Starbucks Corporation

Introduction

Founded in 1971 at Seattle, Washington, Starbucks Corporation is one the world’s most famous coffee company  known for its taste customer experience, quality and popularized dark roasted coffee. The mission statement of the company emphasized working with high standards of excellence and diversity to all the aspects of the main product. The speed at which Starbucks is expanding is business operations puts the company at risk with some of its missions being ignored while entering the new markets. The company has had several controllable and uncontrollable elements as it enters the global markets which are more similar to those in their domestic markets.

Controllable and Uncontrollable elements

For Starbucks to succeed in solving the problems, the company has to invest more capital in advertising campaigns as a way of improving its brand image. They also have to concentrate on expanding internationally especially on BRIC nations which are encountering the maximum population growth in the globe. Through this, the company will be able to gain more consumers and gain more profits on their products. They will also grow internationally and reach a large number of people around the world. Instead of the company targeting the crowd with higher income, they can position their products by focusing on the middle class. Through this, the company will attract more potential customers from the middle class and also maintain those from higher income.

Starbucks can avoid the cultural issues by creating comprehensive strategies that depend on locations to reach their goals through research of the beliefs and culture of any given country and also introduce the products in line with the likings of the public. The company can also fight the risks by focusing to improve the services and quality of their coffee if they meet the needs of employees. Starbucks will have a major success and gain more customers if it finds more strategies that will help fight the risks faced.

The Corporate Strategy Critique

Starbucks has been using different methods in maintaining and expanding their dominant position in the market including operating internationally at a loss, buying out the leases of competitors and clustering different positions in a small geographical area. The critics labelled this anticompetitive. Starbucks also used its influence and capital in obtaining several locations in which some operated at a financial loss, a situation claimed as a biased effort of driving out self-regulating and small competitors that cannot afford to pay the prices that had inflated for premium real estate.

The company has been needled severally by the late night show hosts, as the rapid growth continued because of the seeming ever comer expansion strategy. Several patrons and owners of local coffee shops also began to speak out and demonstrate against the predatory moves and aggressive moves of Starbucks (Marques, Camillo & Holt, 2015). More critics were complaining that Starbucks was deliberately trying to locate its near coffee merchants as a way of siphoning off sales which placed them directly across the street.

Starbucks has been incurring losses due to the difference in customers’ expectations and corporate strategies. The company believes that they can sell more with more outlets and they expanding their openings every time not only in their local country but also abroad. The company is not likely to succeed in achieving its mission if they increase their numbers but do not satisfy the needs of their customers, Starbucks also does not have a differential pricing for the younger generation with their target consumers being the older generation or the baby boomers.

Despite the company controlling their business fully in the United States, it also has franchisee beyond the United States. The strength of Starbucks is undermined since it depends on franchisees’ outside U.S.A (Marques, Camillo & Holt, 2015). Although the company is becoming global, its spending does not match the status. On advertisements, Starbucks spends one per cent of its revenue on advertisement only while other companies are spending more than 10 per cent. With this low spending on advertisements, the company will not be able to build its brand outside the United States.

Also, the pay that Starbucks offers its employees does not match their workloads. This has created dissatisfaction among the workers which affects their steering services and the coffee they make. The chairman has to be more cautious about different ethnic and cultural affairs. Since the company has a market in the Muslim dominated countries, the chair of the company should not make any comment that is scanty against the Palestinians. This not only shows respect but also creates a mutual understanding between the company and the people living around.

One of the most recent events in the life of Starbuck’s corporation is that it has become a target of conservatives to President Trump, which is good news to the brand and image of the company (Taylor, 2018). The company has been planning to employ more than ten thousand refugees within the next five years even after the president of U. S ordered that refugees were barred from entering the country. Despite the boycotting threats the company does not have any plans of stepping back. Another recent event is that the company has been making a major change that would alter the way the world takes coffee, the chairman announced his intentions of stepping down from C.E.O for him to focus more on building the premium brand of the company (Bariso, 2017). This would enable the company to expand its roasters and maintain their customer base. Schultz remained optimistic that the plan would work and lead them to the next generation of success.

References

Bariso, J. (2018). Starbucks Is Making a Major Change That Just May Alter the Way the World Drinks Coffee. Retrieved from https://www.inc.com/justin-bariso/starbucks-is-making-a-major-change-that-just-may-alter-the-way-the-world-drinks-.html

Dorn, M., Messner, C., & Wänke, M. (2016). Partitioning the choice task makes Starbucks coffee taste better. Journal of Marketing Behavior, 1(3-4), 363-384.

Geereddy, N. (2013). Strategic analysis of Starbucks corporation. Harward [Електронний ресурс].–Режим доступу: http://scholar. Harvard. edu/files/nithingeereddy/files/starbucks_ case_analysis. pdf.

Lemus, E., von Feigenblatt, O. F., Orta, M., & Rivero, O. (2015). Starbucks Corporation: Leading Innovation in the 21st Century. Journal of Alternative Perspectives in the Social Sciences, 7(1), 23-38.

Marques, J., Camillo, A. A., & Holt, S. (2015). The Starbucks culture: responsible, radical innovation in an irresponsible, incremental world. In Handbook of Research on Business Ethics and Corporate Responsibilities (pp. 302-312). IGI Global.

Shirdastian, H., Laroche, M., & Richard, M. O. (2017). Using big data analytics to study brand authenticity sentiments: The case of Starbucks on Twitter. International Journal of Information Management.

Taecharungroj, V. (2017). Starbucks’ marketing communications strategy on Twitter. Journal of Marketing Communications, 23(6), 552-571.

Taylor, C. (2017). Starbucks has become a target of Trump-loving conservatives — and that’s great news for the brand. Retrieved from https://www.businessinsider.com/why-trump-supporters-boycott-starbucks-2017-2?IR=T

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