Will the Starbucks maintain its market leadership over Mc Cafe - Essay Example

Download file to see previous pages... Now the primary question which is raised here is; “Who is the leader and will be in future as well?” Another well established and well reputed brand is Mc Cafe which is the creation of repute firm McDonalds. Following is an extensive analysis to deduce which of the two firms will remain the undisputed giant in the years to come. History of Starbucks In the time when world around us is extremely fast paced and competition in the market has squeezed every firm in the industry and where only survival of the fittest is possible, a giant market leader in the coffeehouse industry pops up in head, Starbucks Corporation. Starbucks was founded by three partners Jerry Baldwin, Zev Siegl and Gordon Bowker in 1971 in Seattle, Washington. Starbucks is by far the largest coffeehouse company in the world and it is still expanding at a rapid pace (Spanogle et. al. 2007). Starbucks went international in1990 for the first time when they inaugurated a store in mid 1990s the time during which the firm was opening a new store every single day and this speed of expansion that carried on into 2000s and now approximately around one third outlets of Starbucks corporation are overseas. Starbucks had expanded up to one sixty five outlets in 1992 at the time of its initial public offering (Abrams, 2003). Over view of Starbucks: Starbucks sells a wide range of coffee and other beverage products in order to provide a delightful experience to its customers. Its products mainly include drip brewed coffee, espresso -based hot drinks and coffee beans. Starbucks has restricted itself to coffee products but it also produces salads, hot and cold sandwiches, Panini, pastries and snacks which provide the consumers with what the company calls a “distinctive Starbucks experience”. The success and growth of Starbucks Corporation can be attributed to a person who saw the potential and opportunity in the product when no one else did: Howard Schultz. This aspiring entrepreneur was appointed as the marketing head in 1982 and upon his return to United States from Italy, he realized the opportunity that could materialize into the repute that Starbucks today has. The following words are attributed to him: “Lets create a community gathering places like the great coffee house of the Italy in United States”. Although his idea was not highly appreciated by the top management at Starbucks, nonetheless they did allow him to experiment this new idea at one of their retail stores (ABA, 1997). Moreover, the new idea proved to be a huge success and that’s when Schultz started another company with the name of ll giornale. In 1987, Schultz convinced a group of local investors to buy Starbucks when its original owners decided to sell their coffee business along with the name. Schultz incorporated Gionrale outlets with Starbucks and finally started with the conversion of six shops into graceful and ...Download file to see next pagesRead More