Starbucks Case Analysis

Starbucks is a “premier roaster, marketer and retailer of specialty coffee” (Marketline 2012). This company is globally recognized because of their vast amount of stores, consisting of more than 17,000 retail stores in over 55 countries. Most retail stores are in highly populated areas, like “downtown and suburban centers, office buildings, university campuses and in select rural and off-highway locations” (Marketline 2012).

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

The company founded Starbucks has experienced rapid growth since its first store opened in Seattle in March 1971. The impressive expansion over recent years has left it penetrate within the market of the top 100 best global brands of 2012, according to Interbred, and also it has been considered by Fortune magazine as one of the 500 largest companies in the world. Starbucks is now the largest coffee retailer in the world.

When Howard Schultz first experienced Starbucks Coffee, Tea and Spice he was immediately smitten by the operations and business culture, and actively pursued a job with them. At that time, Starbucks Coffee, Tea and Spice was an 11 year old coffee shop with six stores in Seattle specializing in high-quality coffee beans. Starbucks Coffee, Tea and Spice desired to bring fine coffee to their customers, so to that end, they imported quality coffee beans, roasted them to their own exacting specifications and sold the beans and high-end coffeemakers to their customers, so customers could make superb coffee at home. The only coffee brewed onsite was the sampling of a roast, in order for a customer to determine if they wanted to buy that

I've chosen the Starbucks Corporation on which to do my case assignment for the session. I first became interested in Starbucks while working on a paper for a previous marketing class. I became intrigued at the entrepreneurial spirit that such a large corporation had managed to maintain throughout its massive expansion. Starbucks corporation, unlike many of its now-defunct rivals, has done an outstanding job since its meager beginnings in 1970 with the execution of its strategic process; resulting in it currently owning 40% of the specialty coffee market and boosting annual sales exceeding $7 billion according to Burt Helm. Historic successes and recent turmoil within the company, including a near 40% decline in 2007 in profits (Sullivan

Starbucks has always taken exceptional care in keeping its brand value.  In fact, Starbucks prides itself in its brand, particularly the power it has to keep its customer base strong. Before analyzing this loyal customer base it is best to consider the particular characteristics of the brand that has led to Starbucks having such devoted patrons.

However, there was a significant differentiation between Starbucks and the independent specialty coffeehouses. The brand image of Starbucks also had some rough edges. More customers were beginning to agree with the fact the Starbucks cared primarily about making money and building more stores. Also, despite the high customer snapshot scores customer satisfaction scores were declining. It was believed that there was a service gap between Starbucks scores on key attributes and customer satisfaction. In polls by customers “improvements to service,” particularly speed of service, was most mentioned for improvement.

12,000 employees will lose their jobs…Starbucks will offer relocation packages to many employees, severances to others.

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 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

The objective of this case study is to analyze why Starbucks was not meeting expectations in terms of customer satisfaction thereby losing customer loyalty. Whether or not to invest millions of dollars ($ 40 million) in each store to enhance the labor. How will it impact the sales and profitability if invested? Product mix and marketing approach will also be recommended in this paper.

a) The nature of Starbucks’ business is to generate income based on operating activities. When referencing the Statement of Cash Flows and looking at their operating activities, you can see that Starbucks generates $2,908.3M in net cash provided by operating activities. Investment is a significant item in this statement as well. The company spent $785.9M in investments in the year ending September 29th, 2013. Strong investment activities show that Starbucks is investing through buying and selling (Sales, maturities, and calls of investments $1,040.2M) and using their spare cash to invigorate future growth and fund future obligations.

In 2002, Starbucks was a high-growth company, successfully implementing ambitious retail expansion and product innovation in spite of the economic downturn. However, despite uninterrupted growth, recent market research suggested that everything was not going according to plan for the company. Starbucks built its empire on a foundation of customer service, but data collected in 2002 suggested that its consumer base did not feel a high level of satisfaction at Starbucks stores.

Sarbucks is the leading company in the coffee industry. The company prides itself on engaging with communities and providing customers with unique experiences to ensure future success and growth. All the units have been properly equipped to enable them operate in different atmospheres. Through its global Starbucks experience reputation and its customer engagement, the organization is up to the challenges of the current market demands (Jones & Hill, 2007).

The question is what exactly goes into the process from cocoa beans in a field to a steaming cup of delicious coffee. Starbucks has created an amazing strategy of Supply Chain Management that spans across almost nineteen countries, that means cocoa beans can come from one country while milk could come from an entirely different nation hundreds of miles away. Through this global resource span Starbucks can expand the company and reach more countries than ever before. Starbucks also makes sure that they supply the best ingredients to their coffee drinkers for a lower price. All raw materials are sent to roasting manufacturing and packaging plants. Starbucks itself has six roasting manufactories, which seems very few for such a big company, but they are using a very effective centralized system.