Starbucks & Usps

Case Analysis

Starbucks & USPS

Starbucks Case Analysis

About Starbucks

Starbucks started operations in 1971 in Seattle's historic Pike Place Market and was owned by Jerry Baldwin, Zev Siegel, and Gordon Bowker. During the first decade of its existence, the company sold fresh roasted gourmet coffee beans and accessories for brewing and roasting. In 1982, the founders were joined by an entrepreneur named Howard Shultz who functioned as the firm's Director of Retail Operations and Marketing ("Facts about Starbucks Coffee Company"). While on a trip to Italy, Howard Shultz came across Italian "coffee culture", where patrons in the café would sit around the tables and enjoy themselves while drinking coffee. The café's appeared to function as a meeting place for Italians, where they would socialize and spend time in leisure.

Starbucks SWOT Analysis (Strengths, Weaknesses, Opportunities and Threats)

Strengths

1. Starbucks is the market leader, in the Gourmet Coffee Industry. All over the world the Starbucks brand is known even if there isn't one in that particular country.

2. Starbucks is a global coffee brand built upon a reputation for fine products and services

3. It has over 16,500 stores in over 50 countries.

4. Starbucks is focus on quality and pride itself in providing an experience with every cup of coffee that is sold in its stores.

5. The organization has strong ethical values, commitment to the environment, and in general the communities in which it operates.

Weaknesses

1. In comparison to its competitors Starbucks coffee is highly priced

2. Majority of Starbucks outlets are concentrated in its home market (USA). Even though they do have an international presence, they need to expand more in the international markets to increase profitability and reduce business risk.

Opportunities

1. Even though coffee is their major product, they need to utilize their reputation for creativity and product development to diversify into the kids market. Since their place is an environment where family can gather it would be very beneficial to include a kids menu.

2. Starbucks has the opportunity to expand its global operations in places like the Middle East, eg. Abu Dhabi which now has become home and a destination of choice for the rich and famous. Also there is the opportunity to expand their Caribbean operation, seeing how well they are doing in Aruba.

3. There is also the opportunity to become a franchisor which will expand their operations international but reduce overhead cost seeing that they had to close so many of their unprofitable stores because of high operational costs.

4. Since Starbucks charges a premium for its coffee since its outlets are portrayed as a place of relaxation, socialization and ambience. They should pay more attention on their customer service so that they can capitalize on their differentiation.

Threats

1. There is the constant threat from their competitors, mainly McDonalds and Dunkin Donuts. McDonalds constantly have cheaper coffee and also uses the media to compete directly with Starbucks. Dunkin also offers close substitutes to the Starbucks brand for lowers price and has also began offering free wireless internet to its customers.

2. Starbucks is exposed to rises in the cost of coffee and dairy products, seeing that these are their main ingredients it is one of their greatest threats, since this will mean higher price for their already expensive products.

3. As a result of Starbucks success there is the constant threat of new entrants to the market.

Starbucks Competitors Discussion

Starbucks currently faces major competition from Dunkin Donuts, Caribou Coffee, Peet's Coffee and Tea, McDonalds, and Krispy Kreme Doughnuts.

Competitors such as McDonald's and Dunkin Donuts, main strategy is to lure Starbucks customers away by offering them a cheaper cup of coffee. Dunkin competes directly with Starbucks through the addition of branded coffee both in their outlets and in grocery stores. McDonald's is the number one fast food company by sales and has the financial backing to offer extremely cheap coffee to its customers. Not only do they have extensive menus, but they also have the financial resources and position to leverage their strengths to threaten Starbucks profitability.

Caribou provides gourmet coffee, espresso-base beverages, specialty teas, baked goods, whole bean coffee and branded merchandize. They also sell their products to grocery stores, airline, hotels, college campuses and mass merchandisers. Even though caribou is small it is the closest competitor to Starbucks in terms of product offering and concept.

Peet's coffee and tea is a specialty coffee roaster and marketer of roasted whole bean coffee. Peet's sells its products in grocery stores and to other retail outlets. Krispy Kreme's main products are sweet threats. Krispy Kreme operates a chain of over 300 doughnut shops and also sells to grocery stores and supermarkets. They also sell coffee and other beverages.

Starbucks Marketing Strategy

Starbucks' marketing strategy is one of a differentiator. Starbucks has made itself standout as a company that is not only selling a cup of coffee, but an experience. Its stores are designed to make customers feel comfortable. The stores are equipped with electrical outlets and wireless internet access for customers who might need to use their laptops. They also have Starbucks card which they hope will strengthen customer loyalty and increase customer service. The company has been trying to differentiate each store within the company by having it represent the specific needs of each community in which it is located. Individual stores serve as a medium for each community, and as an extension of the community's values and ambitions. Each store portrays an atmosphere of relaxation, socialization and ambience.

Starbucks Analysis

Starbucks had positioned