Analysis of Starbucks Coffee Company's Current Strategy - Case Study Example

? Starbucks Coffee Company 10th August Starbucks Coffee Company Introduction Starbucks Coffee Company stands out as the largest coffee retailer, roaster, and brand of specialty coffee all over the globe. The company originated in Seattle, USA in 1971 but it has seen expanded its operations to over 60 countries with more than 18,000 stores. The company deals with a wide range of products that include coffee, warm, and cold beverages, premium and sell salads, books, gifts among other accessories. Starbucks overall mission is “to inspire and nurture the human spirit – one person, one cup and one neighborhood at a time (Bruhn-Hansen, 2012, p. 19). Subject to its wide market network, high quality of its products, and the diversity of its products, Starbucks enjoys a magnificent customer base in the coffee other blend- drinks industry. In the report, the paper identifies the stakeholders groups of the company, its key competitors, and an analysis of its current strategy. The paper will also derive some recommendations on the company’s current strategy. Findings Starbucks Stakeholder Groups Starbucks stakeholders groups refer to persons, groups, or organization that has interest or concern in the company. The company’s stakeholders fall into three categories, which include primary stakeholders, secondary stakeholders, and public stakeholders (Bruhn-Hansen, 2012, p. 19). They specifically entail the shareholders who invented in the company’s shares, customers who purchase the company’s products and employees who work for the company across the world. The stakeholders also include the suppliers who provide raw materials to the company and farmers who produce coffee and benefit from the comprehensive programs that the company initiates to help farmers. Recently, families residing within the Silver Spring, Maryland community with children aged five and under became stakeholders. Governments and government agencies in countries where the Starbucks Company operates are also stakeholders in the company (Bruhn-Hansen, 2012, p. 19). Moreover, non-governmental organizations, which partner with Starbucks Company like Conservation International and Ecologic Enterprise Ventures are also stakeholders of the company. Additionally, all the communities that benefit from the company’s corporate social responsibility are stakeholders of Starbucks Company. Ultimately, franchisees that purchase the right to use the company’s trademarks, related brands, and proprietary knowledge for purposes of opening branches across the world also form part of Starbucks stakeholders. Starbucks Key Competitors Starbucks has close competitors in specialty coffee shops, doughnut shops, and quick service restaurants. Indeed, the completion comes from different sectors across the world thus demeaning the company’s market share. Caribou Coffee, which is specialty coffeehouse with 415 stores in the US, is one of the closest competitors of Starbucks Company. Second Cup which is a Canadian franchiser dealing in coffee is also a significant competitor alongside Java Centrale. Another major competitor is the privately owned Dunkin Donuts, which has about 5,000 stores in the U.S dealing with both doughnuts and coffee. Nestle S.A, which is a Swiss multinational food and Beverage Company and the largest food company in the world in terms of revenues offers great competition to Starbucks market share. Additionally we also have Darden Restaurants, Inc., which are a multi-brand restaurant operator and Yum! Brands, Inc., Another worthy competitor is the McDonald, which is actually the world’s largest fast-food chain restaurant (Mourdoukoutas, 2013, p. 1). McDonalds sells its products at a relatively lower price than Starbucks Company thus offering price competition. Indeed, since its upgrade in 2006, McDonalds is becoming an emerging competitor. More so, Panera’s Bread, which offers ambiance of casual dining, is also a competitor of Starbucks Company. Starbucks Company Current Strategy Starbucks adopts various strategies that constitute the overall strategy. Indeed, the company has a corporate social responsibility strategy that guides the operations of the company across the world as it seeks to achieve its mission via corporate social responsibility. Some of the activities in this strategy include the formulation of the Starbucks Foundation, which enhances literacy levels among children by building schools for them (Starbucks 2001, p. 1). This promotes their future by fostering hope among the children and involving their parents in the company. The company aims at being accountable to all stakeholders including the community by making social investments in the countries where it operates. For example, the company collaborates with CARE to build hospitals, schools, and coffee factories for purposes of enhancing the social lives of the immediate societies (Starbucks Corporation, 2013, p. 1). Indeed, this derives immense benefits to such communities. At the same time, the company adopts a strategy that offers credit services to coffee farmers at their countries of origin thus improving their social and economic lives (Starbucks, 2001, p.1). Additionally, the company seeks to incorporate an environmental strategy where it seeks to minimize environmental impact by offering recycling services in all its coffee shops and participating in the Global Month of Service where it volunteers in improving the environment (Starbucks 2001, p.1). In addition, Starbucks recognizes the input of the Green Team to reduce waste and conserve energy. Moreover, the company adopts an environmental mission statement that advocates for improved fuel efficiency in the vehicles that Starbucks owns and operates. Furthermore, Starbucks marketing strategy defined the way western companies market their products. The marketing strategy involves right market segmentation where Starbucks opt to compete on comfort rather than convenience in the upper-scale of the coffee market (Mourdoukoutas, 2013, p. 1). This makes Starbucks the most comfortable and valuable coffee shop in the world. The marketing strategy also involves execution where the company emphasis on its original, high quality coffee, quality customer service, and relaxing environment (Mourdoukoutas, 2013, p. 1). This defines Starbucks Company. The strategy also incorporates superb leadership from the company’s founder who advocates for innovation in the production of the company’s products, which derives uniqueness in the company (Mourdoukoutas, 2013, p. 1). The marketing strategy equally involves expansion to china where extended families live in small house thus the need for Starbucks as a “third place” (Mourdoukoutas, 2013, p. 1). This strategy has led to the market expansion of Starbuck market presence. The company also uses social media marketing where it adopts a social media strategy that incorporates Starbucks’ website and other social platforms that promote the marketing of the company’s products (Alliradiuk, 2013, p. 1). The company also involves adaptation and innovation in its strategy where it uses My Starbucks Idea website to support the company’s business crowding. This has indeed recorded immense success for the company. The uniqueness of its marketing strategy manifests clearly in the restaurants industry. The company focuses on the perfect cup of coffee strategy that advocates for the best quality of coffee. Indeed, even though Starbucks coffee is costly compared to its competitors, the company enjoys huge customer base due to the rich, aroma, and delicious taste of its coffee, which define the perfect cup of coffee strategy. The company emphasizes on customer satisfaction where all the company operations seek to derive comfort, relaxation, and uniqueness, which defines the Starbucks coffee experience. Indeed, the enjoyment of the Starbucks coffee experience derives a competitive advantage for the company. The company also focuses on brand marketing where it emphasizes on “word-of-mouth” and the uniqueness of its products in marketing Starbucks Corporation, 2013, p. 1). Actually, customers pass the Starbucks coffee experience to potential customers through personal interactions. Starbucks seeks smart partnerships to reinforce its business strategy (Starbucks 2001, p. 1). These partnerships account for the massive success that the company enjoys. The company seeks to create a Starbucks community around its brand where it encourages customers to express their expectations, experiences, comments, and recommendations. This ensures that the company responds to the customer’s needs thus maintaining their market share. However, the strategy of creating a third place which offers comfort, relaxation, and a nice experience remains the strongest aspect that makes Starbucks the largest coffee retailer, roaster, and brand of specialty coffee all over the globe amidst stiff completion in the industry. Conclusions I conclude that despite immense competition in the restaurant and specialty coffee industry, Starbucks is still the largest coffee retailer, roaster, and brand of specialty coffee in the world. Notably, the Starbucks experience stands out as the fundamental aspect that attracts and retains customers in the coffee shops. Moreover, the company’s strategy of producing high quality, aromatic, and delicious coffee defines the uniqueness of the company’s products. The Starbucks’ overall strategy defines how the company carries out its operations across all its branches. The company’s strategy incorporates corporate social responsibility, environmental conservation, customer satisfaction, innovation, market expansion, brand marketing, smart partnerships, market segmentation, quality leadership, and quality production. The overall strategy for the company has been effective in achieving its mission, which is “to inspire and nurture the human spirit – one person, one cup and one neighborhood at a time. Nevertheless, the increasing market competition may require frequent review and adjustment of the company’s strategy to ensure that Starbucks Company maintains and improves its market share in this industry. Recommendations Subject to the effectiveness of the company’s overall strategy, I will propose very few recommendations. However, I would recommend that Starbucks Company focus on emerging markets since its wide network would give the company a competitive advantage in new markets. I would also propose that the company focuses on new products since its original products like coffee and doughnuts are facing immense competition from established companies like McDonalds. Indeed, this will help the company to maintain its market share and compensate the losses accrued from the competition. At the same time, the emphasis on the “word-of-mouth” advertising that the company adopts may not be effective in the increasing competitive market. As such, Starbuck should consider venturing in international broadcasting and print media advertisement to present its product to a wider audience. Moreover, the company should consider cultural diversity in its production to accommodate the values and tastes of everybody across the world. Works Cited Alliradiuk 2013, ‘An Excellent Marketing Strategy: Starbucks’, 2013, viewed 10 August 2013, < http://blogs.ubc.ca/aradiuk/2013/02/25/an-excellent-marketing-strategy-starbucks/> Bruhn-Hansen, S 2012, ‘Corporate Social Responsibility’, 2012, viewed 10 August 2013, < http://pure.au.dk/portal-asb-student/files/45282206/BA_Thesis.pdf> Mourdoukoutas, P 2013, ‘Starbucks and McDonald's Winning Strategy’, Forbes, 2013, viewed 10 August 2013, Starbucks 2001, ‘CSR Fiscal 2001 Report’, 2001, viewed 10 August 2013, < http://www.starbucks.com/assets/6ee14301a2364729abe59867fb913520.pdf> Starbucks Corporation 2013, ‘Being a Responsible Company’, 2013, viewed 10 August 2013, < http://www.starbucks.com/responsibility> Read More