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Starbucks Analysis

Essay by   •  November 22, 2010  •  7,199 Words (29 Pages)  •  2,914 Views

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Table of Contents

1.0 Executive Summary 03

2.0 Company Overview 04

2.1 Company Structure 04

2.2 Mission Statement 05

2.3 Financial Analysis 06

3.0 Competitive Analysis 06

3.1 Second Cup 06

3.2 Timothy's 08

3.3 The Symposium Cafe 09

3.4 Tim Hortons 10

4.0 Competition in Canada 10

4.1 Direct Competition 10

4.2 Indirect Competition 11

5.0 Starbuck's Current Positioning 13

5.1 Retail Positioning Matrix 13

6.0 Strengths and Weaknesses 14

6.1 Strengths 14

6.2 Weaknesses 15

7.0 External Factors 16

7.1 Political / Legal 16

7.2 Socio - Cultural 16

7.3 Economic 16

7.4 Demographic 17

8.0 Internal Factors 17

9.0 Future Outlook 18

9.1 Financial Summary 18

9.2 Market Expansion 19

9.3 Product Diversification 19

10.0 Strategic Issues 19

10.1 Consistency and Quality in Products and Services 19

10.2 Protection of Suppliers and Future Supply 20

10.3 Product Diversification 20

10.4 Remaining Innovative 21

10.5 Identifying New and Untapped Markets 21

1.0 Executive Summary

Starbucks Coffee Company was founded in 1971, when it opened its first location in Seattle's Pike Place Market. Starbucks was named after the first mate in Herman Melville's Moby Dick and is the world's leading retailer, roaster and brand of specialty coffee with coffeehouses in North America, Europe, Middle East, Latin America and the Pacific Rim.

In Canada, Starbucks is a major player within the specialty coffee market. The top speciality coffee retailers in Canada are: Second Cup, Timothy's Coffee, Starbucks, Symposium Cafй, and Tim Hortons. Other direct competitors include: Williams Coffee Pub, Cupps, Just Desserts, Country Style, Coffee Time, and Dunkin Donuts. Starbuck's top indirect competition mostly serves smoothies, juices, yogurt drinks, and ice cream related beverages. Their top indirect competition is: Yogen Fruz, Orange Julius, Baskin Robbins, Bubble Tea, and Jugo Juice.

There are several Strengths for the Starbucks Coffee Company. They have a strategic use of their core competencies, they have a diverse coffee line, they have strategic supplier relationships, an excellent customer service strategy, a committement to community, and strategic new venture initiatives. They also have a few weaknesses involved in their business. They have an expensive pricing strategy; they are in an over-saturated market, and changing market trends.

There are a few political/legal issues that are related to Starbucks. These issues include: product definition and labelling, health policies regarding caffeine and coffee, and custom regulations and trade policies. People's values are changing as they would rather pay a premium for quality coffee as opposed to purchasing cheap coffee. The coffee industry can be very unstable as well it is important to study an area before opening a store to make sure that the culture or income of the area can afford speciality coffee.

As important as the external factors are, the internal factors that are involved with the company are also very important. There are a few internal issues involved with Starbucks. They are: global expansion, technology and systems (knowledge-based), employees, and reputation. These issues are extremely important for Starbucks to make sure they handle them properly.

Starbucks is planning on opening a record number of new stores, with the ongoing popularity of its core beverage and food items, and the enhancing of the customer experience through unique offerings in music and consumer products, they are appealing to a broad and diverse global consumer base. Starbucks has set its sights on entering new markets with an aim of achieving a first mover's advantage and building brand loyalty. The Company is committed to offering the highest quality coffee and the Starbucks Experience while conducting its business in ways that produce social, environmental and economic benefits for communities in which it does business. In addition to its retail operations, the Company produces and sells bottled Frappuccino coffee drinks, Starbucks Double Shot coffee drinks, Cream liqueurs and a line of Super Premium ice creams through its joint venture partnerships.

There are five major strategic issues that Starbucks has faced in the last year. These five issues include: consistency and quality in products and services, protection of suppliers and future supply, social responsibility in the public eye, remaining innovative, and identifying new and untapped markets.

2.0 Company Overview

Starbucks Coffee Company was founded in 1971, opening its first location in Seattle's Pike Place Market. Starbucks, named after the first mate in Herman Melville's Moby Dick, is the world's leading retailer, roaster and brand of specialty coffee with coffeehouses in North America, Europe, Middle East, Latin America and the Pacific Rim. Worldwide, approximately 33 million customers visit a Starbucks coffeehouse each week.

Starbucks purchases and roasts high-quality whole bean coffees and sells them along with fresh, rich-brewed, Italian style espresso beverages, a variety of pastries and confections, and coffee-related accessories and equipment. In addition to sales through our company-operated retail stores, Starbucks sells whole bean coffees through a specialty sales group and supermarkets. Additionally, Starbucks produces and sells bottled Frappuccino® coffee drink

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