- Executive Summary
Starbucks is the largest international coffee House Company that deals
with the purchase of coffee beans; process them and sale to its
customers. The company has become the choice of many coffee lovers
across the world because of its quality coffee it sales. Since its
establishment in 1971, Starbucks is the leading in retailing, roasting
and branding of exceptional coffee in the world. The company now
operates in more than 62 countries, and it has 20891 coffee stores
across the world. We offer brewed coffee, snacks, mugs, coffee beans
and expresso-based hot drinks to our customers across the world.
Starbucks Coffee Company entirely relies on its customers for it to
have enough incentives that will enable it realize its set goals. We
also ensure that our employees all over the world are satisfied with
the company’s terms and conditions and also we make sure as the company
that they work in a favorable environment free from any infection or
negative distractions. This marketing plan is a way to shape up our
performance and do some analysis on various sectors to foster excellent
services to our customers. It will also help a big deal to improve and
allow the company running and keep in touch with our customers.
analysis of the strength weaknesses opportunities and threats of the
company helped us a great deal in coming up with this strategic
analysis, sales promotional strategies and the marketing plan. The
company is focusing on plans to expand its premises to meet the
customer’s demands, building royalty with our customers and increased
investment on research and technology for the company to come up with
new products and services targeting specific customers.
Coffee Company has also many challenges it has faced for quit sometime
in different countries. Many countries have different economic
challenge that confronts it such as political and socio-economic
factors. Inflation is very common in many countries as a result of
global economic problems that are brought about by persistent increase
in commodity prices and political instabilities in advanced economies.
Competition has been another challenge that needs a proactive approach
as discussed in this plan.
Company also has plans to come up with new and better marketing
promotional tools to enable us do exemplary business in the coffee
market. Our programs have also focused on investing in research and
development in some countries currently not operating.
Starbucks currently it has two mission statements, the first
is that when the company started and later they come up with another
one. Initially the mission statement states that: “To establish
Starbucks as a purveyor of the finest coffee in the world while
maintaining our un-accomplishing principles as we grow” Later Starbuck
aIDed to the mission statement which states: to inspire and nature the
human spirit- One person, One cup, and One neighborhood at a time.
Starbuck Core Competences
The core competence of Starbucks is to
effectively use their main product and ensure differentiation
strategies are put in place for high-quality snacks and beverages.
Starbucks also believes in giving the finest quality coffee to its
customers and have the Starbucks experience through high quality
services from its competent and highly experienced staff employees,
clean and highly maintained storerooms that enhances culture friendly
environment where each and every person can enjoy. Starbucks also has a
strong human resource management that cultivates internal and external
good relationship with their suppliers. The employees of Starbucks have
a good and professional horizontal integration aimed at working
together with the focus of achieving the same objective of branding the
number one coffee product in the world.
Starbucks usually purchases coffee beans from the
customer to come and process them as per the market demand or according
to the quality the company is planning to focus on. Although it is
known that the Company deals only with the coffee it also uses other
ingredients to spice up and aID quality to their coffee.
processing the products, the company designs the brand that can beat
the customer’s sight. The products after production are kept in their
stores waiting distribution to the final consumers or the miIDle-level
- Competitor Analysis
Starbuck has faced stiff
competition both from domestic and international markets. Local market
is the American market where the company started from the back in 1971
in the Washington DC. Competition is from those companies that produce
substitutes of the products that Starbucks produces. The major
competitors of Starbuck are the Dunkin’ donuts, McDonald’s and Caribou
coffee. These companies don’t make public advertisements about their
products in the market but instead they look for customers privately
through their network of sales persons.
Those who work closer to our
stores always face stiff competition from us because we believe that
the quality can make us move from one step to the other. Starbucks
doesn’t conduct its advertisings more than just like any other company.
The company has a great number of its customers who are loyal to it,
and they help a great deal in attracting other customers because we
assure them that a quality is what we believe in
usually take their brand names to advertise in a specialty area at the
aim of attracting the prestigious class of the customers who are
sometimes our customers. They have another very important weakness of
weak management structure that has partners who are inexperienced in
the selling and advertising industry. We compete with them as experts
and guarantee sales employees with their experience they can bring more
customers to the company as the quality is guaranteed.
different channels through which it sells its products to reach the
final consumers. Now a customer with the Starbuck app can make online
order and the products he or she has ordered with will be delivered to
their households through our well-networked delivering services. Most
of the customers more especially the old or busy officials use these
services to reasons such as time, flexibility and convenience.
to start outsourcing some of the marketing activities such as where we
want to open a new store room. These places usually are unfamiliar to
us and therefore require those who are familiar and bring them to our
company. This strategy has worked in several countries that we are
working in, and now it is used in our new market in India.
Starbucks wishes to maintain its quality of
coffee and further maintain its supply from the actual farmers. The
company wants to attain highest levels of expertise and relation with
the growers themselves. To keep its actual farmers the company wishes
to ensure that it doesn’t pass through the miIDle markets who hike the
prices resulting to high production costs.
Starbucks utilizes multiple
channels to distribute its products across the markets. It means,
therefore that it has several ways of distribution: first is to
distribute them directly to their customers in the company storerooms.
They import the coffee beans and sell them to through their brand
names; Starbucks also sells the coffee to the supermarkets and shopping
centers because they process more than they require. This distribution
enables them to expand too many markets in order to promote their
The country also considers their customers who are not within
the area of their operation and come up with exporting their products
that will be found in shopping malls and shopping centers. It is meant
to ensure the customer relationship and loyalty is articulately
- Environmental Analysis
With the new technology
innovation and invention are common in many industries that have a
better future sells. The ever changing internet has brought many
prospects in different industries not necessarily the Information and
Communication Technology. It possesses a lot of challenges to our
markets because our competitors have hired research experts whose
mission is to ensure the taste buds of their customers have something
sweeter than that of yesterday.
Distributors and marketers are busy
looking for ways of selling and distribute their goods and services
through the internet. We have already ventured into such a business,
but challenge remains as new products are brought to the internet
market in a more precise and promising way than expected. Therefore,
this asserts us to make more investments in the online marketing so as
to reach many customers who are away from us.
Starbucks has intensified
its storerooms in the United States and some countries all over the
world. In some countries, you find it difficult to operate a business
due to their strict macroeconomic issues. Some governments in some
economies regulate businesses within their boundaries and in most cases
they usually overtax the foreign company owing to their policies. It
became difficult, therefore for Starbucks to favorably compete with
such companies because already the company incurs a lot of expenses in
the market, unlike domestic companies. Some countries have adopted
protectionism policies to ensure that their companies continue
operating as normal despite economic challenges that flush some
economies or the world economy.
- Technological Factors
businesses have been digitalized. As a result, customers and seller
usually make sales and [purchases online. The other competing companies
such as McDonald have adopted a system through which customers do
orders and pay online after which they pick goods from a designated
place, or the products are delivered to the customer to his doorstep
whenever the demand for and pay to such services.
technological pressure from other companies competing with star bucks,
the company has decided to come up with Starbuck launched the mobile
service portal to enable its customer to do shopping using their mobile
phones. The company allied with the Square company to offer that
communication services to help issues with the Starbuck cards and
easier customer purchase or booking whenever they are away.
Economically, Starbucks is always depended on the
economic strengths and weakness of the investment countries. It also
depends on the global economy since the company is international. Like
in the 2008 recession the company recorded a poorest economic
development it has never recorded in the previous five years. The
company in some cases triggered by politically such as the United
States bombing that happened in 2001. There was a contraction in the US
economy because the government allocated a lot of resources to fund the
fight against terror in the Asian countries. It was also noted that the
some American citizens with the Asian origin even feared to do business
or walk around since there were intense racial attacks. Starbuck also
recorded serious losses as a result of a decline in sales.
Social, cultural Factors
Starbucks currently is not faced with any
cultural believes with the consumption of their products. A customer
buys the type of goods that suits his or her needs and buys or ignore.
Some cultures restrict people to drink and eat traditional meals for
preservation of their customs, but they haven’t caused any trouble yet,
we haven’t incurred that situation yet.
- Political factors
Starbucks is an international company that established many coffee
stores all over. Therefore, the company is bound to face different
political setups that sometimes make the company flexible to adjust to
such political environments. Sometimes, like in Asian countries a
political conflict may occur thus paralyzing the businesses of the
company. That situation is mostly found in our store situated in
- Financial Analysis
This financial analysis
is going to focus on six-year period ratio and growth from 2008 to
- The company has recorded revenue growth decline to -5.9% during
the 2008/09 recession but from then Starbucks recorded a growth of from
the financial year 2010 to financial year 2013. In 2012 the company
posted an increase in the sales to 13.7% and in financial year 2013
Starbucks also posted revenue of $24.9 billion. It is a translation of
a substantial increase in sales from 4.9% to 15% in financial year
20098 and financial year 2012. In financial year 2013, Starbucks
recorded a decline in profits as a result of litigation charge of $2.8
billion translating to -2.2% for that year main reason is termination
of Kraft Foods agreements. Looking at Starbucks operational efficiency,
it has recorded a remarkable asset inventory turnover ratio of 1.51 to
5.4 respectively for the financial year 2013. Interestingly the
company’s cash conversion cycle have an increase of 54.7 in the
financial year 2013. The company boasts a good financial health of debt
to equity ratio of 0.29% settles on the current quick financial
The impressive financial performance of Starbucks is due to
increase in growth and sales in emerging markets such as South Africa,
Mexico, China and Brazil. The Company has some inroads towards the
Chinese market to explore some aIDitional untapped opportunities in
that economy. Starbucks is currently tailoring its formats to identify
the available markets and know its preferences and tastes to enable the
company identifies the right product mix that will suit their needs.
plans towards realizing a better financial outcomes, the company is in
plans to transfer its competent and capabilities all over the world as
profit drivers for global expansion way.
Starbucks has a great
opportunity growth in tea and fresh juice product mix; these products
are building up with coffee to increase the taste of their products
away from other countries. It is in a bid to capture and reach the
customer‘s shift to like snacks and beverages as a change in
Coffee beans form the most important input to the Starbucks
Company. Over the years the prices if coffee beans have been escalating
thus creating price volatility risk. This creates a risk of investing
in implanting the effective hedging strategy.
Starbucks has been
concentrated in the United States markets and now it is looking for
opportunities to invest in rural areas where opportunities seem to
present it. They are a lot of opportunities in rural areas, and this
had been discovered when Starbucks started using its mobile app to do
business where many customers requested for delivery of the company
products to the interior parts of the rural areas.
options are being explored to ensure that the company continues to
record more financial returns favorable for its future expansionary
plans. Starbucks is also in plans of exploring the Asian and Africans
markets to explore seemly fertile opportunities. Current according to
statistics, there is a growing demand in snacks and that has been
characterized majorly in tourists and those who are traveling.
Starbucks cannot hesitate in investing in such places where
opportunities seem to present themselves.
- Opportunities and
The company has made tremendous successes moving closer
to set objectives. According to many market analyses that have been
conducted our products are better placed in the market than any other
companies that are competing with us. Therefore, we have laid down
programmes for enhancement of our production and embrace a continued
value aIDition for our products to gain more customers in the market.
So far, we haven’t encountered any serious weaknesses apart from the
last financial year’s historical sharp decline in sales which
translated to decrease in sales
The company explored many opportunities
both locally and globally to ensure that we cut on the cost of
production that has become today’s threat towards making real returns.
In a few days to come the company has organized to start accruing raw
materials from our neighborhood sources. This decision was made in
order to cut on transportation costs remember the cost to transport raw
materials has gone up due to increasing in fuel prices. Internationally
the company is likely to hire sales experts to explore the market for
our product in the internal market the country is partnered with in
The most critical issue that the Starbuck
Company is facing is the repeat of business. Our businesses don’t
change or shift to start another business. Therefore, we must have to
make sure that our customers get their regular satisfaction and more
importantly come up with new products to better the tastes with the
focus of increasing the sales.
Our competitors usually exhibit an
unfair competition by merging to form mergers so that they can have
influential in our sector. Sometimes they give false information
concerning our businesses citing that we merged, but many of them are
aware of such business tricks in the market. We have foreign customers
who sometimes visit the countries where we have store rooms and find it
difficult to reach us because of the misleading information that is in
the market regarding the mergers. Many believe that we joined a long
time ago with other companies but in actual sense we have not merged
with any company.
- Starbucks SWOT Analysis
gives highest importance on the quality of goods and services they
produce to give maximum satisfaction to its customers. No matter the
production cost we meet the quality must be assured to maintain
customer loyalty to the company. Their product portfolio caters for all
age groups and needs of varied demographic factors.
Starbucks has a
well-established and competent human resource department that ensure
its employees give the quality and excellence services to its
customers. Employees of the company are the best asset of the company.
Offers training and workshops to equip their employees with the
necessary skill required in the industry. Educate workers in this ever
changing market mechanism enhances a boost and greater customer
Starbucks promotes goodwill and social
responsibilities to its neighbors where they operate any business. In
areas where their stores are situated they focus on recycling and
reducing the wastes. This is not only done for the neighbors of the
Starbucks community but also to adhere to the call of UNEP to keep the
To maintain the customer loyalty Starbucks has a
reward program and Starbuck card to keep the customers coming to
increase their chances of regular visits by its customers. The
customers can access their services in mobile outlet; this is to ensure
that all customers are reached and do business with the company.
Starbucks has a problem with overdependence on the United
States market. The origin of the Starbucks is in America, most of the
company’s outlets are in America hence the company relies a lot on the
economy of the US. If the United States economy records a decline
economically it translates to a decline in the overall sales of
Starbucks has a culture of making American/European coffee
flavor meaning it meets a lot of market problems when it comes to doing
business in other countries. It takes a lot of time for the customer to
adapt with the new product in the market that translates to small
Due to the nature of Starbucks to maintain quality products,
Starbucks choose to buy very expensive goods to meet such status.
Therefore, they become expensive in selling their products and
sometimes the customers find their way to other retailers who are
selling same products at cheap prices.
Starbucks has a great
corporation image which renders it to thorough scrutiny those forces to
engage itself in social responsibilities that enhance tight control
over labor practices.
Starbucks has an international
experience of entering into a new market with its extensive strategies.
It has made many markets in many parts of the world where India joined
the list recently.it has a large financial base which enables it to
expand and explore the market and make investments.
The product mix the
company is offering to its customers focuses to satisfy the demands of
certain demographic factors. Product mix expansion enhances increased
in sales as different customers will meet the products they need in
Technologically Starbucks has a mobile program that
encourages the customer make payments through from their mobile phones.
The reward program is simplified; the company partnered with Square
communications and introduced the Starbucks app for that matter.
Starbuck does brand extension, and it has branded its image beyond its
horizons lines, and it has also ventured into product diversification
while keeping the brand dilution risk at check.
There are a
lot of competitions from other companies that are producing the same
products such as that of Starbucks. These companies price their
products lowly as a trick for customer to trade with them. Some of its
senior most competitors include the Dunkin Brands, McDonalds, Costa
Coffee, and Donut Products, pop, mom and Pete’s Coffee.
coffee market also is another threat because its prices keep on
fluctuating thus posing a threat of predicting the future coffee
market. It also brings about the problems of pricing the products
produced at the present and in the future.
With the changing in the
lifestyle of the people, Starbucks also must invest more on research
and technology to meet market demands. Competition in the market
usually focuses on coming up with new brands with enhanced sales.
During the world economic crisis Starbucks faces many challenges
because the advanced and less developed countries were forcing it to be
tied on the budget due to economic hardships.
- Product Choices
Starbuck produces a wide variety of goods produced from coffee beans
and other raw materials such as tea and strawberry. They produce a
variety of products ranging from breakfast snacks, teas and children
drinks, coffee drinks and lunch items. The brands under each category
are many and therefore the list is very long.
Starbucks since its beginning in 1971 adopted competitive
market mechanisms to enhance it can lead the market for the goods it’s
doing business. The company strives to induce quality in all sectors
starting from production, marketing and sales. The marketing sector has
been doing exemplarily better in the coffee market. It is the number
one coffee finest company in the world. Their investments and market
expansion it has created manifests the dominant market strategies it
has put across for enhancement of its lead in the market.
have ensured that customer satisfaction is their number one strategy.It
is through giving customer the quality product they need and give them
the best services they require. The managements also focus on the
employees who are working there, and they tackle them to training and
workshops to aID more skills and expertise to improve on customer
services. They also ensure remunerations of that worker’s sell and
accordingly. It will improve the quality of their services thus
increase the overall sale of the company.
Starbucks as also used a lot
of resources in marketing its brands across the world using different
media currently the company has so many websites on the internet that
are used to advertise the company products across the globe. It also
advertises using local publicity channels such as radios, TVs, and
billboards to make the customers aware of the products they offer.
Advertisement by a significant margin promotes sales and expands the
market for goods and services.
Starbucks has invested a lot in research
and extension services, these results to innovation and invention of
products in the market. Change creates an expansion in the sales of
their products. The customer tastes and preferences taken care of to
maintain them all the time. Design of new products also ensures that
new products have entered the market, and the customers can access them
and if found viable, sales can be made. Starbucks is also aiming at
creating an the interconnection between and among its customers and if
possible for customers to look for others and introduce them to the
- Market Implementation, Evaluation, Ethics, social
responsibility and Control
Starbucks has an excellent leadership team
that will be able to implement the above recommendations as outlined by
company managing board. The company should cater for diversified
cultural ties that their people are accustomed to. Starbucks employees
are critical to our organization because they provide the company with
real sales hence enhanced profits. The company also regards the
customers as our family because they are purpose and reason as to why
we are doing business. Customer satisfaction should be our core
objective to our company. Every member of the Starbucks company our
customer tops the priority list.
Starbucks should maintain its ethical
and social responsibility in order to foster and exhibit high-level
expertise in the industry is doing business. They should at all times
concentrate at their core values of ethics and continue with their
exemplary lead in the market of snacks and beverages.