Starbucks : A Global Coffee Company

| Yes, demand elastic is in the $6 - $10 price range or less than 1. Ed = 0.75 in the $3 - $6 range the range of demand would change by 20 percent if the price changed by 20 percent. If price fell from $15 - $10 TR would decrease.

In 1994 Starbucks broke into new markets in Minneapolis, Boston, New York, Atlanta, Dallas, and Houston. (Reference for Business, n.d.) In 1996 Starbucks continued their growth by venturing overseas for the first time to Japan, Hawaii, Singapore, Taiwan, Thailand, New Zealand, and Malaysia, China and South Korea, Philippines, Kuwait, Lebanon and the UK. (Reference for Business, n.d.) Growth also continued here in the U.S. with 2,200 locations by the year 2000. Starbucks rate of growth in the early 2000’s pushed the chain past the 10,000 unit mark. (Reference for Business, n.d. pg. 4) Today Starbucks is the largest coffeehouse company in the world ahead of UK rival Costa Coffee, with 21,160 stores in 63 countries and territories, including 12,067 in the United States, 1,570 in China, 1,451 in Canada, 1,070 in

*Starbucks pay does not come close to match the work load of their employees that created dissatisfaction among them affecting sterling service and even the coffee itself.

Elasticity of Demand also referred to as Price Elasticity of Demand in Economic measures is based on the effect of how the quantity demanded is changed when there is change in the price.With respect to price it is the quantity demanded responsiveness degree. For example lets consider a case in the below figure, where there is elastic demand when the curve is almost flat. You can see that, the quantity decreases a lot if there is a change in price from $.75 to $1. There can be many reasons for this

The determinants of demand can causes some effects on demand curve . if demand increases this leads

Price elasticity of demand is a measure of the relationship between a change in the quantity demanded of a particular good and a change in its price. Price elasticity of demand is a term in economics often used when discussing price sensitivity. The formula for calculating price elasticity of demand is:

Starbucks Corporation is an American coffeehouse chain founded in 1971 starting out as only one store retailing in whole bean, tea, and ground coffee in the Pike Place Market in Seattle, Washington (Starbucks Company Profile, 2016). Starbucks comprises four operating segments along other non-reportable operating segments. The operating segments include Americas, China Pacific, EMEA, and Channel Development (Starbucks Company, 2016).

These are the number of buyers, the tastes (or desire) of the buyers for the commodity, the income of the buyers, and the changes in price their expectation and demand of the product would shift of the entire demand curve to the

Starbucks entered the coffee market in 1971 opening their first retail store in Seattle’s Pike Place Market as a roaster of ground coffee, tea, whole beans, and spices. In 1982, Howard Schultz was appointed operation and marketing retail director. After visiting Italy in 1983, Schultz fascination with Italian coffee bars inspired him to bring a similar type of coffeehouses to the Seattle area. Schultz idea was to offer a place where customers can relax, enjoy coffee, and engage in conversations. After several years, Schultz decided to leave Starbucks and open his own coffee company called II Giornale that offered a variety of espresso drinks and brewed coffee made from Starbucks Arabica coffee beans. In 1987, Schultz merged II

Starbucks is a global coffee company headquartered in Seattle, Washington. The company has been able to draw the attention of many customers, young and old, despite its overpriced coffee. The cafe is known for not only its quality of coffee and assortment of drink options but also the ambiance, including comfortable couches and soothing music. Last year, Starbucks generated revenues of $10.7 billion. That is a profit of about $1,760 per day for an average Starbucks coffee shop. In this paper, Porter’s five competitive forces (Threat of new entrants, Bargaining power of buyers, Threat of substitute products or services, Bargaining power of suppliers, and Rivalry among existing competitors) will be examined through the lens of Starbucks.

Demand is a curve showing the various amounts of a product consumers want and can purchase at different prices during a specific period of time. Supply is a curve showing the different amounts of a product suppliers are willing to provide at different prices. Equilibrium price and quantity are determined by the intersection of demand and supply. Price elasticity of demand (PED) indicates the responsiveness of consumers to a change in price, and is reflected in the relative slope of demand. Production possibilities curves (PPC) show the maximum production of goods that can be produced by an economy. Given that all of the resources are being used fully and efficiently and the technology is fixed in the economy, shown in Figure 1 is a PPC curve of the market of cars and bicycles.

Today, Coffee may be a large international business employing over 20 million individuals. This commodity ranks second solely to crude oil in terms of greenbacks listed worldwide. With over 400 billion cups consumed per annum, coffee is world’s preferred drink. within the U.S. sales of premium specialty coffees have reached the multibillion-dollar level and increasing considerably on an annual basis.

Besides that, Starbuck realize that the element of human is a very important chain in success in the industry. But they are not start with the top of the human resource but from the bottom one. That is why they have a lot of places to educate for the new employees. According to many survey and research, Starbucks is one of business place have the best customer service. Every time I come to Starbucks, the employees there behave very friendly and helpful. They tried to serve customers with the best behaviors which they studied from Starbucks. Even if any customers complained anything about the drinks or food, they also be friendly and smile, after that, that employees tried to fix the problems. That makes people are willing to spend money in this brand name than the others like Dunkin’s Donut or Mc Donald even though they are also have some similar products. The products that Starbucks sell in their store is not only the coffee but also the value of brand name and the feeling of respect when people come there. Starbucks can become a place for students who want to go for group work, it is also become a place for people who can come for do business and discussion or the basic idea is a place to enjoy a cup of coffee. In any purpose, Starbucks can perfectly become a good place for that. The atmosphere which Howard tried to create for Starbucks is suitable for many kinds of people.

According to (Begg, Fischer, and Dornbusch, 2003, p.16-89), the outward movement of the supply curve raises the supply level in the market of the commodity under consideration at each price also with a provided demand curve. There is a decline in the equilibrium price as indicated in the diagram above from point P1 to point P3, along the curve with an increase in the level of output bought as well as sold, as shown above from point Q1 to Q3. Therefore, the change in supply levels leads to expansion of the supply curve on the demand curve. The equilibrium price as well as quantity in a market will shift, if there are changes in market supply together with demand. As an illustration, the diagram below demonstrates.

Has Starbucks has done well in Turkey? What are some of the common growth drivers in terms of consumer characteristics, market characteristics, and entry strategies across USA and Turkey that might account for Starbucks’ success?