Starbucks Case Study

SITUATION ANALYSIS:

The emergence of Starbucks, a chic Seattle-based coffeshop chain in the business world was a major event. Organizationally, it is known for its strong vision, mission and guiding principles which gives importance to employees training and welfare. Operationally, they were known for its strong alliance with other institutional food services and have shown tremendous success in terms of revenue, earnings and number of stores in operation.

Because of their strong business performance, many have shown interest to venture on the same line of business such as café-style coffee houses and restaurants. This fast-growing industry has offered wide-range of choices for the customers who are fascinated in drinking coffee. But the later years proved unfriendly for the business. Starbucks has made strategic error which affect its profitability. Even though Starbucks have already established its brand equity and consistently maintained its financial health, the company faced substantial fall in their stock price. With these current challenges faced by the company, there is a need for the Starbucks’ marketing manager to come up with unique business strategies that would differentiate Starbucks from the growing number of competitors in the market while maintaining the quality of their brand and strength of their reputation.

PROBLEM IDENTIFICATION/OBJECTIVE STATEMENT:

1. What unique business strategy should the marketing & strategy manager need to develop, to differentiate Starbucks from the fast-growing number of competitors in the market while maintaining the quality of their brand and strength of their reputation.

1. Starbucks is a profitable company. Its growing revenue and earnings have manifested that the company possessed a healthy financial condition. However, the later years proved unfriendly for the business when Starbuck has made strategic business error which affected its reputation and profitability.

SWOT ANALYSIS

The following SWOT analysis serves as the basis for determining the problem situation and identifying the problems as well as the Key results areas:

STRENGHTS AND OPPORTUNITIES:

Starbucks has greater advantages in the business areas of operational excellence and organizational capacity. First, in terms of operations excellence, Starbucks is very strong at establishing a very strong brand and reputation which is based on Seattle-chic coffeeshop chain. They have quality products and raw materials and an elevated level of comfort provided to its customers (strategic locations & product blends) Moreover, they are also able to establish very good rapport with suppliers and formed alliance with institutional food services. This very good rapport and alliance will be an opportunity for them to apply the same process when the business will expand abroad that will eventually drive added financial growth for the business.