1. How did Starbucks create its uniqueness in the first place?
Worldwide, an estimated 2.25 billion cups of coffee were being consumed daily according to statistics in 2013 (Avery, 2013). When customers drink Starbucks coffee, they associate it with being valuable to the environment. Starbuck’s uniqueness was created by being a high-quality product offered at a reasonable price. While coffee quality is one factor that draws loyal customers, many consumers are attracted to Starbucks for other reasons. Being known for its cozy ambiance is one other reason why Starbucks has become more than just a brand, but also a culture. The whole Starbucks experience is “comfortable” (Hennessey, 2012). Visionary, Howard Schultz was successful in
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Instead, to keep up with demand, Starbucks had the baristas to grind all the day’s coffee beans in the morning and store them for the rest of the day (Jargon, 2009).
4. How is Starbucks attempting to re-create its uniqueness? Do you think it will be successful? Why or why not? In 2009, one way that Starbucks attempted to re-create its uniqueness was when it introduced its new instant coffee brand Via. An immunologist named Don Valencia was the visionary responsible for creating the extract that made it possible for Starbucks to develop its bottled Frappuccino and coffee ice cream Via is a line of instant coffee that consumers can enjoy when they are not able to visit a Starbucks (Berfield, 2009). The goal was to bring back the customer experience that built the Starbucks brand. I believe that Starbucks has been and will continue to be successful in recreating its uniqueness due to brand loyal customers.
Hand crafting each drink seems to be of more importance then the customer’s out-the-door time. Most Starbucks have been modernized to include more ambient lighting, colors that are more inviting, couches, softer music, and more and tables to attract people to stay a while why using the free Wi-Fi for school or work. To add into recreating its uniqueness, there are also outside seating areas that invite friends to sit and enjoy each other’s company in a cozy atmosphere.
5. Explain Starbuck’s ups and downs using (a) strategic activity systems
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 has developed a brand image that has revolutionized coffee drinking experience. It has created an ambiance that is designed to attract customers and keep them coming back to Starbucks stores. It offers wide varieties of services such as comfortable seating areas with unique music and free wireless Internet for their customers while sipping their favorite coffee. This distinctiveness sets Starbucks apart from most of its competitors and has allowed the company to successfully grow and profit while charging premium prices for their products.
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
There were many contributing factors to Starbucks’ success in becoming the leading coffee brand worldwide. Starbucks value proposition was to provide a ‘live coffee’ culture. The primary value included providing high quality coffee to consumers all around the world. They controlled the greater part of the Supply chain from the growth of coffee beans to the dissemination in retail stores. This was done to ensure superior quality as compared to other brands in the market. The second value was to provide the befitting atmosphere keeping interior design as a critical factor. With most of their coffee stores located in high-visibility places, it proved to be convenient and provided the inviting environment to ordinary customers who wanted to escape
Starbucks is an organization that is known for being one of the largest coffee chain stores in the United States. They focus on serving delicious coffee to the customers at affordable prices while giving them an amazing experience at their store. Recently the CEO of Starbucks has announced that he will be implementing a new strategic planning initiative to his company to ensure that the customers and employees are getting the full experience of Starbucks Coffee. In his annual report he mentioned these strategies, “A proprietary and revolutionary in-store Clover® brewing system that delivers the best cup of brewed coffee available anywhere; A complete reinvention of brewed coffee in-store, that will be brought to life by baristas across the U.S., who will scoop and grind a new unique coffee blend, connecting customers to the early days of Starbucks; The introduction of a new state-of-the-art espresso system that provides the perfect
Starbucks Corporation has been around since 1971. What makes Starbucks unique from other coffee-bar shops is not only their wide selection of products, but the environment they provide to all customers. Starbucks sustains competitive advantage by constantly looking for new ideas, new products, as well as new experiences for guests. Starbucks also offers a selection of music, and unique designed coffee mugs. The company even hires designers to come up with artwork for commuter mugs. Starbucks’ forte is incorporating differentiated features such as their different flavored coffees that no other company offers. They
The original idea for the Starbucks format came from the 1980´s when the company´s director if marketing, Howard Schultz, came back from a trip to Italy enchanted with the Italian coffeehouse experience, the idea was to sell the company´s own premium roasted coffee and freshly brewed espresso-style coffee beverages, along with a variety of pastries, coffee accessories, teas, and other products in a tastefully designed coffeehouse setting. The focus was to sell a “third place experience”.
Starbucks utilizes a differentiation business model by offering an overall unique and high quality experience for the consumer. From the high-quality food and drink options, to the uniquely roasted coffee and supreme customer service, Starbucks aims to provide an experience unobtainable anywhere else. Starbucks also focuses heavily on rapid expansion by seeking out profitable geographical areas and overcrowding those areas with stores in order to exploit profits and slow down competitors. Starbucks’ compliments this with its horizontal acquisition strategy, extending their product line through acquisition of competitors. This provides Starbucks with a differentiation strategy focused on providing a diversified product mix
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?
The larger known coffee businesses were beginning to show signs of stagnation in the 1970’s and 1980’s. Unlike Proctor & Gamble other large manufacturers, specialty coffee producers were small independent distributors. According to the Harvard Business School report on Howard Schultz; During the early 1980’s the average American consumed less than two cups of coffee per day, with almost one of every two men , women and children over the age of 10 does not drink coffee at all. The large coffee business started to compete for market share in a shrinking market. The smaller independent specialty coffee producers were selling only high quality Arabica beans. Arabica beans have less caffeine, less
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 first opened its doors in Seattle’s Pike Place Market with the name being coined from that of Moby Dick’s first mate (Schultz & Yang 1999). It has spread its shops across North America, all over Europe, the Middle East, Latin America as well as the Pacific Rim with an estimated 35 million customer weekly (Michelli, 2008). With tremendous growth from a small time coffee shop, the company has matured to an international icon that today it is one of the world’s leading retailer, roaster and brand specialty coffee (Story, 1971). The company offers whole bean coffees, espresso beverages, and confectionery and bakery items.
Starbuck’s missions, values, and principles are directly related to their generic strategy of broad differentiation. Each one of these elements explains how Starbucks is just not offering just coffee, but an experience. In the stores, they complement this by bringing several items to the table (product variety). In addition, Starbucks has positioned themselves in the focus differentiation and treacherously close to best supply category. Starbucks has used the Verismo to position themselves back into the focus section because it is a specialty item that Starbucks aficionados might want in their home. However, Starbucks is going against the grain with the Via products because of its low costs. This is risky because people buy Starbuck for the experience and the high quality coffee, not because it is cheap.
So far, Starbucks are devoting itself to letting the customers feel something different and something new.
This case assignment discusses the history of Starbuck’s accomplishments as they entered the American coffee culture heritage. In 1983, The chairman and CEO Howard Schultz traveled to Italy and had a dream to carry the Italy coffeehouse ritual back to the United States. Schultz was focused on creating an environment meeting company that makes good coffee but also be a social experiment. Starbucks today opened more than 19,000 stores functioning in 62 countries. Starbucks has numerous rewards that globalization has offered and they have significantly benefited from it, while in the coffee industry. Starbucks has a wide-range in marketing strategies to benefit the customers. During the different obstacles that Starbucks has encountered, they must stay reliable in quality and uphold to adjust to different customer values.