Essay On Starbucks

1470 Words 6 Pages
A Case Analysis
FACTS
The Starbucks Corporation is a nationally recognized company with thousands of stores throughout the United States and even more internationally. However, they did not gain market control by selling high-end coffee to consumers, just to clear a profit. Instead, they developed plans to expand their business immediately. This plan involved a strategic three-year geographical store placement in selected cities and a detailed store design. In order to launch their business initiative into their current position, Starbucks created a dominant product brand. In addition, Starbucks expanded to selling items other than coffee: cold beverages, juices, teas, pastries, coffee brewing systems and coffee hardware. They even branched
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Coffee prices and bean availability vary considerably depending on the weather, economic, and political conditions where they are purchased. Although Starbucks is utilizing fixed-pricing to set future contracts, this does not protect them from every hardship that hits the coffee market. For example, if a country’s crop develops a fungus, it will severely limit the availability of that bean. This will affect Starbucks product line that calls for any of these beans that make those coffees. Starbucks will need to work in a substitution, raise coffee prices or discontinue the products that use the beans they can no longer acquire.
SWOT ANALYSIS
STRENGTHS
Internal:
• They are the leader in the coffee industry with a strong brand image.
• A strong financial standing with capital raised in IPO’s (initial public offering) allows them to avoid debt and finance new stores.
• By creating a “stores of the future” project team, Starbucks builds consistency in every store design even though each store varies in square footage.
• Starbucks has a well-structured training program for employees and managers, with the main objective to provide the employee with the tools necessary to succeed.
External:
• They have created a diverse atmosphere that accommodates a fast paced or relaxing
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The alternative that Starbucks should pursue is to stop expanding so aggressively in the market. This will prevent them from exhausting all of their options. They would become a more unique and exclusive product. Additionally, the slowed expansion will allow for more time for research to be done. The money saved from slowed expansion will result in the opportunity to use funds elsewhere. Starbucks is an extremely successful company, that is doing many things right. However, they have the option of improving their expansion tactic, and increasing their

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