, Basligil, and Baracli (2008) note that Starbucks prides in having their customers enjoy a premium service. Therefore, the company’s signature strategy has worked well thus far, as competitors find it difficult to imitate. Second, the enterprise has coordinated its acquisition and portfolio strategy, thus consolidating the market. As discussed in the background chapter, Starbucks has a portfolio network of eight brands under its stable. Third, Starbucks’ international expansion strategy has worked well, with a presence in 70 countries (Starbucks, 2017). These factors, coupled with its financial capability, offer Starbucks an edge over its

In general the coffeehouse industry in the United States was experiencing an increase in coffee consumption per capita due to the “Starbucks effect”. At this time Starbucks was operating approximately 20,000 stores in the United States and was living a fast expansion strategy worldwide.

The Starbucks Company is a purveyor of gourmet coffee that was founded in 1971 at Seattle’s Pike Place Market (Retrieved March 10, 2015, from http://www.starbucks.com/about-us/company-information). At that time Starbucks was a single storefront that offered premium, fresh roasted whole bean coffees. Since opening that single store Starbucks has grown to an international presence with branding that is recognizable worldwide. In addition, Starbucks has increased their product line beyond hot and cold coffee beverages to include hot and cold teas, packaged whole bean and ground coffees, high quality, fresh foods and coffee making equipment and supplies. Starbucks operates a total of 19,767 company operated and licensed stores and operates in 62 countries. In addition to the Starbucks’ brand the company also owns and operates other well-known brands such as Teavana and Seattle’s Best Coffee. (Retrieved March 10, 2015, from http://news.starbucks.com/uploads/documents/Starbucks_Fiscal_2013_Annual_Report_-_FINAL.PDF)

As such, large store will have a greater variety of products while smaller stores and kiosks will typically only carry the beverages, and a limited selection of whole bean and ground coffees, Tazo teas, and coffee accessories. They also adapt the Stores to local cultures. Starbucks has clearly achieved its goal of improving its business through better products. The next step for the company is to introduce these new products all their channels and develop new channels for distribution as well. In order to continue its global expansion, the company must never fail to take into account that the local tastes of the country before they introduce these new products into the market.

Starbucks then reorganized their supply chain – developing new cost-effective models, relooking into suppliers and reconsidering expenditures by ingredient instead of purchase price (Cooke, 2010). The supply chain was streamlined into 4 categories: Plan, Source, Make and Deliver, adopting a simplified system where coffee beans were manufactured in the same region where they are sold (Starbucks, 2012b, November 30). This was modeled by existing