Starbucks Company Analysis

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SYNOPSIS Starbucks Corporation, originally founded in 1971, but purchased by Howard Schultz in 1987, is the market leader in selling gourmet coffee (Starbucks, 2008). Starbuck's main objective is to establish itself as the most respected and recognized coffee brand in the world (Fact Sheet, 2008). Starbucks has accomplished this objective and experienced much success through their competitive strategy of clustering several stores within the same community and through their distinctive competencies of roasting and selling the quality coffee while providing high quality customer service. The question is, can Starbucks continue their market share growth with rising competitors? Should they focus more on their international operations?…show more content…
Fair trade coffee also bypasses the coffee trader, therefore giving the producer higher profits. Fair trade coffee growers are guaranteed a minimum price of $1.26 per pound for their coffee. If the world coffee prices rise above this floor price, farmers will be paid a small premium $0.05 per pound above market price (Coffee Research Institute, 2006). This contributes to helping coffee farmers stay out of debt and provides some stability for both producers and sellers of coffee to an unstable market (Coffee Research Institute, 2006). Environmentally, the main negative impacts from coffee production include habitat conversion, soil degradation, pesticide use, and declines in water quality (WWF, 2005). The most serious impact of coffee cultivation continues to be the conversion of natural forest areas into flatlands in order to plant coffee. Unfortunately, a driving force of habitat conversion is the increasing market for high-grade specialty coffees (WWF, 2005). Many companies, however, like Starbucks, work with local farmers to ensure the best economic return and least detrimental environmental impacts as possible. It is true that recent trends in the coffee industry point to a decline in demand and sales revenues; in general, coffee
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