Expresso Espresso

By 2003, the number of retail specialty coffee shops, cafes, kiosks, coffee carts, and roasters in the United States reached over 17,000, equating to nearly $9 billion in sales. According to the Specialty Coffee Association of America, 16 percent of adults in the United States drink coffee from one of these specialty outlets daily. (“Organo Gold”, 2008).

Café Latte, a new espresso bar, is about to open in Pocatello, Idaho. The business was formed as a limited partnership between three siblings and a friend, Cynthia, Stuart, and Rob Chan, along with Jeff Burns, respectively. The Chans are somewhat knowledgeable about running a business

In the city of Des Moines, there are several small homegrown coffee shops that offer a unique experience. Java Joes, Zanzibar’s Coffee Adventure, Mars Café and Smokey Row, just to name a few have made contributions to the Des Moines coffee scene over the years. Whether it is being covered in local art like Zanzibar’s is. Offering live music performances and poetry readings from time to time like Mars and Java Joes. Or being the one stop shop and giving an oh-so-cozy atmosphere as Smokey Row does for Drake Students and community members alike, there is no one coffee shop that combines each of these experiences. This is, yet.

Since Starbucks entered the coffee retail business, the company has made many trade-off business decisions. The first major trade-off was made when Howard Schultz wanted to acquire present day Starbucks from three entrepreneurs Baldwin, Siegel and Bowker. Therefore, Schultz prior to the acquisition made the trade-off to open his own coffee bar in 1986 instead of staying at Starbucks as the manager of retail sales and marketing. A bold feat, Schultz was able to replicate success and was offered to buy Starbucks for $4 million. At the time of the acquisition, many investors, including the former Starbucks owners, would not expect that the American consumer would pay a premium for coffee products. Schultz, after calculating the opportunity cost, was convinced that Starbucks would become a large coffee chain not only in the United States but internationally too. Reflecting this approach, Schultz’s trade-off worked. Starbucks, according to our book has revenue exceeding $13 billion and nearly 200,000 employees. The company has also expanded to 40 countries with 17,000 stores (Hill et al., 2015).

Starbucks’ lead in the specialty coffee industry exemplifies the result of deftly executing a well-planned business strategy. Moreover, Starbucks is well positioned for what is expected to be a continuing rise in the popularity of specialty coffee products. The question before Starbucks’ leadership, however, is what avenues will lead to Starbucks’ goal of remaining true to its core, the highest quality coffee products while providing a “total coffee experience” for its customers?

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.

Starbucks’s has been able to surpass its rivals and continue being one of the premier roaster and retailers of specialty coffee in the world since its inception in 1985. Such an accomplishment has been sustainable due to a concrete company strategy. When Starbucks’s first debuted back in 1985 it was the first coffee shop to bring specialty coffees to the mass market in the United States. Along with only purchasing and roasting top quality coffee beans they designed their strategy in a way which gave the customer the ability to customize their drinks to meet each person’s individual preference. They also included free Wi-Fi in all of their stores, which in turn increased an already competitive advantage even more by not only offering customers

Dear Diary, this is Howard Schultz writing to you today. I am sitting here reminiscing about my early years at Starbucks. I remember working at Hammarplast, when my curiosity got the better of me, and I wondered why this small coffee shop was ordering so many plastic cone filters. It is worth noting, that I had no ulterior motives when visiting Starbucks in 1981. Subsequently, I was impressed with their operation, and expressed my desire to work with the company. Consequently, it took me over a year to convince them, but eventually, I was awarded the marketing director position. Then, shortly after, during a trip to Milan I discovered the romance of coffee. Interestingly, I knew that there was a way to incorporate what I learned in Milan into the Starbucks brand, I just had to convince the owners. I remember the guys rejecting some of my ideas, thinking that my style was unsuited for the laid back atmosphere. Unfortunately, I was unable to convey my vision effectively, it was never the right time or the right path for those guys. Shortly afterwards, I left to pursue my dreams, of an espresso empire. Surprisingly, a few years later, I found out Starbucks was available to purchase. Somehow, I was able to raise the capital needed to purchase Starbucks, and this is when my dream began to blossom. Thus, I always felt that, I was the only one that was able to envision what the company could be. First, I started with the employees. Moreover, I wanted the employees to feel as if

Starbucks is the world’s largest coffee roaster and retailer of specialty coffee in the world. We have enjoyed great dividend returns over the past 5 years, and our growth has been on the rise. We are currently saturating the US market, while the emerging markets of developing countries offer many possibilities for growth and increased revenues. In our US market we should look at offering more items on the menu that complement our long-standing tradition of pleasing our customers. Exotic Juices, and snacks served with the same service could add a nice margin to the bottom line. In addition, the ability to offer a drive through service for the consumer that loves fine coffee but does not have the time to stop

The “Coffee Wars – The Big Three: Starbucks, McDonald’s and Dunkin’ Donuts” article focuses on the company analysis of the Starbucks brand and how its main competitors, McDonald’s and Dunkin Donuts, has affected their brand and driven competition higher. Even though there are many companies trying to enter the specialty coffee market, these three companies own the majority of the market share. With Starbucks’ top quality and above average prices they hold a different market than the fast coffee/food market of Dunkin’ Donuts and Starbucks; yet the competitive moves Dunkin’ Donuts has made over the years in order to compete with Starbucks and surpass McDonald’s has driven competition up between all three companies. The competition has stiffened ever more in the past ten years due to the changing economy. This led to “the big three” to come up with different techniques to gain competitive advantage over the other. Although the competition between these companies is to gain most of the market share, consumers are still loyal to a certain brand; this makes it difficult to gain each other’s clientele. McDonald’s continues to appeal to customers who want value and speed, Dunkin’ Donuts focuses on the middle-class, while Starbucks a customer who desires a higher quality product along with being recognized for using the brand.

The CEO (Chief Executive Officer), Howard Schultz pointed that the main reason from the decline of “Starbucks Experience” was that the number of Starbucks shops increased sharply from only 1,000 to 13,000 within ten years. Other people considered their brand has been commercialized, and the customers hadn’t had enough enthusiasms to appreciate every moment of their coffee any longer. He suggested that Starbucks should re-find its origin. Nevertheless, his advice apparently was opposite to the

As mentioned above, the specialty coffee industry had seen steady growth for years and the trend was expected to continue.

Starbucks provide a large in store seating with free wi fi and a take-out service which only a few retail shops offer. The main target customers for Starbucks are office workers, with enough income, whom are able to afford the high prices of their products (Gaudio, 2003). The company has worked hard to establish itself as the brand leader with its branding as the most frequently drank coffee and noticeable brand logo. Introduction of promotions like the Starbucks Card, allows a more convenient way for a person to
pay for
your
drinks
and
earn
rewards
for
your purchase (Starbucks Coffee Company, 2011).
Furthermore, in‐store
promotions
accompanied
by
new
products and
amenities like free internet use are all strategies that Starbucks use to maintain their position in the market (Vasudha, 2011).

Starbucks operates in the highly competitive retail coffee industry. The barriers to enter this industry are low. The number of firms is high. The product offerings are similar. Their competitors are quick-service restaurants, such as McDonalds and Dunkin’ Donuts, specialty chain coffee shops, such as Dutch Brothers and Tim Horton, convenience shops, such as 7-eleven, and local ‘Mom and Pop’ coffee shops (Starbucks Corporation,

Creating an economy- The CEO Joshua Liew recognizes the company to be a part of a revolution as he believes that the company has created its own economy that helps its chain of cafes to follow as an example of a business model. This business model focuses on meeting the needs of their customers by serving love and happiness with its products and at the same time training the staff to deliver high quality beverages that makes a consumer want to repeat its purchase. The company has not only done well in making a complex business unit simpler but has also given the flexibility to its diversified owners to exercise and operate the business on their