External Analysis of Starbucks 1 Running Head: Starbucks

1.0.0. Executive Summary ...................................................................................................................... 5 2.0.0. Company History ................................................................................................................................ 8 2.1.0. Background ....................................................................................................................................... 12 Table 1: Starbucks Revenue Trends 2005-2010

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.

(3a): What trade-offs has Starbucks made? What different activity choices has it made from its rivals?

Founded in 1985, Starbucks is one of the largest coffeehouse companies in the world with over 16,000 stores in 50 countries. This report evaluates major internal and external factors affecting Starbucks using various analytical techniques. Based on the Starbucks brand in UK, it identifies suitable marketing strategies for Starbucks to expand its business in the UK market within the next two years. In line with the chosen marketing strategies, recommendations for the marketing mix are discussed.

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

For Starbucks corporations, this presents an opportunity to grow in the domestic market when currently there are 50% of Americans that drink coffee as well. This percentage also correlates to a 225.2 billion dollar impact in the U.S. Along with growth in coffee shops; the coffee industry had managed to be 1.6% of total gross domestic product in the United States. This opportunity received a weight of .10 in this External Factor Evaluation. This second rating was given a 2 for average.

2) Garthwiate, Craig; Busse, Meghan; Brown, Jennifer; Merkley, Greg “Starbucks: A Story of Growth” Harvard Business Publishing, July 2012.

Many multinational corporations in the coffee industry have succeeded tremendously such as Starbucks. Each of these corporations has strategies that helped them continue to expand to nations of different cultures, ethnicities, governmental practices, and locations.

Starbucks Corporation is an American company that was founded in 1971 in Seattle, Washington (Starbucks Company Profile, 2014). It operates in 62 countries around the world, serving its specialty coffee products, teas, food items, and other beverages (Starbucks Company Profile, 2014). Additionally, Starbucks Corporation has a multitude of license agreements with other locations where they sell their products, such as grocery stores and national foodservice accounts (Starbucks 2013 10-K Form for FY ended on September 29, 2013). In 2013, Starbucks reported a revenue of over 14 billion dollars (Starbucks 2013 10-K Form for FY ended on September 29, 2013). The success of Starbucks Corporation, however, comes from a carefully planned and well-executed business model. A thorough understanding of the competitive environment for Starbucks Corporation has allowed the company to flourish in an age where the intersection of convenience and quality are of utmost importance. This report will apply the 5-forces model in order to evaluate Starbucks Corporation’s competitive environment and assess its competitiveness in the near term.

Starbucks is undoubtedly an international brand. The history of coffee traces back to Ethiopia, Africa, India, Arabia, and Europe, and has been traded abroad since the 11th century. Understanding the demand and widespread market for coffee, Starbucks has triumphantly capitalized both the domestic market, and the varied international markets as well. Possessing about 6,500 retail sites worldwide, Starbucks’ net is spread across thirty countries and has been found as one of the most recognized brands all over the globe in equality to McDonalds and Toyota. This organization’s ability to build an international brand has been unprecedented- particularly since it represents a specialty

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 started in 1971 and by creating a cozy third place to customers beyond home and work and offering a slightly higher price yet fine quality coffee, within 25 years, it had opened just over 1000 stores. In order to maintain its leadership position, Starbucks had continued pursuing growth opportunities by selling Starbucks products through mass distribution channels and expanding its retail footprint. Along with the rapid expansion and success, Starbucks has encountered financial downturn in 2008, and the rise of competitors from both high price independent coffee shops, smaller coffee chains that resembled pre-expansion Starbucks model, to low price fast food restaurants chain McDonald’s and Dunkin’s Donuts has deteriorate the

With the development of economic globalization, “fast food” becomes a more and more substantial industry in the business world, which adapts to the pace of people’s life. Each organization spares every effort to stand forward the competition due to the fierce competition. In this article, we focus on the “Starbucks”, a prevailing coffee manufacturer in recent years.

Starbucks is one of the world’s leading coffee bars, which has been open since 1971. To survive in the vastly culturally differentiated environment, they had to introduce new products such as teas for the Chinese market. On the other hand, to be able to increase their seasonal sales and gain a competitive advantage in the coffee market, Starbucks have introduced Pumpkin Spiced Lattes which are only sold in the autumn/winter season. To increase their sales during these months even more, they can introduce a

This case assignment discusses the history of Starbuck’s accomplishments as they entered the American coffee culture heritage. In 1983, The chairman and CEO Howard Schultz traveled to Italy and had a dream to carry the Italy coffeehouse ritual back to the United States. Schultz was focused on creating an environment meeting company that makes good coffee but also be a social experiment. Starbucks today opened more than 19,000 stores functioning in 62 countries. Starbucks has numerous rewards that globalization has offered and they have significantly benefited from it, while in the coffee industry. Starbucks has a wide-range in marketing strategies to benefit the customers. During the different obstacles that Starbucks has encountered, they must stay reliable in quality and uphold to adjust to different customer values.