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Starkbucks - Strategy Management

Essay by   •  February 13, 2011  •  Research Paper  •  2,584 Words (11 Pages)  •  1,876 Views

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Today, coffee is a mass consumption product, it is accessible to everyone. Most of the people usually drink one to two cups of coffee daily. They believe that coffee can make them relax and woke them up. Thus, people are demanding and desire variety on coffee.

States as above reason, coffee shop is necessary occurs. However, develop a successful coffee shop is difficult then running a restaurant. Coffee only is a kind of beverages and it not a meal. There are never having regular drink time and regular quantity. That really needs a perfect business strategy to run their business on track. ÐŽ§In great companies, strategy becomes a cause. That is because a strategy is about being different.ЎЁ (Jean-Jacques, 1997) It is a difficult way to change beverages from side dish to main dish. Therefore, it needs to build it as different then other restaurants and make it as major revenue for the shop.

Meanwhile, the essence of strategy is that set limits on what we going to try to accomplish. The company without a strategy is willing to try anything. Once we are trying to do same things as rivals, then it is unlikely that will be very successful. It is incredibly arrogant for a company to believe it can deliver the same sort of product that its rivals do and actually do better. Thus, that is the space for unique business occurs. StarbucksÐŽ¦ is one of the store success helped specialty coffee products begin to catch on across the world.

-Introduction Of Company Background

Thirty years ago, In August 17, 1907; Starbucks was a single store in SeattleÐŽ¦s Pike Place Market selling premium roasted coffee. At that moment, the company only was a local coffee roasting facility. That remained their business until 1982 when Howard Schulz joined. He was the new marketing executive and convinces more local cafes, upscale restaurants and hotel to buy Starbucks coffee. In 1983, Schulz got inspired by the Old Italian coffee bar tradition to serve fresh brewed Espresso and Cappuccino. In 1985, he opened the first coffee bar and naming as ÐŽ§TI GiornaleЎЁ. In 1987, he bought Starbucks and expansion in Chicago and Canada Vancouver.

-Today In Asia & Company Vision

In the latest 1990s, it had developed on Asia counties such as Taiwan, China, Singapore, Thailand, New Zealand, South Korea, Malaysia and Hong Kong.

In Asia, Starbucks most common strategy is license to local operator in return for initial licensing fees and royalties and store revenues. It is already a global roaster and retailer coffee with over 5,000 stores in the world nowadays.

Before knowing the company business strategy, let have a look on the company vision. StarbucksÐŽ¦ long term goal is to ÐŽ§establish Starbucks as the most recognized and respected brand of coffee in the world.ЎЁ (, 2005) They are successfully achieve on it and they are keep improve with it still.

-Generic Strategies: Differentiation

It is easy to identify that Starbucks having success differentiation model on generic strategies because their business strategy is base on marketing percepts, product quality and innovation with unique style and image. They also develop well on their brand loyalty since the company has remained true to its mission statement.Starbucks offer and sells a ÐŽ§memorable experienceЎЁ, a third place away from home and work, and a place to be educated about coffee.ЎЁ (, 2005)


-Tangible And Intangible Aspects

Today Starbucks does not need to make itself known on the international level because the brand name is already globally recognized. Shown by information, their current positioning is for people who want a quality product on coffee and environment. Their target broad age range is for both women and men within 25 to 54 across a breadth of income levels, but with reasonable to high disposable incomes. (Starbucks everywhere, 2005)

-Brand Loyalty

Starbucks realizes that customer loyalty is one of the important factors to cause company success. Thus, they have to obtain the highest level of customer loyalty and receive the much profit on it. In facts, they caught the middle level class personÐŽ¦s habit on coffee and willing to spend on quality rather then quantity. They built a company culture that attracts the kind of peoples who are really inclined to provide great service and be involved in their communities. Beside, Starbucks built its business on providing a comfortable third place, that community gathering spot between work and home where customers can meet and enjoy a high quality cup of coffee. Before that, most of the people only can enjoy quality coffee in their own homes since there no specific place and rich knowledge about coffee can get from outsider. There never had a store appear which have a brand with professional on coffee. As a result, they have successful built a strong brand and being accepted and recognized without doing a huge marketing campaign or long period of introduction.

-Marketing Percepts of Differentiation

Moreover, Starbucks makes every effort to be a socially responsible company. Their scheme is make Starbucks as well known as possible and incorporate their brand name is different situations as possible. Social Responsibility is more than simply charity. Stated as Milton Fiedman (Hoover, 2004), ÐŽ§The social responsibility of business is to increase its profits.ЎЁ It may involve efforts to identify social needs as the basis for profitable activities. Most of the corporationÐŽ¦s interests are served by its being socially responsible; thus many benefits accrue to the socially responsible corporation. These may include better motivated employees, more loyal customers, and more supportive communities. When these benefits are realized, it will agree that corporations should be socially responsible. For instance, stores in New York, Washington D.C., and the store in Pennsy lvania, they used to give free coffee for relief workers after Sept 11.

According Annual report,ЎЁWe also responding to concerns that growing coffee caused rain-forest carnage, to help Mexican farmers improve the quality of beans grown under a forest canopy. Also, we use recyclable products wherever possible. And make significant contributions to local charities that focus on children, environment, the homeless and AIDS support.ЎЁ (Annual report, 2001) This proves about that the companyÐŽ¦s reputation and image are success and it directly proportional to the amount of incoming profit that the



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