Starbucks Strategic
Starbucks – Strategic Management Prowess Efficacy
Today we stand witness to a new coffee era, one made up of Caffé Lattes, Espresso Macchiatos, Cappuccinos and Frappuccinos. Specialty Coffee is here to stay and no one will be more eager to tell you that than Howard Schultz, CEO of Starbucks, the world’s largest specialty coffee bar. In 1993, Starbucks continued its aggressive expansion and moved into the East Coast market by establishing a presence in Washington, D.C. This expansion has continued and today Starbucks operates more then 15,800 stores internationally and employs roughly 140,000 employees. It grosses 11.7 billion in annual revenue and is opening 5 new stores every day. (Starbucks Corporation, 2011)
Starbucks competes with players both within the specialty market and against those outside the specialty coffee market. Some examples of competitors within the specialty coffee market are Tully’s coffee, Seattle’s Best Coffee, Peet’s Coffee, Caribou Coffee and other smaller chains. Those outside the specialty market include, Folgers, Proctor & Gamble, Dunkin Donuts, McDonalds and numerous other coffee serving establishments. Starbucks leverages its customer loyalty, premium quality coffee and the homey atmosphere of its stores to fend off competition.
Specialty Coffee Industry Attractiveness
The most attractive industry for any profit maximizing firm within a capitalistic society would be one in which they can have a pure monopoly. In economics this refers to situations in which one established firm can be the sole provider of a product or service in a particular market segment. This theory of monopoly would be one end of the industry attractiveness scale, while the other endpoint would be defined by the theory of perfect competition.
This scale will help us to define the attractiveness of the specialty coffee industry in relation to these two extremes. The five forces analysis of the specialty coffee industry has allowed us to identify some of
Today we stand witness to a new coffee era, one made up of Caffé Lattes, Espresso Macchiatos, Cappuccinos and Frappuccinos. Specialty Coffee is here to stay and no one will be more eager to tell you that than Howard Schultz, CEO of Starbucks, the world’s largest specialty coffee bar. In 1993, Starbucks continued its aggressive expansion and moved into the East Coast market by establishing a presence in Washington, D.C. This expansion has continued and today Starbucks operates more then 15,800 stores internationally and employs roughly 140,000 employees. It grosses 11.7 billion in annual revenue and is opening 5 new stores every day. (Starbucks Corporation, 2011)
Starbucks competes with players both within the specialty market and against those outside the specialty coffee market. Some examples of competitors within the specialty coffee market are Tully’s coffee, Seattle’s Best Coffee, Peet’s Coffee, Caribou Coffee and other smaller chains. Those outside the specialty market include, Folgers, Proctor & Gamble, Dunkin Donuts, McDonalds and numerous other coffee serving establishments. Starbucks leverages its customer loyalty, premium quality coffee and the homey atmosphere of its stores to fend off competition.
Specialty Coffee Industry Attractiveness
The most attractive industry for any profit maximizing firm within a capitalistic society would be one in which they can have a pure monopoly. In economics this refers to situations in which one established firm can be the sole provider of a product or service in a particular market segment. This theory of monopoly would be one end of the industry attractiveness scale, while the other endpoint would be defined by the theory of perfect competition.
This scale will help us to define the attractiveness of the specialty coffee industry in relation to these two extremes. The five forces analysis of the specialty coffee industry has allowed us to identify some of