Starbucks Analysis

Topics: Coffee, Starbucks, Coffeehouse Pages: 37 (10828 words) Published: August 10, 2007

This report was written by three Arnhem Business School students for the purpose of providing a full analysis of the Starbucks Coffee Corporation. Although Starbucks is operating internationally, this report is mostly based on the United States, as this is Starbucks domestic market and until today its main operating market. First, the internal analysis gives an overview about Starbucks as a company. Second, the external analysis is used for analyzing the market Starbucks is operating in. Third, the strategic options possible for Starbucks are analyzed. Last, an explanation will be given on how Starbucks should implement the best strategic option available.

1 Executive Summary4
2 The Company and its strategy5
2.1 History:6
2.2 Mission Statement7
2.3 Global Strategy8
2.3.1 Customer service excellence8
2.3.2 Product quality8
2.3.3 Accessibility8
2.3.4 Innovative Business Strategy9
2.3.5 Brand recognition9
3 The Marketing Strategy10
3.1 Product10
3.2. Price11
3.3 Place11
3.4 Promotion12
Helping the environment and community is proven to be a powerful marketing tool for Starbucks. Firstly, Starbucks helps the community and the environment, and at the same time creates the image of being a socially responsible company that contributes to better living standards. Customers are aware of the fact that when they buy something from the company, they also do something good for the community.12 In addition to that Starbucks uses a non-typical approach to promote its products. Starbucks' products are neither advertised in TV nor radio commercials. Instead, Starbucks intents to build up a reputation and a strong brand image by using community programs and relying on word-to-mouth promotion.12 4 Corporate Culture and Management Style13

4.1 Executives13
4.2 Board of directors13
4.3 Employees13
5 Financial Analysis14
5.1 The first steps15
5.2 The 1987-1992 period (private company)15
5.3 The expansion (public company)16
6 Conclusions Internal Analysis:18
6.1 Strengths18
6.2 Weaknesses19
7. Market Analysis20
7.1 Demography20
7.2 Economy22
7.3 Technology:23
7.4 Social and cultural:24
7.5 Environmental:25
7.6 Political:25
8 Target groups26
8.1 Young adults26
8.2 Business people26
8.3 Seniors27
9 Competitor Analysis28
9.1 Strategic group map28
9.2 Caribou Coffee Company, Inc.29
9.3 Diedrich Coffee, Inc.29
9.4 Panera Bread Company (PNRA)29
9.5 Other competitors US market30
9.6 Competition in Europe and Asia30
10 Porter's 5 forces31
10.1 Threat of new entrants31
10.2 Bargaining Power of Customers32
10.3 Bargaining Power of Suppliers32
10.4 Threat of Substitute Products or Services33
10.5 The Intensity of rivalry among competitors33
11 Conclusion External Analysis34
11.1 Opportunities34
11.2 Threats35
•Volatile coffee markets35
•Market/lifestyle fluctuations35
•Fierce Competition35
12.1 TOWS analysis:37
12.2 Strategic options37
13 Bibliography39
Appendix 341
Further explanation Strategic Options:41
Opportunities combined with Weaknesses:41
Threats combined with Strengths:41
Threats combined with Opportunities:42

1 Executive Summary

Starbucks has become a well-known company for selling the highest quality coffee beans and best tasting coffee products. It was one of the first companies to realize that the real money to be made was in beverage retailing, not just coffee beans. Starbucks created a coffee for the coffee connoisseurs and got to great lengths to acquire only the highest quality of coffee beans. Store Managers of Starbucks coffees are extensively trained for one year. Starbucks has the distinction of being the public's educator on Espresso. They have also recently started to expand to packaged and prepared tea in response to the growing demand for this product. There are no other national coffee bar competitors in the...

Bibliography: Internet resources and articles:
Man or machine: who 's the better roastmaster?; Castle, Timothy J; June 20, 2002;
Organic consumers association;; consulted 20 Sept. 2006
Mintel International Group;; consulted 20 Sept
Coffee statistics Report E-Book;, consulted on 27 Sept. 2006
Coffee Statistics Report;; consulted on 27 Sept
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