Pure Competition - Starbucks - Case Study Example

Pure Competition: Starbucks Name Course Instructor’s Name 25 May 2010 Introduction Pure competition is a market that deals with homogeneous products or services, which means that it has many consumers and producers, and thus there is no single producer who is large enough to take advantage of the market on their own. In most instances, such markets are hard to come by but some businesses such as the first and beverages industry can illustrate a nice example. Thus, the aim of this paper is to utilise Starbucks and show that it is within a purely competitive market through incorporating how they approach and do business. The following graph shows a normally demand and supply curve that is common in many business dealing with supply and demand of products laying the foundation of pure competition. Starbucks is an organisation that started in the year 1971 in United States. It is one of the largest coffeehouse worldwide; it consists of 16000 stores found in 49 developing nations, not forgetting its major market that is United States which carries 11,000 stores (McFall, 2004). The main objective as outlined in their company’s statement is to be the best coffee stores that has facilitated in enlarging the company’s market strategies to greater heights. It began its major function as a coffee store that only offered coffee and coffee beans in roasted form in United States. It’s therefore clear that, the main product for this company has been coffee. This product has been of great benefit in this company because it has improved the company’s name, thus has facilitated the opening of new branches in other regions more so the Middle East. The coffee is basically blended by use of distinctive coffee particles that appear to be natural in nature and thereafter is packed in different varieties basing on market patterns, locality and demands. Moreover, some of its major competitors include MacDonald, Java and numerous other coffee and tea providers. Vision statement The company has a vision of being recognized as an excellent coffee producing organization in the entire continent like McDonalds and Coca Cola companies (Mejia, 2008). Starbucks Company has come-up with a new and extraordinary technique that will facilitate in achieving the company’s objective. This new technique will focus on product diversification. The company produced new products that fit their clients’ taste, demands and season. By way of doing all this, the company have developed different subsidiary products like pastries and warm sandwiches whose role is to follow after coffee (Certeau, 1984). Nevertheless, many other organisations have similar vision and market objectives ensuring continuous employment of strategies to ensure that they succeed. Arrival of products The company started stocking its products accompanied by varieties of snacks in one of their hoards when they discovered that most of their customers preferred coffee accompanied by a snack. This pattern brought some benefits in the end results and therefore the company got an opportunity to enlarge its sales volume combined with the extension of the customer base. According to the chief executive officer Howard Schultz, the company has smoothly succeeded in different nations due to the provision of varies varieties which are sold at affordable prices hence most people buy this products. Out of this deal, the continental development of this company, has reached to a shooting market as an aim of the company’s extension strategy. The graph below shows that the demand and supply indicates that organizations within purely competitive environment profit are zero. Shift 1 indicates that demand for the product as increased from D to D’ causing an economic profit. Since the entry into the market is easy, the result is increase in supply resulting in the supply shifting from point S to S’ as indicated by shift 2. Starbucks website Its modern website displays a straight overview of the new menu that is present in the stores. For example, the various drinks, types of food substances and their nutritional content, all this information is outlined and specified in details in the company’s homepage. Different types of drinks like beverages, brewed coffee etc also appear to be advertised at the website. This website helps in doing away with company’s disappointments to its clients, who majestically visits the stores with a desire of purchasing one of the displayed products and lacks the desired product. This method of advertisement helps the company to lift its standards and improve clients’ faithfulness which afterwards raises the clients’ loyalty towards the specific company’s product. On the very same website, the company elaborates its commitment to accomplishing its social roles by explaining different methods of attaining this. For example its critical that the society tasks should be perceived as a pathway to community responsibility achievement. By offering its services to the community, this company personalizes the community tasks campaign by providing and facilitating most services to the youths. The society closer to this company gains from such community tasks, which later enables the company to benefit from good reputation. Advertisement The company aims at concentrating with inn-shop exhibition whereby the function is done face to face together with promotions. Basically the face to face advertisement is performed by qualified personnel who are hired from outside and well trained. By use of standardized customer care representatives, the company gets hold of new clients while maintaining the old ones. Starbuck workers provide customer care procedures at their main stores and any clients attending the stores are served without delay. Most of the clients who walks out satisfied often, distributes this good news to new members who definitely makes a point of visiting the company. Starbuck main group of interest is the youth for this world full of youths is always increasing the market awareness. This assists the company to aim on future investments so as to acquire a competitive path as compared to other companies in a similar industrial trend. Starbuck does not use the media as a way of advertising its’ product for they believe it’s very costly and does not produce the expected results. These believe however, challenges the company to look for other unique options of advertising. (Otto, 1966) International market For this company to be in the international market, it developed combined venture with other companies in the government and local stages. The national aim shall be fulfilled and increase pride to the society and government at large. The growing reputation of this company as coffee producers and diverse leaders, in conjunction with strapping approval will end up in wealth. For instance, its operation in china where it has more than one hundred and ninety stores present in nineteen cities, has still maintained its financial record. Starbucks on the hand has come-up with different mugs which are highly used by the entire region and on top of that, they are being sold to external regions. These mugs were specifically developed to sell out the company’s original name to various buyers, and it was still a method of advertising. In addition the company discovered selling of books as a way of attracting many customers and improving the sales of main product which was coffee. This has been known to be an important element of marketing that helps a company to go on with competition and still maintains its clients (Craig, 2009) .Starbucks company has achieved much in the drinks market by fulfilling the quality of its product and other complementary products. Its advantage arose when it began to offer affordable beverages as opposed to other companies in the continent. This company goes on to be the world’s best selling drinks despite of the higher taxing rates, which are brought about by the company’s aim to provide quality but not quantity. The company’s overview concerning the products prices seem to go higher due to economic recession that affects most businesses (Liz, 2004). In conclusion this company has been able to penetrate in the market place due to its extraordinary marketing strategies. It’s well seen that the company has highly adopted various marketing strategies to accomplish the advertising of its varieties of products. The achievement of Starbucks has been linked to greater improvements and inclusion of modern technology in the market place (Tessa, 2004) Reference Certeau, M. 1984. The Practice of Everyday Life, London: University of California Press Craig, S. 2009. Merrill Bonus Case Widens as Deal Struggles. New York: Wall Street Journal. De Gomez, M. 2008. Management: People, Performance. New York: McGraw-Hill.  Kleppner, O. 1966. Advertising Procedure. New York: Prentice-Hall Kotter, J. & Cohen, D. 2002. The Heart of Change. Boston: Harvard Business School Publishing McFall, L. 2004. Advertising a Cultural Economy. London: Sage Publications Inc. Starbucks. 2010. Home. Available at http://www.starbucks.com/ Tessa A. 2004. Starbucks Coffee Company Washington: Macmillan Press. William, M. 2005. Global Business Management, New York: Sage Press. Youngme, M. and John, Q. 2003. Starbucks: delivering customer service, New York: Harvard Business School. Read More