Starbucks : The Key Success Factors

Within the coffee industry Starbucks Corporations has grown from a small shop to a leading coffee distributor, proving to have financial strength and determination to continue growth. With the weakening economy the continued success of Starbucks

Starbucks is dominant coffee brand in North America, which also is well-known worldwide. Established in 1971 as coffee shop oriented to a niche of coffee purists, in late 1980’s it turned to be a constantly growing chain of stores that sold whole-beans and premium-priced coffee to mostly affluent, well-educated customers. In years 1992-2002 company was showing at least 5% annual growth. And by 2002 Starbucks was serving already 20M customers in 5886 stores (both operated and licensed) around the globe, had $3.3 billion net revenues and was opening 3 new stores a day in average.

Starbucks is a highly known company and a predominant brand in multiple countries. The idea behind all of it was to not only serve name brand coffee but to be a third home for everyone throughout their busy days. Founded in 1985 by Jerry Baldwin and Howard S. Schultz, they settled the company in Seattle Washington. The owners found their niche in the food and drink market, and the brand of Starbucks makes each purchaser know what kind of quality they are purchasing. It has now become the world’s largest international brand and product with great success. Starbucks internal capabilities of the company help make it more successful while dealing with the external environment to find the perfect balance to create a competitive advantage and

Starbucks is rated as the number one World’s leading coffee distributor. Customers satisfactions are always be in the center of their business and the company works consistently to maintain it as customer look forward to a unique experience when visiting one of Starbuck stores. With over 12,000 stores worldwide, Starbucks has always aimed at achieving and maintaining competition in the industry.  Starbucks success reside in many factors :  the company is admire and respected worldwide,employees are recognized and respected for what they contribute to the success of the company. Open communication

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.

quality of the products connected with a fair price attracts many coffee lovers. Starbucks also

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 main strengths includes their financial performance and establishment of a brand that draws in a large group of loyal consumers. High financial performance has allowed Starbucks to have the leverage and funds available to expand globally as well as invest in premium products. In addition, Starbucks has been able to use their financial leverage to create their brand of a premium coffee business that treats employees and the environment with respect. Thus, creating a desirable place for quality employees as well as a desirable place for consumers to spend their money.

Additionally, Starbucks register patents for their unique products where attract customer who looking for special or uncommon products. Starbuck’s every retailing outlet stores maintain a good environment for coffee likers. Where most of coffee likers are office works, they prefer a good location for refreshing their mind and a good cup of coffee to motivate them to continue on their works. Another main strength that Starbuck has is the fact that company hires and trains their employee with a high standard service mind, where they are motivated and in love with their job. Lastly, Starbucks maintain a good relationship with both suppliers and customers. Meanwhile on supplier’s side, they purchase in bulk amount to benefit from economic of large scale. With customers, they have a huge customer base loyalty since their product is socially accepted addiction as a luxury coffee brand. On the other hand, Starbucks also has many weaknesses. As a giant in coffee retailing market, it has a large market size. It’s hard for them to have an instant change on its system completely. Second, Starbucks mostly focus on their external expansion, this lead to lack of internal

In the following research we will look whether Starbucks will be able to launch an aggressive expansion throughout Mainland China, a country known for its tea drinking history dating back to 5,000 years. Starbucks is known for its ability to locate the business outlets in perfect spots as well as market their products in beneficial ways. This report will try to analyze the three main questions:

Starbucks uses innovative and cost effective marketing strategies to build its image including billboards, freestanding inserts in newspapers products and samplings, as well as innovative schemes such as paying for a day of free parking in a downtown area. Strong brand image helps the

The Starbucks Corporation is the largest coffeehouse worldwide and has more than 16,858 stores in 50 countries, including 11,000 in the United States alone (The McGraw-Hill Companies, 1999). The company’s products include drip brewed coffee, espresso’s, cappuccino beverages, cold drinks, hot drinks, smoothies, tea, coffee beans, salads, sandwiches, snacks, pastries, ice cream, and Starbucks merchandise such as mugs and tumblers (The McGraw-Hill Companies, 1999). The company sells premade coffee and started the coffee bar in which they are known for today. The coffeehouse gives customers a quiet environment to drink coffee, read a book or browse the Internet using Wi-Fi connection the company has available consumers (The McGraw-Hill Companies, 1999).

One of the main keys for success for Starbucks in building the brand is their focus on quality, starting by the quality of the whole bean, the freshly roasted gourmet beans, its packaging, transportation, until its brewing. This has served as a main differentiator between Starbucks and other brands. Starbucks has succeeded to position itself as a unique quality coffee provider.

Millions of Americans these days depend on the glorious caffeine rich nectar provided to them daily by the local Starbucks chain store. With it is humble roots firmly planted in Seattle Washington, this little coffee shop has turned from a novel idea, into a veritable necessity for Americans on the go. The amazing success of Starbucks can be attributed, in part, to tactical planning. It was through tactical planning that the management team behind Starbucks was able to be so wildly successful. By utilizing their strengths, and capitalizing on trends, as well as periodically evaluating weaknesses and threats, this little coffee joint has become America’s most enjoyable place to get coffee.

Starbucks attracts various generations from teenager to senior citizen. But, their main target is office worker in middle and upper class who want “third home”. Surprisingly, nowadays their main competitor is fast food chain such as Mc Café and Dunkin’ Donuts. One of the strongest strength is cozy ambience of their shop where customer can feel comfortable. However, the reputation of Starbucks’ coffee