Starbucks is known for their Frappuccino’s; unfortunately they are on a downward spiral in sales due to competitors such as McDonalds. In 2008 Starbucks admits to its losses due to their competitors. “Company executives now freely admit that such thinking is largely to blame for the woes that led to Tuesday’s announcement that Starbucks will close 600 U.S. stores and eliminate thousands of jobs. The coffee giant’s missteps have come at a spectacularly bad time, hitting as the economic slump deepens and consumers are seeing their discretionary spending eaten up by rising gas prices and grocery bills (Linn).” Starbucks is going to continue losses unless they come up with a new marketing strategy to promote their products. There could be …show more content…
Starbucks positions itself as a place college students can hang out, study, write term papers and meet people. A Starbucks appeal to this consumer directly through introducing technology as soon as it comes available, focusing on social networking and actively cultivating a “cool” image. The young adult audience grows 4.6 percent each year (O’ Farrell).” However, the majority of the advertising is catered to Adults around the ages of 25 to 40. Adults seem to prefer a pick me up first thing in the morning on their way to work. Most Starbucks today have a drive thru to make it faster to grab and go.
Consumer Decision Making “When an individual buys a product, there is a process which occurs for making their decision. This is the consumer decision-making process, which includes: recognition, information search, evaluation of alternatives, purchase, and post purchase behavior (Cachola).” When buying a coffee or food such as a cookie from Starbucks there has to be some type of appeal to the product. For many consumers that would be the aroma from the coffee as soon as one would to walk into the building. The Consumer Decision Making could be the answer, by advertising different brands of coffee and food this could appeal to a younger crowd such as teenagers and kids.
STARBUCKS SWOT
Macro SWOT MATRIX
STRENGTHS
WEAKNESSES
OPPORTUNITES Opportunity: Applying new advertising to keep up with competition. Strength: Providing Starbucks with a
Starbucks’ primary target market is men and women ages 25 to 40. They account for almost half, 49 percent, of their total business. Starbucks’ appeal to this consumer age group through hip, contemporary design that is consistent in its advertising and decor, and working to keep its products current as status symbols. Customers tend to be urbanites with relatively high income, professional careers and a focus on social welfare. This target audience grows at a rate of three percent annually (O’Farrell, n.d.).
KEVIN R. JOHNSON, 48, has served as the Chief Executive Officer of Juniper Networks, Inc., a leading provider of high-performance networking products and services, since September 2008.
In Amanda Roadarmel’s essay “Starbucks: More Than Just Coffee” published in the Arak Journal, she describes the many reasons why people go to Starbucks and the marketing ploys behind them. Using college students as one of her main examples, she describes the ways in which Starbucks caters to their customers. She argues that Starbuck’s main draw is not their food and drink but the lifestyle that is associated with the chain. This lifestyle is what draws people to pay four dollars for coffee as the consumer sees the price as not just a coffee price but the price its cost for the comfort of being a Starbucks person. Starbucks describes its average consumer as middle aged, well-educated, middle class Americans.
The cost of revenue, or goods sold, is 86.3% of the total expense distribution for Starbucks.
We evaluated the financial performance of Starbucks by computing various ratios based on the company’s most current audited financial statements. Specifically, we evaluated the firm’s liquidity, operating profitability, capital structure, and market value. Additionally, we identified Starbucks’ competitors and benchmarked the company’s performance against the peer group. Finally, we defined what we believe the key factors are causing the current condition. Our assessment and results are presented below.
Starbucks (Starbucks) is a publicly held company that sells gourmet coffees, as well as, a sandwich and desert menu. They operate in the United States, as well as, international countries. Starbucks has delicious coffees that are very popular with the public and has a growing popularity. By comparing Starbuck's financial information with the financial information of one of their biggest competitor's, Dunkin Donuts (Dunkin Donuts), it will show the actual competitive edge of Starbucks.
2) Garthwiate, Craig; Busse, Meghan; Brown, Jennifer; Merkley, Greg “Starbucks: A Story of Growth” Harvard Business Publishing, July 2012.
The company that I am writing about is Starbucks, the international coffee shop chain. The company's financial statements for this analysis are from the FY2011 Annual Report and 10-K. The company has 10787 stores in the United States, of which 38% are franchised and the remainder are company-owned. The franchise model is more common when the company operates internationally. There are 6216 Starbucks stores internationally and of these 63% are franchises, with just 37% company-owned. The franchise model for international expansion has been utilized to help Starbucks expand quickly in foreign countries and to mitigate foreign political risk and to ensure that the product/service offering is tailored to local tastes (Thompson, 2012). The company is now in the process of buying back some overseas franchise stores in order to retain more profits for itself (Franchise Press, 2011). This paper will take a look at the company's most recent annual report to analyze the financial statements.
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’ shares have grown more than 1500% over the past decade. Financially, it has been an oak tree in an ever changing economy with customers that have ever changing demands. However, there has been increased concern for the financial viability of the coffee shop a recently announced plan to close down over 600 stores that were said to be underperforming domestically. That means that more than 1,000 jobs will be eliminated. As scary as that is on the local front to top management, the executive staff feels that it is the only way to recover from it’s shocking $108.7M loss for the 2nd quarter this fiscal year.
Regarding demographics, we can divide the business into age, family, gender, income, occupation, education, religion, race, generation, nationality and social class. For distinguishing customers ' group, demographics variables are the most popular one to use (Kotler, P. 2003). Starbucks ' essential target market are men and women matured 25 to 40. They represent just about a large portion of (49 percent) of its aggregate business. The young adults comprises up to 40 percent of Starbucks market. According to Price, Starbucks most of the target market is socio economic class C1 and B. Just because of higher price, people who are included in this class can easily afford Starbucks coffee.
Thesis: While Starbucks has been an industry leader in the specialty coffee market, rapid overexpansion and current economic conditions have caused it to lose its market dominance. Is the company strong enough to recover?
The “Coffee Wars – The Big Three: Starbucks, McDonald’s and Dunkin’ Donuts” article focuses on the company analysis of the Starbucks brand and how its main competitors, McDonald’s and Dunkin Donuts, has affected their brand and driven competition higher. Even though there are many companies trying to enter the specialty coffee market, these three companies own the majority of the market share. With Starbucks’ top quality and above average prices they hold a different market than the fast coffee/food market of Dunkin’ Donuts and Starbucks; yet the competitive moves Dunkin’ Donuts has made over the years in order to compete with Starbucks and surpass McDonald’s has driven competition up between all three companies. The competition has stiffened ever more in the past ten years due to the changing economy. This led to “the big three” to come up with different techniques to gain competitive advantage over the other. Although the competition between these companies is to gain most of the market share, consumers are still loyal to a certain brand; this makes it difficult to gain each other’s clientele. McDonald’s continues to appeal to customers who want value and speed, Dunkin’ Donuts focuses on the middle-class, while Starbucks a customer who desires a higher quality product along with being recognized for using the brand.
Starbucks will be the first come in your mind when you want to have a cup of coffee. Don’t you feel curious about why is Starbucks so successful? This report explains how Starbucks take advantage in consumer purchase decision making process, how does Starbucks attract customer, how does Starbucks segment its market and new trends in society affect purchasing process.
Like its major competitors, Starbucks ' marketing strategy has relied heavily on establishing a strong brand identity and promoting brand loyalty sufficient enough to induce customers to pay a reasonable premium for its products. Starbucks has a competitive advantage over its competitors because in the past few years they have introduced a ‘Starbucks Evening’ menu, which includes