From a Single Cafe' to Starbucks of Today Essay

Decent Essays

The first Starbucks location opened in 1971 with the original location in Seattle Washington, the heart of Pike Place Market. Starting as a single shop specializing in high quality coffee and brewing products, the company grew to be the largest roaster in Washington with multiple locations until the early 1980’s. CEO Howard Schultz, recognized a great opportunity and began working with the founder Jerry Baldwin. After a trip to Italy to find new products, Schultz realized an opportunity to bring the café community environment he found in Italy to the United States and the Starbuck’s brand we all know today began to take form.
The company experienced rapid growth in 1992 by going public, and growing tenfold by 1997, with locations around …show more content…

The company prides itself on creating an environment for people to meet, outside of work and home, what they call the “third place” (CNBC Business, 2011).
To formulate a differentiated business level strategy Starbucks must evaluate their customer needs, customer groups, and their unique competencies. This will be the way that Starbucks differentiates themselves from other firms competing in the coffee and specialty products industry. Starbucks has effectively differentiated themselves from their competitors in a manner that establishes brand loyalty and satisfies customers. This level of differentiation would not be possible without working together to achieve a common goal: offering customers a premium product while striving to obtain a profit.
Using the five forces model of competition Starbucks provides quality coffee with a unique experience, which separates them from their competition. The new single cup brewing coffee line is spanning differentiation and low cost- leadership. While it is at a lower cost than a normal cup of Starbuck coffee and convenient for home coffee users, it is still unique from other products in the market. The gifts that are sold in the Starbuck chains are in the focused differentiation category as they accommodate the coffee lover, and are unique items found only in the Starbucks stores.
The specialty industry consists of chain restaurants that offer primarily specialty or gourmet products. To compete effectively, firms must be

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