Starbucks Coffee, Tea, and Spices, was founded in 1971 in Seattle’s Pike Place Market. The name was later changed to Starbucks Coffee Company. Starbucks later entered the public marketplace through their initial public offering on June 26, 1992.
Starbucks has several objectives for success as a company. The objectives are as follows: • “The Company's objective is to establish Starbucks as the most recognized and respected brand in the world.”(www.starbucks.com) • Focus on the core customers
• Operate as environmentally friendly as possible
• Offer superior customer service
• “Apply the highest standard of excellence to the purchasing, roasting, and fresh delivery of our coffee”(www.starbucks.com) • “Recognize that profitability is essential to our future success”(www.starbucks.com)
Evaluation of Objectives
Starbucks strives to obtain brand recognition worldwide through high quality products and services. The strong focus that is put on the customer at Starbucks is apparent from the atmosphere and the staff that the company employs. The staff is well taken care of as far as compensation and benefits. To be environmentally friendly Starbucks gives to numerous philanthropic efforts. In addition to giving they have also established their own charities throughout the years. The company offers industry leading health benefits that begin after initial ninety days that include medical, dental, and vision. Full-time and part-time employees are also eligible for stock option grants through Bean Stock, which is the company’s wide stock option plan. To achieve profitability and keep up with the costs of employee benefits, Starbucks has expanded at an astounding rate domestically and around the world. The company currently operates in all 50 states in the United States as well as the District of Columbia, and worldwide in 43 countries. The future success of Starbucks is heavily dependent on global success in emerging markets where Starbucks has introduced their products.
The objectives that Starbucks has established for their success are being implemented in a way that has made them successful since their inception. There strategies and tactics have created one of the most valuable and well-known brand names in the world. The future of the company is heavily reliant on these objectives and is critical to their overall mission, which is to “establish Starbucks as the premier purveyor of the finest coffee in the world while maintaining our uncompromising principles as we grow” (www.starbucks.com). Evaluation of Strategies
In an effort to maintain its momentum, Starbucks has several key strategies that it will implement in an attempt to continue its growth as a company and grow its profitability. The first of those strategies is to further expand operations. The bulk of those expansions will be in international markets. With stores currently located in 50 states numbering over 11,000 locations domestic expansion is limited. Although Starbucks can continue to open stores in the domestic market it is likely that it has begun to see a reduced level of return on those store locations because they are situated in locations that are not as profitable or are cannibalizing revenues from stores that are currently in operation. In the international market, Starbucks has only “1,796 company-operated stores” and “2,792 joint venture and licensed stores.” These store locations range from Australia and Canada to Saudi Arabia and Russia. With such a small presence over such a large area it is likely that further globalization will result in greater levels of profitability than further saturation of domestic markets.
Another strategy to further the Starbucks brand is the growth of specialty sales and introduction of new products. Such products and sales most recently included a “Semi-Automatic Espresso Machine,” which was developed in unison with BMW and “Starbucks Limited Reserve, a...
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