Starbucks Case Analysis

Starbucks Case Analysis

Starbucks is a premier coffee provider that has expanded into the retail market and provided specialty coffee products in restaurants, drug stores, and grocery stores world wide. At the end of 2006 the company reported having a total of 12440 stores. Starbucks purchases and roasts high-quality whole bean coffees and sells them along with espresso beverages, a variety of pastries, and coffee-related accessories. In addition to sales through company-operated retail stores, Starbucks sells whole bean coffees through grocery stores they also offer a line of premium teas produced by its wholly owned subsidiary, Tazo Tea Company. The Company's objective is to establish Starbucks as the most recognized and respected brand in the world.

Starbucks was founded by Gordon Bowker, Jerry Baldwin, and Ziv Siegl in Seattle Washington back in 1971. After trying some of the coffee Howard Schultz wanted to take this business and expand it which is exactly what he joined the company to do in 1982, but the owners weren’t interested at that time to take its coffee nationwide. A couple of years later the owners put the company up for sale and Shultz bought it for 3.8 million dollars.

Starbucks selects a different entry strategy for different countries according to the culture of the countries. Starbucks does emphasis its high quality products and an environment to relax in its specialty coffee shops. The marketing mix for the U.S. is shown in the table below.

Target Market Students, Working Adults, Middle and Upper Class

Position Function as “the third place” between work and home, where employees are like neighbors.

Transform coffee from a commodity into a memorable and meaningful experience.

Product Customization of standardized product, changed image of coffee from standard to premier experience. Full service beverage product line including specialty coffees, cappuccinos, frappuchinos, and most recently teas and coffee accessories. Starbucks experience: relaxing, communal atmosphere

Price Mid-high priced. Specialty Coffee Drink: $3.35. Whole bean coffee: $9.95 1 lb bag.

Place Places a high number of retail stores in densely populated areas. Select high-traffic locations and high visibility areas to ensure brand name recognition.

Distribution Retail specialty drink and whole bean stores, grocery outlet, licensing

Promotion Leverage national presence and location strategy to reach high brand awareness.

In-store promotion, Starbucks cards, seasonal promotions, local art promotion, advertising print, outdoor.

External Analysis

Grocery stores and supermarkets, carrying a vast number