What Are The Social Factors Affect Starbucks

Starbucks Corporation is a coffeehouse chain that began in Seattle in 1971. Since that time, Starbucks operations have grown; there are now over 22,000 retail stores throughout 67 countries. Starbucks strives to offer customers a comfortable, “home-like” environment while remaining conscious of ethical behaviors and social responsibility. It can be argued that Starbucks dominates the coffeehouse market, and much of this may be due to a grand strategy with a focus on growth. Using a growth strategy, Starbucks attempts to increase its market share and revenues by increasing the number of its stores and the number of locations it serves. So far, Starbucks has enjoyed much success with this strategy.

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

On its website, Starbucks professes to fulfill its environmental mission statement as well by understanding environmental issues and sharing information with its partners; developing innovative and flexible solutions to bring about change; striving to buy, sell and use environmentally friendly products; recognizing that financial responsibility is essential

Starbucks operates and competes primarily in the retail coffee and snacks store industry. This industry experienced a major slump during the economic crisis beginning in 2009, where tastes changed significantly and people were not spending money on specialty items, such as higher priced coffee and snacks like before. Luxuries of eating out were replaced with lower priced items to fit into a shrinking budget of most Americans. Prior to this, the industry had a decade of growth consistent. The retail value of all U.S. coffee sales in 2001 was $18.5 billion, a one-third increase from 1995. In 2002, the coffee market in the U.S. was comprised of 79 percent of adults over the age of 18, including both daily and occasional drinkers. Daily coffee

Threats to Starbucks include the entry of new competing gourmet coffee providers, the increasing overhead costs, and the ongoing sluggish economy. The success of Starbucks has garnered many admirers and competitors. Because the barrier to entry is relatively low, many coffee companies are copying and competing with Starbucks, such as Coffee Bean and Tea Leaf, Seattle’s Best Coffee, and even McDonald’s Cafe. In addition, the increasing overhead costs and the sluggish economy further negatively impact Starbucks’

Barriers to entry for coffee retailers are low, hence increasing the threat of new entrants. Equipment, facilities, furniture, etc. can be leased by new coffee retailers, thus, reducing initial capital expenditure and upfront investment. Since the industry is high fragmented at the bottom levels, new players can create and compete in niche areas within the market. However, small players may not be able to compete with the major players in the industry who have successfully achieved economies of scale and high degree of operational efficiency. Furthermore, consumers may have a strong association and preference for a brand such as Starbucks and may be reluctant to switch to another new brand of coffee.

"Starbucks mission: to inspire and nurture the human spirit – one person, one cup and one neighborhood at a time. Starbucks is committed to a role of environmental leadership in all facets of our business." (Starbucks 2014)

Many Starbucks business practices concern activists and international advocacy groups. Even the consumers have expressed issues. So, the company should take these into account to continue holding consumers’

Starbucks was originally founded in 1971 by Zev Siegal, Gordon Bowker, Jerry Baldwin (friends from san Francisco university). They first opened their doors the 30th of March 1971 no 1912, pike place, Seattle.

The "green" and "moral chic" purchasers are likewise concerning. They worry about social and ecological expenses of the brands. Starbucks must know about this pattern.

“Our mission is to inspire and nurture the human spirit –one person, one cup and one neighbourhood at a time.” (Starbucks Coffee Company, 2015)

Starbucks is undoubtedly dominating the coffee industry, however that does not exclude the entry of new rivals. For example, McDonald’s, Burger

Founded in 1971 at Pike’s Place Market in Seattle, Washington, Starbucks coffee went from a high-quality, do-it-yourself whole bean retailer to an international 6.4 billion dollar empire. As of 2005, there were 10,500 stores worldwide where customers could enjoy a cup of the internationally recognized coffee at a convenient location. Starbucks achieved this through a series of strategic movements all while offering a great in-store experience and quality coffee.

In terms of competition and the forces, which could limit the success of Starbucks it is important they stay ahead or even with other companies concerning innovative products. Many more micro companies are coming up with new products with a similar quality and a lower price/cost. It is important that Starbucks continues to search for innovative products to continually satisfy their customers. At the same time “rivalry” amongst Starbucks and smaller providers of coffee will continue to increase as the demand for coffee continues. The buyers bargaining power is significant as they can determine the cost, type of product, quantity and ultimately