Starbucks Five Forces Model

Starbucks has reinvented itself numerous times over the past 40 years and continues to experience substantial growth and contractions. They started as a small company, with its first location in Seattle’s historic Pike Place Market in 1971, and today, “there are more than 21,000 stores in 66 countries.” They have grown from not only selling coffee, but also offer a wide selection of teas, specialty drinks, pastries and an assortment of sandwiches for breakfast, lunch or dinner. They have also diversified their product offerings to include a wider variety of coffee beans, drink ware, and equipment to make coffee or tea at home.

Starbucks has created a competitive advantage with their product quality by setting themselves apart from their competitors. “The Company has stayed with the upper-scale of the coffee market, competing on comfort rather than convenience, which is the case with its closest competitors, McDonald’s and Dunkin Donuts” (Mourdoukoutas, Panos). Consumers believe they are receiving a better product and experience when they purchase from a Starbucks as opposed to another large food service company that may sell coffee.

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

Therefore this budget would help in their orders in good time. Starbucks initially believed in employee satisfaction to be a factor greatly enhancing customer satisfaction and this investment will cause less stress on the employees as there will be extra time for customer intimacy which is a key factor in the value proposition at Starbucks. However since the investment is huge, it is advisable to conduct a primary market research and test this idea in the main franchises and proceed with the investment once all factors are

Starbucks’ lead in the specialty coffee industry exemplifies the result of deftly executing a well-planned business strategy. Moreover, Starbucks is well positioned for what is expected to be a continuing rise in the popularity of specialty coffee products. The question before Starbucks’ leadership, however, is what avenues will lead to Starbucks’ goal of remaining true to its core, the highest quality coffee products while providing a “total coffee experience” for its customers?

Starbucks today is widely recognized as the megabrand for coffee, and there clearly are no close competitors that have its international recognition and scope. Starbucks has grown to employ over “160,000 people and generates about 13.6 billion dollars annually” (Forbes). Much of Starbuck’s success is attributed to a man with a clear vision and drive: Howard Schultz. Howard Schultz’s passion for delivering quality coffee along with a positive café experience has given him the motivational determination to demonstrate exceptional leadership traits. This paper will give a brief overview of the history of Starbucks, and will then investigate the changes that were made after Schultz stepped in. Furthermore, problems that

One way that Starbucks was able to constantly strive for innovation was by controlling the cost

Within every company, there is always a need for a multitude of structures such as organization and control. Without defining how the company will run and who will run each portion, this global giant could crash. The structures contain everyone within Starbucks from the individual branch employees and supervisors to the presidents and CEO. Each team member has an important role and should take that role with respect and passion. Each structure set forth determines the modes in which Starbucks will operate and perform. Like any other chain, Starbucks has placed an organizational

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, an American coffee company which was established in the year 1971. At that time it has only one store in Seattle’s Historic Pike Place Market, Washington. It covered a long journey from that single store to hundreds and thousands of stores in different countries. It has 9 stores in Seattle till 1987. The professional management and strategies used by Howard Schultz made the company globally successful. The result of his efforts lead to the expansion of stores from 400 in US to 4700 in all over the world .It followed the policy of joint venture and foreign assistance to expand its business. The aim of the report is to analyze the management strategies used in the case of Starbucks and apply our theory of knowledge. This will help

Starbucks provide a large in store seating with free wi fi and a take-out service which only a few retail shops offer. The main target customers for Starbucks are office workers, with enough income, whom are able to afford the high prices of their products (Gaudio, 2003). The company has worked hard to establish itself as the brand leader with its branding as the most frequently drank coffee and noticeable brand logo. Introduction of promotions like the Starbucks Card, allows a more convenient way for a person to
pay for
your
drinks
and
earn
rewards
for
your purchase (Starbucks Coffee Company, 2011).
Furthermore, in‐store
promotions
accompanied
by
new
products and
amenities like free internet use are all strategies that Starbucks use to maintain their position in the market (Vasudha, 2011).

The company has also developed a structure and control system. With the realization that human capital holds a vital role in the development and sustainability of any institution, that of Starbucks included, it has taken to task to protect the same. To develop this, the company has an elaborate system that ensures the production levels of the company are met with pride. This like other leaders in the same has entailed ensuring they have an empowering corporate culture, topped by ensuring their employees enjoy competitive benefits.

In a world where consumers value convenience, price, service and quality, Starbucks has become a major identifiable brand and competitor worldwide. Starbucks operates under the retail coffee and snack shop industry and relies heavily on consumer confidence, spending, preferences and overall economic climate, making the industry highly volatile. The hiring and use of employees to perform the daily operational tasks and duties to provide service and various industry products become an important element in this industry. Because the skill set of the individuals hired in this industry are relatively low, the cost in wages are minimal. The industry reportedly has generated over $30.2 billion in revenue, $1.8 billion in profit and has seen a growth of 2.7% from 2009-2014. Future projected annual growth in this industry is forecast to grow 3.8% over the next five years (IBISworld, 2014).

Starbucks which from small businesses to todays global cafe, has managed to become one of the best coffee chain and suppliers in the world. As early as in 1971, three friends (Jerry, ZEV and Gordon) sell fresh coffee beans and accessories in Seattle are the idea of passion. Things started to change; Schultz wanted to sit environment friendly coffee service development the business. Schultz provides coffee spread the idea of sitting together in a culture, and since that time, Starbucks is in a fast way to start a unique development way. According to survey that Starbucks has 16706 stores in more than 50 countries around the world also has 8850 companies to operate 7856 licensed stores. (Starbucks material, 2010). People want to drink a cup of coffee at Starbucks and they real want a place to have a rest, relaxed and talk. For the generation Y, they want to talk and drink coffee with Wi-Fi and friends. Additionally, that is what Starbucks is trying to create in the near future: coffee and the newspaper, a hyper local niche sites nationwide Wi-Fi. (Stefanie, 2010) Meanwhile, Stabucks’s Products are not only is the coffee but also is a kind of carrier. In addition, Starbucks want to send customers a unique style by the carrier coffee. Coffee consumption is a largely cultural consumption level, cultural communication need coffee shop to help people feel the culture of Starbucks and infect customers by this unique cultural and let the customer enjoy the

Moreover, it can be said that the company has to resolve the distribution and operation management problems that they are facing from some time as it is affect the business turnover of Starbucks since the last few years. It is important for the company to take serious measures that will further help the company to increase and enhance the working standards of the company