starbucks case study

Decent Essays
Case study: Starbucks
Evolution of the company
Starbucks when established in 1971by three founding members; it was known as Starbucks Coffee, Tea and Spices. They were not selling beverages instead they sold coffee beans. By the next year itself they opened a second one in same Seattle, Washington.
In early 1980 the management change took place while one of the founding members left Starbucks and Jerry Baldwin became a CEO. When Howard Schultz joined the company and took charge of marketing and overseeing the retail stores in two years Starbucks reached a milestone by acquiring five stores in San Francisco’s Peet’s Coffee and Tea chain. Although Schultz succeeded in acquiring still his proposal to start selling beverages were not
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When we consider a place where people meet and spend time with friends and family in a relaxing way can choose pubs or bars as a substitute for Starbucks.
Bargaining power of suppliers:
Starbucks is mainly depended on Coffee, which is having very high demand because globally in some geographical areas only it is produced. This makes the suppliers to be in the upper hand with the bargaining power of suppliers to be very high. Along with this the issues related to African Coffee producers, who were treated unfairly by Multinational companies came to an end by the efforts taken by NGO’s also influences the suppliers power to be high.
Threat of new entrant:
The threat of new entrant is low for Starbucks. This is because the beverage industry, especially coffee industry is highly saturated and also needs substantial financial resources to invest in buildings and properties in order to enter the market.
SWOT analysis
Strengths Weaknesses
• Global retail footprint
• Brand identity
• Ensures quality by acquiring quality beans
• Variety
• Locations
• Expanding operating margin • Depends mainly in US market
• Over exposure brings more risk
Opportunities Threats
• Inorganic growth opportunities
• On-the-go lifestyle
• Partnerships
• Expansion of business to other areas all over the world
• Emerging market should be focused • Intense competition
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