Starbucks--Then and Now

Starbucks—Then: In 2008, Starbucks was the world’s largest coffee retailer. Starbucks was known as the “third place” between home and work with its comfortable atmosphere. The company was environmentally, socially, and economically responsible, as they donated several dollars and community service hours. They had several training programs to be sure they enhanced their employee loyalty. There were convenient loyalty cards, which helped boost the use of technology. As for the cooperative environment, this led way to several opportunities for Starbucks. Coffee drinkers were actually increasing in the mid 1990’s. The company picked up an alliance with SYSCO Corporation, as well as several licensing agreements with: Pepsi-Cola Company, Kraft Foods, Inc., Dreyer’s Grand Ice Cream, Inc., and Jim Beam Brands, Inc. This helped Starbucks distribute its products; not only the in-store coffee experience, but the bottled products, packaged products, ice cream, and its premium liqueur products. This helped with profit, and between 1997 and 2007, revenue continued to increase. But as time went on, a few factors caused Starbucks’ stock price to drop. The political environment is where problems began to occur. Since Starbucks kept expanding its stores, consumers lost recognition towards the company. Previously, if a store was being added in the area, consumers would become excited; however, Starbucks became over-saturated, and its customers lost the excitement of the new stores. Competition also drove the decrease in stock prices, and it was not exactly because Starbucks was striving for the best coffee. Starbucks was already the largest supplier of coffee in the world; however, the company tried to be more like its competitors and vice versa. The success of Starbucks encouraged competitors to focus on coffee products and new restaurants. This is when McDonald’s began emphasizing on the quality of their coffee and when Panera opened café-style coffeehouses. Starbucks also

References: Baratti, L. Starbucks Sparks New Revenue in 2010 & Hikes Its 2011 Fiscal Outlook. 05 November 2010. Retrieved from http://www.businessrevieweurope.eu/tags/starbucks/ starbucks-sparks-new-revenue-2010- hikes-its-2011-fiscal-outlook. Gib, Art. Starbucks Environmental Scan for Social Factors. 2011. Retrieved from http://www. articlesnatch.com/Article/Starbucks-Environmental-Scan-For-Social-Factors/1207634. Harrer, Andrew. Starbucks Corporation. The New York Times. 07 December 2010. Retrieved from http://topics.nytimes.com/top/news/business/companies/starbucks_corporation/ index.html. Lepore, Meredith. Green Mountain Drops On New Starbucks Product Threat. Business Insider. 14 February 2011. Retrieved from http://www.businessinsider.com/green-mountain- drops-on-new-starbucks-product-threat-2011-2. Penney, Howard. Starbucks’ climb isn’t over yet. Fortune. 03 December 2010. Retrieved from http://finance.fortune.cnn.com/2010/12/03/starbucks-climb-isnt-over-yet/?iid=EAL. ScienceDaily. The Starbucks Effect: Committed Customers Don’t Like Logo Redesigns, Research Finds. 12, January 2011. Retrieved from http://www.sciencedaily.com/releases/ 2011/ 01/110111133015.htm.