Starbucks open its first coffee store in Seattle, Washington and at the end of 1990 Starbucks expand its headquarters in Seattle and also build a new roasting plant. In 1990s Starbucks opens 60 retails shops in United Kingdom. At the end of 2000s Starbucks total branches was 3500. Coffee is one of the rapidly growing industry in this world. According to national coffee association, USA 49% of American age 18 and more drink coffee beverage every day. Coffee industry was in peak of its success at the end of 1990s. Starbucks purchases and roasts high-quality whole bean coffees and sold them along with fresh brewed coffees, Italian style espresso beverages, gold blended beverages, a various complementary food items, coffee related accessories and equipment.
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TARGETED MARKET AT THE TIME OF LAUNCHING
At the time of Starbucks launching the target market was upper income class. But during 1990s Starbucks realise that the growth of Starbucks depends on the middle or lower class incomes because these two classes are more motivated and go to the discounted products. Starbucks also focus on consumer habits and share its speciality of coffee with the buyers. In the end of 20th century there are many changes in market that helped Starbucks getting successful. The most important change of the last twenty, thirty years is the changes of economic policies over the world. Starbucks target market was 18 years to 24 years young professional because they are not yet been loyal with coffee industry. Starbucks strategy comprises to locate its stores at picky places such as the first floor of blocks of offices, underground main entrance and urban areas. An addition to sales through its company-operated retail stores and licensed retail operations, Starbucks sells coffee and tea products through other channels like distribution targeting restaurants, hotels, colleges and universities and other work places. Starbucks stated goal is to become the leading retailer and brand of coffee in each of its target markets and it aims to achieve this goal through continued aggressive expansion of Company operated retail locations.
STARBUCKS STRATEGY
Starbucks adopt different type of strategy to build its branding in the market. Starbucks has numbers of capabilities likes market leadership and its outlets as customers means its locations which means it is the place where customers can relax from work or home and its supply chain management.
To try to keep the coffee taste in the stores clean, Starbucks banned smoking and asked employees to refresh from draining perfumes. Prepared foods were kept covered so consumer would smell coffee only instead of other food. Starbucks is culture oriented company who introduce new techniques like commuter mugs and T shirts in different regions of USA that was in keeping with each city’s culture(like peach shape coffee mugs for Atlanta State, Paul Revere picture for Boston State and the Statue of Liberty for New York city).
To make sure that Starbucks’ stores reach the maximum standards, the company used “mystery shoppers” who posed as customers and rated each location on а number оf criteria. Starbucks’ internal operations can be divided into two parts: Retail and Specialty. The Retail division is governed directly by Starbucks Corporation. The Specialty division includes foodservice, licensing agreements to overseas outlets and revenue from foreign joint ventures.
STARBUCKS AIMS AND OBJECTIVES
Starbucks main objective was to launch itself as the most renowned and respected brand in the world. The company main objective was to the expansion of its branches all over the world, to broad its retail business, develop new techniques, product and introduce new distribution channels in order to achieve its goals.
The company another aims was establish its brand as a leading brand in coffee market by selling high quality products, providing better services and build relationship between customers and the Starbucks.
SWOT ANALYSIS
STRENGTHS OF STARBUCKS
- Starbucks is good at taking advantage of opportunities.
- Starbucks is internationally recognized and has a global presence
- Starbucks has strong ethical values.
WEAKNESSES
- Reliable on beverage innovation
- Starbucks 50% business is in USA from last three decades. Starbucks need to spread its business all over the world to spread its business risk.
- Starbucks is dependent on a main competitive advantage, the retail of coffee. It could make them slow to diversify into other sectors should the need arise.
OPPORTUNITIES
- Company has the opportunity to expand its business around the globe
- In 2004 the company created a CD burning service in their Santa Monica (California USA) cafe with Hewlett Packard, where customers create their own music CD.
THREATS
- Starbucks are increasing the cost of coffee and dairy products
- Consumer taste might be change in future. Consumer can replace coffee with other cold beverage or leisure activity.
CONCLUSION
Starbucks is a leading company around the globe. Starbucks used a very simple strategy, “connecting links between treating employees with dignity and respect and producing а good product and services.” That was the major factors that differentiate Starbucks from others and bring the successful to Starbucks.
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