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Case study Starbucks

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Table of content TABLE OF CONTENT 2 INTRODUCTION 3 A SWOT ANALYSIS OF STARBUCKS 4 Strengths 4 Weaknesses 6 Opportunities 7 Threats 8 BCG MATRIX 9 ANALYSIS OF STARBUCKS USING THE BCG MATRIX 10 ATTACHMENT 13 BIBLIOGRAPHY 14 SOLEMN DECLARATION 15 Introduction Starbucks is a famous coffeehouse. Until the mid-1980's it was only a provider of coffee to fine restaurants. Thereafter Howard Schultz, director of Starbucks' retail operations and marketing, was impressed by the popularity of coffeehouses while visiting in Milan, Italy and hewhile he was in Europe envisioned creating a similar experience for the United States1. His idea was born. He wanted to bring the coffee bar culture to the Americans. So Starbucks began opening coffeehouses in the United States andstarted to realise his idea and so created a new trend. StarbucksThe secret to success is not only to not only sell high quality coffee, butbut also to deliver a greatsell an experience for the consumer. Today Starbucks has about 20 million customers each week in about 5500 coffee houses all over the world2. While haunting to increase sales more and more, Starbucks createdhas got a special growth strategy to increase sales. They open manya lot of stores in a very short period of time,period, expand the food menuing numerous food offerings and open stores inalso getting into new marketssegments, i.e.for example supermarkets. StarbucksThey then develops new products for their coffeehouses like bottled coffee or Starbucks-flavoured ice cream. In addition to that, Starbucks tests new ideas for its coffeehousescoffeehouse concepts, such as providingfor example with live music for the customers enjoyment. More recentlySince a few years, Starbucks has been expanding into foreign markets.opening more and more stores outside America. The difficultimportant question is, whether or notwhether Starbucks' growth rate will continue within the next few years. Starbucks'On the one hand critics believesay that Starbucks is growing too quickly and is losing its original the focus. ...read more.


Starbucks adding food to their product line to test the potential customer base for a new line also tests new food which indicates that entering the food market might be the their next step. they want to go. With this Tthe company haswould have the chance to offer food that would parallel the success of could be as successful as its coffee. Starbucks hasThey tested numerous different food products everything from doughnuts to Greek pasta salads. Starbucks also teamed up with PepsiCo to create a adopt the brand on Frappuccino drink s and a new DoubleShot expresso the companies hope will succeed to brand stardom much like the Starbucks coffee.drink. Beyond this Starbucks also entered into a joint venture with Breyers and created a coffee ice cream which has recently become a leading brand in the coffee ice cream flavor. ice cream is nowadays a leading brand of coffee ice cream after Starbucks established a joint venture with Breyer's. In addition, Starbucks invested in Caf� Starbucks, a European-style family bistro, where the costumer has a wide variety of menu optionschoice from huckleberry-pancakes too oven-roasted seared sirloin. Alongside, Starbucks is also testing Circadia, a new food venture, where the customers are givenhave Internet access and are able to listen to live music. Both of these store concepts offer new opportunities for expansion. in the future. Besides increasing their presencepresence, Starbucksthey could also reach new target consumer groups who have so far not been attracted by their coffeehouses.shops. Starbucks has always been able to offer new coffee experiences, createing new products or opening different typesnew kinds of stores19. Threats One of the biggest threats toof Starbucks is its rapid grand expansion all over the world. It is particularlyespecially Starbucks growth strategy which poses a threat tofor the company. Starbucks especially concentrates a great deal on store growth. Almost 85 per cent of sales are generated through its coffeehousesstores. ...read more.


If they succeed in competing with other caf�s withof a similar style this SBU could be another profitable SBU in the future. After positioning Starbucks� products on the BCG matrix28 the determination that it can be said that they have a stable source of revenue is easily made. With the majority of their sales coming from the coffee sold in their stores and two profitable, if only on a smaller scale, joint ventures they have enough money to invest in other new products or stores to ensure that they will be just as successful in the future. Besides investing this money in new stores enabling them to serve an even larger market, this moneyit can be invested in their coffee sold in supermarkets. Rapid growth of the premium coffee segment indicates that it won't be long before a number of competitors force their way ionto the market place. Investing into this SBU will enable Starbucksit to develop into another cash cow in the future. Regarding the sandwiches sold in their stores Starbucksthey needs to reconsider whether or not if this product lineis something they should continue to invest in. the future. The prospects for the future look promising as they have two strong stars and other smaller products that can carry the company into the future. Looking at Starbucks as a whole it is easily recognizable can be seen as a star. Although there are a number of "copycats" trying to move in on their market share, there is still a greatthe potential for the company to grow. Up until now Nnot all states have their own Starbucks store, an indication that the market is still growing as there is room to expand in the company's home turf. Although they have tripled their sales and profits over the last 5 years, they need this money to invest in new stores in states such as Alabama and Mississippi as well as invest in theirnd their new store concepts such as Caf� Starbucks29. If they are able to expand successfully and the market ceases [RD3]to grow they will eventually turn into a cash cow. ...read more.

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