Starbucks Analysis
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Table of Contents
1.0 Executive Summary
2.0 Company Overview
2.1 Company Structure
2.2 Mission Statement
2.3 Financial Analysis
3.0 Competitive Analysis
3.1 Second Cup
3.2 Timothys
3.3 The Symposium Cafe
3.4 Tim Hortons
4.0 Competition in Canada
4.1 Direct Competition
4.2 Indirect Competition
5.0 Starbucks Current Positioning
5.1 Retail Positioning Matrix
6.0 Strengths and Weaknesses
6.1 Strengths
6.2 Weaknesses
7.0 External Factors
7.1 Political / Legal
7.2 Socio – Cultural
7.3 Economic
7.4 Demographic
8.0 Internal Factors
9.0 Future Outlook
9.1 Financial Summary
9.2 Market Expansion
9.3 Product Diversification
10.0 Strategic Issues
10.1 Consistency and Quality in Products and Services
10.2 Protection of Suppliers and Future Supply
10.3 Product Diversification
10.4 Remaining Innovative
10.5 Identifying New and Untapped Markets
1.0 Executive Summary
Starbucks Coffee Company was founded in 1971, when it opened its first location in Seattles Pike Place Market. Starbucks was named after the first mate in Herman Melvilles Moby Dick and is the worlds leading retailer, roaster and brand of specialty coffee with coffeehouses in North America, Europe, Middle East, Latin America and the Pacific Rim.
In Canada, Starbucks is a major player within the specialty coffee market. The top speciality coffee retailers in Canada are: Second Cup, Timothys Coffee, Starbucks, Symposium Cafй, and Tim Hortons. Other direct competitors include: Williams Coffee Pub, Cupps, Just Desserts, Country Style, Coffee Time, and Dunkin Donuts. Starbucks top indirect competition mostly serves smoothies, juices, yogurt drinks, and ice cream related beverages. Their top indirect competition is: Yogen Fruz, Orange Julius, Baskin Robbins, Bubble Tea, and Jugo Juice.
There are several Strengths for the Starbucks Coffee Company. They have a strategic use of their core competencies, they have a diverse coffee line, they have strategic supplier relationships, an excellent customer service strategy, a committement to community, and strategic new venture initiatives. They also have a few weaknesses involved in their business. They have an expensive pricing strategy; they are in an over-saturated market, and changing market trends.
There are a few political/legal issues that are related to Starbucks. These issues include: product definition and labelling, health policies regarding caffeine and coffee, and custom regulations and trade policies. Peoples values are changing as they would rather pay a premium for quality coffee as opposed to purchasing cheap coffee. The coffee industry can be very unstable as well it is important to study an area before opening a store to make sure that the culture or income of the area can afford speciality coffee.
As important as the external factors are, the internal factors that are involved with the company are also very important. There are a few internal issues involved with Starbucks. They are: global expansion, technology and systems (knowledge-based), employees, and reputation. These issues are extremely important for Starbucks to make sure they handle them properly.
Starbucks is planning on opening a record number of new stores, with the ongoing popularity of its core beverage and food items, and the enhancing of the customer experience through unique offerings in music and consumer products, they are appealing to a broad and diverse global consumer base. Starbucks has set its sights on entering new markets with an aim of achieving a first movers advantage and building brand loyalty. The Company is committed to offering the highest quality coffee and the Starbucks Experience while conducting its business in ways that produce social, environmental and economic benefits for communities in which it does business. In addition to its retail operations, the Company produces and sells bottled Frappuccino coffee drinks, Starbucks Double Shot coffee drinks, Cream liqueurs and a line of Super Premium ice creams through its joint venture partnerships.
There are five major strategic issues that Starbucks has faced in the last year. These five issues include: consistency and quality in products and services, protection of suppliers and future supply, social responsibility in the public eye, remaining innovative, and identifying new and untapped markets.
2.0 Company Overview
Starbucks Coffee Company was founded in 1971, opening its first location in Seattles Pike Place Market. Starbucks, named after the first mate in Herman Melvilles Moby Dick, is the worlds leading retailer, roaster and brand of specialty coffee with coffeehouses in North America, Europe, Middle East, Latin America and the Pacific Rim. Worldwide, approximately 33 million customers visit a Starbucks coffeehouse each week.
Starbucks purchases and roasts high-quality whole bean coffees and sells them along with fresh, rich-brewed, Italian style espresso beverages, a variety of pastries and confections, and coffee-related accessories and equipment. In addition to sales through our company-operated retail stores, Starbucks sells whole bean coffees through a specialty sales group and supermarkets. Additionally, Starbucks produces and sells bottled Frappuccino® coffee drink