Starbucks Company Analysis Essay

9602 Words Jul 30th, 2009 39 Pages
SYNOPSIS Starbucks Corporation, originally founded in 1971, but purchased by Howard Schultz in 1987, is the market leader in selling gourmet coffee (Starbucks, 2008). Starbuck's main objective is to establish itself as the most respected and recognized coffee brand in the world (Fact Sheet, 2008). Starbucks has accomplished this objective and experienced much success through their competitive strategy of clustering several stores within the same community and through their distinctive competencies of roasting and selling the quality coffee while providing high quality customer service. The question is, can Starbucks continue their market share growth with rising competitors? Should they focus more on their international operations? …show more content…
In addition to the 54% who drink coffee everyday, 25% of Americans drink coffee occasionally. Also, according to a NCA Coffee Drinking Survey, on average, coffee drinkers spend on average $164.71 per year on coffee. They also reported that 18.1% of the coffee drinkers in the United States drink gourmet coffee beverages daily (Coffee Research Institute, 2006). Recently, however, consumers are less willing to shell out their diminishing discretionary income; this trend can certainly hurt any company’s sales and, ultimately, their bottom line. Sociologically, however, coffee houses, like Starbucks, are seen as a place to congregate with others. Even in a rushed environment, consumers are willing to take time to visit their local coffee shop to pick up their daily jolt of caffeine. Specifically with Starbucks, when one is seen with a cup of coffee, the brand is so well known that it can and has sometimes been viewed as a status symbol. The economic environment is a concern within the coffee industry, as rising dairy and green coffee prices around the world are pushing up the costs of doing business. The rising prices can be attributed to inflation and the decline in value of the US dollar in recent months. The demand in the coffee industry is also slowing; such declines affect the revenue streams for the industry. The political environment in the US for the coffee industry is stable. Currently, there are few

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