This case study analyses the case of Starbucks Company. This is company that operates cafi?? -outlets around the world, being one of the most popular brands in cafi?? industry. It offers a large series of products and services through a variety of channels including not only Starbucks outlets, but also supermarket chains, other companies through alliances and mail posts. However, this company has been familiar due to retail outlets where operates both breweries business and retails business as well.
This particular case study includes several issues of Starbucks background and history, company’s operations and strategy for expansion and growth, and some issues concerning conditions take place for the whole industry. The point of this case study analysis is to identify and evaluate past and current Starbucks Company’s position and strategy, comment about the future, in the context of analyzing internal and external company’s environment and make any useful recommendations.
Main sources for the analysis will be the course textbook (Thompson et al, 2005) that provides the theoretical strategy framework, the contents of case study analysis (Thompson et al, 2005, pp. C-2 – C32), other textbooks and relevant Internet sources. 1. Company Profile Starbucks is a company that operates a large series of coffee shops on a worldwide basis. Its products are Italian-style coffees, espresso, beverages, teas, pastries and confections that have made Starbucks one of the great retailing stores of recent business history and the world’s biggest specialty coffee chain (Thompson et al, 2005).
More particularly, in the context of product mix, In addition to quality coffee, Starbucks features a variety of handcrafted beverages, Tazo(r) teas, freshly baked pastries and in some markets, a selection of high quality sandwiches and salads. Starbucks merchandise includes exclusive espresso machines and coffee brewers, unique confections and other coffee and tea related items (http://www. starbucks. com/aboutus/overview. asp). Figure 1. 1: Starbucks front website, www. starbucks. com
According to company’s website, Starbucks purchases and roasts high-quality whole bean coffees and sells them along with fresh, rich-brewed, Italian style espresso beverages, a variety of pastries and confections, and coffee-related accessories and equipment -primarily through its company-operated retail stores (http://www. starbucks. com/aboutus/overview. asp). Concerning alternative channels, except from its stores, and branded products it is also mentioned that in addition to sales through our company-operated retail stores, Starbucks sells whole bean coffees through a specialty sales group and supermarkets.
Additionally, Starbucks produces and sells bottled Frappuccino(r) coffee drink and a line of premium ice creams through its joint venture partnerships and offers a line of innovative premium teas produced by its wholly owned subsidiary, Tazo Tea Company. Concerning company’s history, Starbucks got its start in 1971 by three academics, Jerry Baldwin, Zev Siegel and Gordon Bowker – all coffee aficionados. They believed that they could build a clientele in Seattle that would appreciate the best coffees and teas. Starbucks open its first location in Seattle’s Pike Place Market.
This store was an immediate success with sales exceeding expectations partly because of interest stirred by a favorable article in the Seattle times. By the early 1980s, the company had four Starbucks stores in the Seattle area and had been profitable every year since opening its doors (Thompson et al. 2005). Starbucks, named after the first mate in Herman Melville’s Moby Dick, is the world’s leading retailer, roaster and brand of specialty coffee with coffeehouses in North America, Europe, Middle East, Latin America and the Pacific Rim.
Worldwide, approximately 33 million customers visit a Starbucks coffeehouse each week (http://www. starbucks. com/aboutus/overview. asp). When Howard Schultz first joined the company in the early 1980s, Starbucks was already a local, highly respected roaster and retailer of whole bean and ground coffees. A business trip to Italy opened Schultz’s eyes to the rich tradition of the espresso beverage. Espresso drinks became an essential element of Schultz’s vision. He purchased Starbucks with the support of local investors in 1987.
In addition to well-situated coffeehouses, Starbucks sells coffee and tea products through its specialty operations (http://www. starbucks. com/aboutus/overview. asp; Thompson et al, 2005). Coffee aficionados can also find Starbucks in a variety of carefully chosen venues including United Airlines, Horizon Air, Seattle’s KeyArena and Safeco Field, Chicago’s Wrigley Field, University of Washington athletic venues, Experience Music Project interactive museum, Hyatt Hotels, Barnes ; Noble bookstores throughout North America, and Chapters, Inc. bookstores in Canada.
Since 1991, Starbucks(r) coffee has been available at licensed airport locations and travel plazas operated by HMS Host in the U. S. Licensed locations can also be found on college campuses through a licensing agreement with ARAMARK Corp. , SYSCO and Sodexho. Starbucks has licensed locations in select supermarkets across the U. S. Now, Starbucks stores may be found in urban and suburban areas worldwide, as well as many rural communities throughout North America. Additionally, an expanded number of drive-thru and off-highway locations provide a convenient alternative for our customers .