Starbucks Coffee Company

Starbucks Coffee Company

Jade M. Sawyer

BUS 402 Strategic Management & Business Policy

Instructor: Bradley Simon

July 20, 2013

Starbucks Coffee Company

Executive Summary

Is the best yet to come for Starbucks Coffee Company?  When reviewing the Starbucks’ mantra “Rewarding everyday moments,” we entail that the company isn’t just about selling coffee.  We sell specialty coffee to our customers and provide them with a welcoming ambience that almost feels like home. It is because of this that Starbucks is known as one of the fastest growing companies not only in the United States, but the world.  Arising almost overnight from a market in Seattle, Washington, the company today provides quality premium coffees with a superior level of customer service and at a premium price, around the globe (Isidro, 2004).

As an executive, it is important to analysis the firm and to create strategies to better achieve our company goals.  In order to analysis Starbucks we have to observe the businesses structure and strategies that are being utilized.  The company can adopt some strategies to help maintain its presence in this type of industry.  I have taken the time to analysis Starbuck by utilizing a SWOT analysis.  Once all the observations were conducted we utilized them to create a three-year strategic management proposal that will discuss the company’s economic assessment, marketing assessment plan including a market analysis, a financial plan, and an organizational structure recommendation.  This three-year strategic management proposal will further the company’s success.

Company History

When most individuals wake up in the morning the first thing they ask for is a cup of coffee.  Some of these individuals do not have the time to brew a fresh pot in the morning, so they go out and purchase their cup.  The leading coffee shop nowadays is Starbuck.  At first it was known as Starbucks Coffee, Tea and Spice.  The original owners were Jerry Baldwin, Zev Siegel and Gordon Bowker.  In 1971, their first store was opened and located in Pike Place Market in Seattle, Washington.   What they did not know was that a man who would one day enjoy their coffee would make this little coffee shop into a big organization. Since the company has been successful, but there are obstacles that they have to overcome to continue to be successful.  

In 1981, a gentleman by the name of Howard Schulz came into Starbucks Coffee, Tea and Spice.  He enjoyed the taste of the coffee that soon he began working for the business.  Schulz became the new marketing executive and he encouraged other business to purchase coffee from Starbucks.   In 1983, he traveled to Italy and was inspired by their coffee bars which served freshly brewed Cappuccino and Espresso.  Upon his return, he convinced the founders of Starbucks to consider an idea he constructed from the knowledge he gained in Italy.  

Schulz became the new marketing executive and he encouraged other business to purchase coffee from Starbucks.   In 1983, he traveled to Italy and was inspired by their coffee bars which served freshly brewed Cappuccino and Espresso.  Upon his return, he convinced the founders of Starbucks to consider an idea he constructed from the knowledge he gained in Italy.  In 1985, He opened II Gionale, the first coffee bar in Seattle.   With the success of the new coffee bar, Schulz began to aim higher.

In 1987, he joined with local investors and became the owner of Starbucks. Once Schultz became the owner of Starbucks he not only opened other stores, but also rebranded all of the II Gionale coffee bars that were opened before hand into Starbucks.  His reason for changing the II Gionale into Starbucks was because he felt that the Starbuck brand was much superior.  Subsequently, he adapted a development strategy whose focal plan was to open several Starbuck locations within the US. In 1992, Starbucks became public and stocks were now freely traded.  There were about 165 locations around this time and now there are more than 16,000 all over the world.  In 2001, Starbucks became internationally known.  The first location overseas was in Zurich, Switzerland.

SWOT Analysis

To figure out what they are doing right and what they are not doing right there are several situation analysis that can be conducted.  One analysis is the SWOT analysis.  According to our text, SWOT analysis has got the objective to analyze internal weaknesses and strengths of an organization, compare them with external possibilities and dangers, and match the 2 so as to select a method depending on the assessment.  When conducting a SWOT analysis for Starbucks one must be aware the company’s strengths, weaknesses, opportunities and threats, because they are required in order to create a SWOT analysis.  To create this analysis it would help to know and understand the company’s mission.  The analyst should also be aware of any goals the company may have and whether or not they have been successful.

Strengths

Like every company Starbucks has its strengths.  The greatest strength this company has is Howard Schultz.    He was dedicated for excellence from the beginning.  He has made this company what it is today with the ideas he brought back from Italy.  Having a coffee bar was an excellent idea and a great success to the company.  Once he acquired Starbucks, he offered all his employees’ medical care plan.  This made the employees pleased and reduced turnover.  The company also offered courses to support top quality and principles.  

Starbucks is the largest coffeehouse chain.  There are about 20,000 coffeehouses within 60 countries.  It is also the number one brand in coffeehouse segment valued at $4 billion.  They are financially secure because of the quality of their coffee drinks and the excellent customer service that is provided by their employees.  Their employees are motivated and valued.  

Starbucks is a well known company due to their established developed brand, logo, copyrights, trademarks, patents and website.  The company has a good relationship with their suppliers and customer loyalty. Customers enjoy going to Starbucks because they not only get exceptional customer service but they can complete any work or study because of the great environment that Starbucks has provided.  In keeping with the trends of convenience technology, Starbucks offers Wi-Fi service for the on-the-go consumer (Griffith, 2003).  

Weaknesses

You might think that with strengths like those listed about that they do not have any weaknesses, but they do. Starbucks has had its share of weak points.  I believe that before trying to do new thing we should do our research first to see if it will be better or hurt the company.  For instance, when we collaborated with PepsiCo to create carbonated coffee drinks was not a good.  

Another example would be where we open stores at because not all have been successful.  Another weakness is our prices.  Even though they have great customer loyalty at times their business may seem to be limited to their customers because of their high priced products.  Their products are high priced because they use quality coffee beans, which are also very costly.  There are many factors that will determine the cost of the coffee beans, such as the weather conditions.  This is something they cannot control, but they do need to make a profit.  

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