Starbucks Time for a Change

Starbucks

Time for a Change

In America today, the failure rate of businesses are extremely high making it nearly impossible for a small business to prosper. Americans would rather hold their money than spend it with out it being for what they may consider a necessity. This not only affects the small businesses. Large companies and franchises also have to find new ways to have people come and spend their money on what the company is offering to them. The focal point today will be Starbucks; an upscale coffee house that specializes in specialty coffees. The foundation of Starbucks is an incredibly strong one that has been one of a kind coffee house that has broken into the vast coffee market. The competition for Starbucks has been very low since its opening in the late 1980s, with nearly no business selling specialty coffees. However, other businesses are beginning to sell such coffees causing much concern for Starbucks. Businesses like McDonalds are now selling premium coffees at a much lower price which threatens the long term well being of the coffee mogul Starbucks. There are steps that can be taken to protect Starbucks from losing market share to its competition. Creating a new promotional strategy would be the most beneficial to combating its competitions lower prices. The effectiveness level of a new promotional strategy will be very high; nevertheless, however much they are willing to spend on such promotions can be easily outspent by McDonald’s large bank account. This should not be a deterrent yet a reason to begin its new promotions sooner. With the unemployment rate up to 5.1% in America money is not being spent on luxuries such as specialty coffees. (Aversa 2008, Para 1) With jobs depleting people are more hesitant on spending their money. New ways need to be developed to bring new people into luxury places such as Starbucks. With the limited stability of the economy people need to be reminded that it is acceptable