Managment Case
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Their mission statement:
“Our mission is to inspire and nurture the human spirit – one person, one cup, and one neighborhood at a time.”
Introduction:
Starbucks was discovered by three friend, Jerry Baldwin, Zev Siegl, and Gordon Bowker in 1971 (references). This retailer started as a small coffee shop producing fresh roasted, gourmet coffee beans and so on. During these years Starbucks was ranked first in Washington DC but in 1980 the shop lost its positioning in the market and one of the three friends sold out (references). In 1982 a man named Howard Schultz helped revive Starbucks shop by becoming support salesman. Furthermore, in 1987 Schultz bought the company and amalgamated with Giornale. At that period of time, Schultz opened 17 stores in total. In 1990 Starbucks experienced its turning point toward becoming a massive company. In 1992 it became a publicity traded company. After some years, Starbucks started to spread throughout the globe (references). Over a decade this coffee shop attended its miracle years due to its brand image that spread through urban and suburban areas. Moreover, Starbucks succeeded in attracting people from all different cultures, age, and region. In all everyone was desperate in living the “Starbucks experience” although its price was and is always relatively high (references).
Porters 5 Forces
Industry Rivalry:
Coffee industries do not depend on the price tag, but rather than it strongly depends on the differentiation on taste, quality, customers service, and brand recognition. Therefore, one may say that specialized coffee shop such as Starbucks is not sensitive to its price tags.
Starbucks faced a minor competition against small coffee shops when it was first opened by Schultz in 1987. Nowadays, one views several coffee companies competing against Starbucks such as Second cup, Gloria Jeans, Coffee People and so on. These coffee shops maybe found within one country or many countries around the globe. Among all direct competitors it was found that Starbucks primary competitor is Gloria Jeans which was established in 1990s (references).
Starbucks offers its customers whole grain coffee beans, ready to drink coffees in packs, take away coffee drinks and so on. In this specific chain its largest rivalry are Procter and Gamble, and Nestle and Kraft (references). Apart from these old product companies, Starbucks is also facing competition with businesses that produce soft drinks, energy drinks, and other non alcoholic beverages.
Threats of new entrants:
Starbucks is a retailer that existed for more than 30 years, due to its existence one may conclude that this company is an expert in producing coffee (references).
Looking at different coffee shops and large firms one may conclude that Starbucks position is being shaken by its competitors and in current days others firms may easily access its market (references).
The three main large firms that are challenging Starbucks dominance in the industry are McDonalds, Dunkin Donuts, and Burger King. These companies entrance to coffee retailing segment ended by shaking Starbucks position because of their capacity to producing new resources, but yet this cannot crash Starbucks as a whole. As said on previous paragraph, despite all these competition surrounding Starbucks, it will always stay unique and preferred to all customers because of its special coffee taste, image, brand recognition, and its high level of customer service (references).
Another aspect that helps Starbucks compete against these firms is exclusive access to quality coffee beans from different supplier all around the globe. These suppliers follow the fair Trade criteria which costs a fortune for Starbucks Company (references). This action is taking place to assure to its customers that the coffee they serve and sell is the finest