Starbucks Company Analysis Paper Example

Starbucks is an American company that was established in early 1971. The business deal primarily with coffee beverages whereby it operates many coffee-house shops globally. Currently, the giant company operates close to 24000 coffeehouses worldwide. The coffee house giant is considered the primary representative of the coffee production which centres on the origin of coffee and its roasting styles (Glowik, 2017).

The company prides on superior coffee quality and excellent customer service. Regarding quality, the company chose to commercialize the darkly baked coffee. For efficiency and safety reasons, the firm uses automatic espresso machines. These are to blend in a rush by the major industry players to offer third wave coffee which they emphasis on quality coffee which is handmade. For the production of this coffee, the company uses a light toaster (Glowik, 2017).

Starbucks coffeehouses serve both cold and hot drinks, loose-leaf teas, cafe latte, expresso, and whole bean coffee. Also offered are fresh juices, Frappuccino beverages, La Boulogne pastries, and snacks.

Vision, mission and core values

Starbucks road to success has heavily depended on its clear sense of organization purpose and a convincing vision for success. In the most successful organization, their existence and continued thriving hinges on their well-thought vision and mission statements. These two elements give the firms the much needed competitive advantage. Starbucks' mission statement is 'to inspire and nurture the human spirit- one person, one cup and one neighbor at a time'. The mission statement reflects the committed focus that Starbucks has towards its customer bases. The first component of the statement touches on the human spirit and the second talk about the value of unity (Glowik, 2017).

Starbucks vision statement is to establish Starbucks as the premier purveyor of the finest coffee in the world while maintaining our uncompromising principles while we grow the statement spells its agenda of becoming the world leader in providing its products principally coffee of the highest quality (Leduc 2017). The vision statement of Starbucks brings out its unbending principles of ethical bearing and a homely culture. The growth part is maintained through the rapid global expansion of the business through new coffee-houses.

The core values of Starbucks are:

"Creating a culture of warmth and belonging, where everyone is welcome."

"Acting with courage, challenging the status quo."

"Being present, connecting with transparency, dignity, and respect."

"Delivering our very best in all we do, holding ourselves accountable for results."

Competitors

The two major challengers of Starbucks are Dunking Donuts and McDonald's. McDonald's has traditionally been commercialized as a fast food restaurant until it introduced flavored and iced coffee in the mid-2000s. Its slogan is "I am loving it." On the other hand, Dunking Donuts introduced its specialty coffees and other beverages in the early 2000s. In 2006, the company declared direct competition with Starbucks by launching an ad targeting American market. Regarding revenue generation, these two companies come after Starbucks. Other than these two global companies, Starbucks faces stiff competition from restaurants that base their business on the model of quick sale of specialty coffee shops (Leduc 2017).

Target market

The primary key market segments for Starbucks coffee include men and women in the age bracket of 25 to 45 (Glowik, 2017). These account for approximately half of its total market share. The company targets this age group segment through contemporary designs that are consistent in advertising and decor and putting effort to keep its products and service up-to-date as status symbols.

Starbucks success factors

Since the formation, Starbucks has established various factors that have made it successful to date. Brand strategy is the pivotal element behind the success of Starbucks. It has multiple products among them snacks, Frappuccino beverages, and fresh juice. The brand invests deals highly with mobile marketing and the use of modern customer engagements platforms. First-mover advantage is the other factor behind its success. The organization targeted to open up 125 stores during the first five years of its formation in which it exceeded up to 150 stores (Kang & Namkung 2017).

The use of mail order catalog played a successful role in selecting the best locations to open up new areas. Through this system, the customers can order wholesales of Starbucks coffee beans across the country. The system enabled the company to create a loyal customer regionally. Employees satisfaction and the ability to attract high-quality workers has made the corporation very successive over the years next to the specialty of the coffee itself. Employees are regarded as the heartbeat and the public face of the company (Kang & Namkung 2017).

Competitive advantages of Starbucks

Product differentiation. The company barely relays on taste and price of the coffee than other enterprises instead it considers the social responsibility and the brand identification. Additionally, the company has excellent supplier bargaining power compared to other competing companies. The suppliers of Starbucks coffee are very united through fair trade certified coffee thus maintains their loyalty to the organization (Kang & Namkung 2017).

The bargaining power of the buyers in Starbucks earns them an advantage over the other companies. It focuses on both individual and massive sales thus able to reduce the impact of losing a single buyer. The brand strategy of the organization has enabled it to overcome competition in the market by offering unique promotion strategies.

Hot issues

One of the problems affecting the company is the shifting retail landscape and the declining mall traffic. In the last quarter of 2017, the firm's equivalent sale growth could be attributed to a rise in ticket size while the clients' traffic remained mostly stagnant. The company has experienced some slow growth since the recession in the US (Kang & Namkung 2017). Secondly, the company has faced challenges in its new mobile platform of ordering coffee where a customer orders remotely, pays and checks in a coffee house to pick their order. It has resulted in being big queues which have seen some clients discouraged to place their orders.

References

Glowik, M. (2017). 4.7 Case study: Starbucks. Global Strategy in the Service Industries: Dynamics, Analysis, Growth, 156.

Kang, J. W., & Namkung, Y. (2017). The Effect of Corporate Social Responsibility on Brand Equity and the Moderating Role of Ethical Consumerism: The Case of Starbucks. Journal of Hospitality & Tourism Research, 1096348017727057.

Leduc, C. (2017). Onward How Starbucks Fought for Its Life without Losing Its Soul Book Review.