History, Development and Growth of Starbucks
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History, Development and Growth of Starbucks
Three friends established Starbucks, a coffee company in 1971 in Seattle, inspired by another coffee shop founder. It strives to source for and roast the Arabica coffee all over the world ethically. Its strives to inspire the nature of the nature of livelihood through the one person one cup initiative. By 2012, the company had up to 17000 coffee shops globally. The company offers a vast range of products to meet its market, and with a third of their stores located in international markets, it boasts of the largest coffeehouse corporation globally.
Internal strengths and weaknesses
The company offers variety of products to meet the different market demands; they have brought in a blend of menu and packaging that meet the needs of their customers. Their business is based on human connections, upholding culture and community involvement, diversifying on everything they do. It strives to create an environment that respect people from diverse backgrounds while ensuring that their employees are at their best. The corporation recognizes its employees and conducts promotion from within motivating employees to be at their best while serving customers. It has a continuous training to the employees to ensure that they meet the standards of the corporation in service delivery.
Analysis of the external environment
The company continuously is affected by the volatile global environment and increased rivalry within the market. The market is increasingly becoming saturated as other companies also seek to diversify what they offer. There are many substitutes in the market, and the coffee industry has become saturated with smaller outlets increasingly coming up. The company remains the largest shareholder in the eatery industry even with the rise in costs of raw products, and the need to manage and respond to the competition.
SWOT analysis
The company strengths are that it has sound financial policies, being the top brand in the coffeehouse segment. It is the largest coffee shop globally with proper employee management, demonstrating experience. The company has a reputation, with welcoming staff and offering best experience to its clients irrespective of their demand. The company has built a strategic relationship with partners, customers, communities, and suppliers. It also strives to offer highest quality products and utilized technology appropriately.
The weaknesses are that the company has a tall management order with occasional worker unavailability with higher turnover. The market saturation and its high level of pricing is also a weakness. The company lacks periodic change of menu with lack of salted products in their menus. The firm’s profit is dictated by the coffee beans price.
The opportunities are that the company have expanded to emerging economies and are have extended suppliers. The increase in retail outlets has also expanded the company product offering. Starbucks can continue expanding and creating partnerships to increase sales and to raise the company financial performance and profit.
Major threats are the increasing shift in consumer preference, the intense rivalry by the competitors and the shifting price of the coffee beans required for the products. There are shifts in local trends and the local cafes offer cost effective high quality products. They are subjected to copyright infringement as their menus are copied over.
Corporate-Level Strategy
The company has a global strategy and the means of expansion with a related diversification strategy that has allowed it entry in to the market making the company able to relate and compete effectively. The company markets its products, offering complimentary goods sold side by side its products conveniently. The company offers its products in preference to the diverse local cultures offering diversified products to meet the different market needs as the company thinks global and acts local. Its maintaining of proper customer service has given it a brand name. Its effective global strategy has boosted its international expansion, and the flexible matrix leadership encouraging its progress and expansion.
Business-level strategy
The company continues to engage differentiation strategy to serve its vast market. The offer of high quality products enables customer acceptance of higher pricing exceptionally. The company while offering services considers the different customer groups, needs and the company competency, to differentiate from other competing firms. The quality of its products grants it an edge over its competitors. It engages market segmentation to identify the different needs of the different customer groups. It has strived to satisfy the market needs by offering variety of products other than the coffee.
Recommendations
The company must strive to get an edge above the competitors through offering quality products at minimal costing. Having a steady supplier is essential for service delivery and the projection of any possible price changes. It is also necessary to tame the workforce turnover and deal with the changing consumer preference by updating their menu.
Actions for Successful Changes
The coffee house must continue its differentiation and diversification, but through it update their menu as per the market segments and ensure it achieves an edge above rivals.
Reference
Gamble, J., Strickland, A., & Thompson, A. (2014). Crafting and executing strategy: The quest for competitive advantage: Concepts and cases (19th ed.). New York, NY: McGraw Hill.