Starbucks Analysis
Starbucks Marketing Strategy
Starbucks Information
Starbucks Target Market
Starbucks Competitors
Starbucks Marketing Mix
Starbucks Experience
Starbucks SWOT
STARBUCKS ANALYSIS
As stated earlier, Starbucks historically positioned itself as an upscale brand. Due to the economic downturn and increased competition from large quick-service restaurant chains and specialty retailers, the company saw its profits being eroded. The company introduced new products that would appeal to price-skittish customers and implemented techniques that would standardize its stores and reduce costs. The new strategy carries with it its own risks. Starbucks has been known as the "anti-fast food" chain, and any perception that it is now competing with McDonald's in bare-bone products and services could risk brand devaluation. Starbucks's most loyal customers might start to see its stores as being no different than any other McDonald's store, and move to rival coffee specialty stores or independent coffee shops. The new standardization techniques could also face resistance from Starbucks employees or "partners". Starbucks "partners" might see the new standardization techniques including time saving measures and material cost reduction measures as a way of turning them into robots or factory workers.
Since Starbucks enjoyed such a rapid growth in its business, the company expanded anywhere it saw profitability for its stores. This has meant that Starbucks stores are as readily available as McDonald's and as such the Starbucks "experience" the company asserts it provides, might be seen as no different than the experience of McDonald's. As in the case of appealing to mass market with bottomless coffee, Starbucks's core customer might move to other stores where they perceive the "experience" is still being provided.
If Starbucks continues its store closing measures and implementation of its various cost cutting initiatives, Starbucks is likely to see increased profitability. The firm has closed over 800 company-operated stores in the United States and approximately 100 stores overseas ("Starbucks Posts Strong Fourth Quarter and Fiscal 2009 Results"). Closures of these less profitable stores will likely increase company's same store sales and profitability. The company is also introducing 100 new stores in US, and 200 new stores in International markets, which might positively affect the company provided they are successful. Aggressive adoption of "no-frills" products to bring in new customers could also affect Starbucks's profitability. Until now, any increase in commodity prices are more or less offset by company's high prices, but a "no-frills" products would put downward pressure on company's profitability, and possibly even damage Starbucks image as an upscale brand.
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