Starbucks: the Future of Coffee.

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During the past three years Starbucks has experienced yearly revenue growth approaching one billion. We have maintained a clear and concise mission, “to establish Starbucks as the most recognized and respected brand in the world” (SEC Annual Report, 2005). In addition, we have developed an aggressive strategy that leverages core competencies with a working business model and growth plan to accomplish our mission. However, in order to continue to maintain our growth indefinitely, we must continually evaluate our strengths, weaknesses, opportunities, and threats (SWOT) to ensure that our business model and strategies are robust and can sustain future growth in a constantly changing competitive environment. Key Stakeholders and Value Chain

There are several stakeholders in the coffee industry and Starbucks value chain. First, Starbucks is a public company and must exist to maximize the wealth of shareholders. In order to accomplish the maximization of wealth for shareholders, Starbucks must endeavor to support other key stakeholders including customers, suppliers, coffee producers, employees, and the environment. Combined, all of these stakeholders hold the fundamental key to Starbucks success.

Key Issues

Starbucks’ largest issue is how to profitably develop retail locations and operations in the global economy. Currently 85 percent of retail sales occur in the United States. In order to reach the goal of global coffee domination, Starbucks must focus on creating a similar brand image in other countries as they have developed in the United States. Branding is the most important issue in controlling Starbucks future and is both the foundation and capstone of all other strategic challenges and opportunities. It is the Starbucks image that allows coffee to be sold at premium prices and creates greater profitability throughout the Starbucks supply chain. Analysis

Quality, customer service, environment, packaging, environmental controls, and social impact controls are all inclusive within Starbucks brand image. Starbucks branding has allowed the “un-commoditizing” of retail coffee and has created higher sustainable profitability and high growth into neighboring cities and ultimately neighboring countries for Starbucks brands. Ultimately, it is the ability to maintain and proliferate the brand image of Starbucks coffee that will determine Starbucks future growth opportunity and the ability to meet Starbucks’ current objective goal of 30,000 retail locations worldwide. Strengths

In order to determine how we can maintain our brand image into the future, we must first look at our strengths from the perspective of both our core competencies and our working environment. A snapshot of our core competencies will help to clarify our brand image. Currently we have the best training programs for employees to extol greater customer service, which increases both the total sales and repeat buying patterns for retail locations. Our coffee is constantly tested for the highest quality and we maintain strict quality controls over both roasting techniques and distribution channels for delivered freshness. We maintain excellent relationships with suppliers to ensure the highest quality beans delivered in a timely manner at pre-negotiated prices. Furthermore, we have organized and expanded our brand image so that most people equate high quality coffee in a pleasing environment as a Starbucks trademark. Finally, we have leveraged the brand image by selling other products in separate distribution channels such as supermarkets while still maintaining the quality brand image. The developed brand image has successfully stifled the ability for competitors to create successful substitute products except on a localized level. Table 1 summarizes Starbucks chief competitive strengths. Table 1: Summary of Current Strengths

StrengthCustomer Service & SatisfactionQuality of CoffeeSupply Chain...
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