Economics of Starbucks
B. Analysis economics of Starbucks
1. Nature of product/service
2. Market trends
3. Production/supply process and costs
4. Structure of the industry/market
5. Government role
6. Business environment
7. Firm/Industry Location
8. Business and pricing strategies
9. Entrepreneurial ability of managers
Starbucks, what started in Seattle in 1971s by three friends: erry Baldwin, Zev Siegl, and Gordon Bowker. They opened a small shop and began selling fresh and cold coffee. Starbucks has always been a place where you can find world’s best coffee. In 1970s, Starbucks open its first coffee restaurant and its name comes from a classical American novel (Starbucks, 2013). Through 1980s, Howard Schultz came into Starbucks, after a business trip to Italy and impressed by coffee culture, his perception is that how to make it come true in U.S, he experimented from Seattle. In 1990s, Starbucks has expanded their production line beyond Seattle. Stepping cross the rest sates of U.S as well as international market. At the same time, Starbucks released its special option that offer stock option to employees, which made Starbucks become a public traded company. From 2000s, Starbucks continued its awesome phenomenon, its operation widespread over 15,000 locations over 40 countries. Classical Starbuck’s coffee beverage has been well recognized by lots of customers. Nowadays, Starbucks is not merely a successful coffee retailer; it is a coffee culture and place that people enjoy their lifetime. The nine main areas will give out an explanation how Starbucks looks like. Key word: Nature of product; Market Trends; Production/Supply Process & Cost; Structure of the Industry; Government Role; Business Environment; Firm/Industry Location; Business & Pricing Strategies and Entrepreneurial Ability of Manager.
Analysis of the Economics of Starbucks
Nature of Product
Existing products: obviously, as a coffee related retailer, Starbucks mainly focus on coffee diversify selling. The main kinds of Starbucks coffee are latte, espresso, frappuccino as well as some sweet bakery, ice cream and so on. By the way, according to the idea of Starbucks itself, what they likely do that create a friendly drinks atmosphere rather than only sell a cup of coffee. Actually, customers really enjoyed their coffee time in Starbucks store thanks to cultural environment. What is more, Starbucks also provide coffee beans, coffee pot and coffee cup and other products. In the Chinese market localization of product design, and some tea kind, drink even has a particular season sales of Starbucks moon cakes, etc. Role of technology: Starbucks always try their best to improve well-roasted coffee beans, ground to perfection and then brewed to personal taste. The CEO released a statement that the company spends 20 years perfecting a top top-secret technology that ultimately results in a cup of coffee made with via, that is indistinguishable from Starbuck's typical brewed coffee (CNN money, 2009). In 2008, Starbucks purchased new coffee equipment that is called “clover”. The Clover uses precise technology and a calculated algorithm to brew coffee within one degree Fahrenheit of its ideal temperature and produce the ideal flavor (Chron, 2013). It also gives a control to interaction between water and grounds. What is more advancement, it could connect by Starbucks network in order to more effect management each unit. Product life cycle: generally, product life cycle is divided into four parts, introduce, growth, mature and decline. Every production has to walk through these four parts. According to Starbucks, with different coffee launched based on seasons, it is still located into growth period but close to mature step. Starbucks play its role in coffee industry similar like what monopolist do, its production occupied almost...
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