Strategic management analysis - Essay Example

The Paper will also suggest several recommendations that will be deemed as helpful in improving the Coffee house’s operations within the United States market. A Brief History of Starbucks. Starbucks is an American global corporation that specializes in selling coffee in its various coffee houses situated all over the world. Its main base of operations is currently at Seattle, Washington. The first Starbucks coffee shop opened its doors in the Seattle Springs area of Washington in 1971 and the company has grown to become the largest coffee house company in the world.

It boasts of having about 19,972 stores which are spread out in 60 countries across the globe. Most of the company’s branches are currently located in the United States with an approximately 12,937 branches. . Starbucks has also expanded its current investments into the entertainment industry and through its Starbucks Entertainment division as well as its hear Music brand, it also markets films, books and music. Most of the company’s product offerings are found to be not only seasonal but also specifically tailored particularly to satisfy the requirements of customers in the locality that the branch is located.

Some of its branded products such as coffee and ice cream are sold in grocery stores all over the United States (Starbucks 2012). The United States Coffee House Market The Coffee Shop business and the entire coffee industry have had a significant boom over the recent years. This is especially so in the case of the specialty coffees offered by the industry. The market for these coffees has registered significant growth that has been spurred by the growing trend of the consumers becoming increasingly educated about the industry’s espresso-based drinks as well as how they are made (Starbucks 2012).

According to research data conducted by First Research, the United States is host to about 20,000 coffee shop businesses whose total combined revenue has been estimated to stand at $10 billion as of 2011. More than 50% of these sales have been seen to be generated by the country’s top 50 coffee shop operators. Most of the county’s coffee shop operators have increasingly been spreading their business into the international market with Starbucks reporting to having set up shop in over 5,500 licensed locations outside the United States in 2010 (Green and Keegan 2012).

The average gross margin for a single coffee shop in the country is