Current Situation And Performance Of Starbucks Marketing Essay
*Starbucks started working in Seattle’s Pike Place Markets in 1971. Its aim was to provide coffee to many of restaurants and bars around it. For this purpose, Howard Schultz was recruited with an evergrowing expectations of marketing and retail efforts of Starbucks.
* Schultz gave a new direction to the company throughs his innovating ideas. In 1982, he visited Italy and took decisions to introduce some of the Italian priniples to develope a strong bar culture. Schultz startrd a new store called GIornale in order to serve quality coffee beans by utilizing the abilities and specialities of Starbucks, and sarted brewing of coffee from these beans..
*All the assets of Starbucks were taken over by Giornale by 1987 and its name was changed to Starbucks Corporation. The number of stores of Starbucks had increased rapidly to 17 by the end of same year and florished further to Chicago and Vancouver.
*The company moved further to Seattle headquarters in 1990 and a new roasting plant was started leading to a vital increase in assets. In early ninties, the company also introduced many new policies to its strategy to increase relationships and start new ventures as the company wanted to develope organizations to enhance its progress.
*The company reached a new milestone in 1995, when it launched its 676th store along with a further increase in the product line (such as introduction of compact discs) in its stores . This led to an increase in sales resulting in increase of profits.
*Starbucks entered the markets of Japan, Singapore and Hawaii in 1996 and enanced its business to these popular world markets. For this purpose the Starbucks Corporation entered into many joint ventures with other companies like Sabazy inc. that helped in the development of coffee houses in other parts of world including Japan.
*The company went through an exponential growth, opening 3300 stores upto the year 2000. The company also entered its dream countries of business such as England, China and Australia.
* Starbucks Corporation showed an exponential growth in last ten years, reaching a total count of 5113 international stores and 11567 stores in United States
2- Current situation
The Company is now aimed at becoming a major player in international market and the situations worldwide also seems to be in favor of the Starbuck’s business. The company sets its goals to changing people’s lives all around world. The present scenario shows that the company is near to achieve its targets as its current situation in the international market and better performance by its ventures throughout the world. Starbucks have presently doing its business successfully in countries like Australia, Bahrain, Canada, Hong Kong, Israel, Japan, Kuwait, Lebanon, Malaysia, New Zealand, Oman, Peoples Republic of China, Philippines, Qatar, Saudi Arabia, Singapore, South Korea, Switzerland, Taiwan, Thailand, United Arab Emirates, Egypt, United Kingdom and the United States.
2.1 Current performance
Starbucks has attracted the attention of many major companies around the world as it has done an eye catching performance in the recent years and the conditions has helped a lot to achieve its goals to become a major global player. Nowadays, many of the major global companies are interested in working with Starbucks in joint ventures which brings in good news for the company with a hope of further spreading its roots strongly in the world market, strengthening the aim of the company to become a leading coffee retailer in the world, which further strengthens the mission to become one of the leading specialty coffee retailers in the world.
However, the net revenues increased 3 percent to $2.5 billion for the fourth quarter of 2008, compared to $2.4 billion for the fourth quarter of 2007. For the 13-week period ended September 28, 2008, Starbucks reported net income of $5.4 million, which included $105.1 million of restructuring charges and other transformation strategy costs. Net income was $158.5 million for the same period a year ago. The company actions announced in July of 2008 to close approximately 600 company-operated stores in the U.S. and 61 company-operated stores in Australia, and reduce approximately 1,000 open and filled positions within its leadership structure and non-store organization.
2.2 Strategic posture
“To inspire and nurture the human spirit— one person, one cup, and one neighborhood at a time”
“The primary mission of Starbucks is to establish itself as the leading supplier of the finest coffee in the world along with keeping its principle and promises.
This success would not have been possible without a set of principles and goals that the company aimed to achieve.
Main six principles of Starbucks are :
1- Providing a great work environment and build an atmosphere of respect and dignity.
2- Embracing diversity as an important component in the way we do business.
3- Apply the highest standards of excellence to the purchasing.
4- Roasting and fresh delivery of our coffee.
5- Develop enthusiastically satisfied customers all of the time.
6- Contribute positively to our communities and our environment, and recognize that profitability is essential to our future success.
Employees are guided based on these principles for all employees from managers to workers in ordere to achieve the company’s goals, while maintaining a certain type of standard.
Employees get guidelines as well as a focus from the mission statement to make strategic decisions. Mssion statement supports customers alongwith employees taking the concern that customers should be satisfied all of the time.
Vision statement sets the goals for the company and the mission statement alligns wih the vision statement to achieve these goals. According to the mission statement the company will work hard in the purchasing, roasting and fresh delvery of its coffee and highest standards of excellence will be applied to achieve this. This statement supports the idea that Starbucks uses the best available resources to give it a recognized and respected name.
2- Objectives & Strategies:
Objectives of Starbucks are as:
It has always been, and will always be, about quality. They are passionate about ethically sourcing the finest coffee beans, roasting them with great care, and improving the lives of people who grow them. They care deeply about all of this; their work is never done.
They are called partners, because it’s not just a job, it’s their passion.Together, they embrace diversity to create a place where each of them and can be themselves. Respect and dignity is awarded to everybody. And hold each other to that standard.
When they are fully engaged, STARBUCKS connect with, laugh with, and uplift the lives of customers— even if just for a few moments. Sure, it starts with the promise of a perfectly made beverage, but their work goes far beyond that. It’s really about human connection.
When their customers feel this sense of belonging, their stores become a haven, a break from the worries outside, a place where one can meet with friends. It’s about enjoyment at the speed of life—sometimes slow and savored, sometimes faster.Always full of humanity.
Every store is part of a community, and they take the responsibility to be good neighbors seriously. They want to be invited in wherever we do business. They can be a force for positive action— bringing together our partners, customers, and the community to contribute every day. They see that their responsibility—and potential for good—is even larger. The world is looking to Starbucks to set the new standard, yet again.
From all what mentioned above that Starbucks is aiming to success through quality of product, diversify in business and place, to satisfy customers and shareholders, through pleasant and nice existence nearly to everyone.
3.1 Michael Porter’s five forces
Michael Porter defines five forces impacting a firm's competitiveness—threat of substitutes, threat of new entrants in the industry, bargaining power of suppliers, bargaining power of customers, and the intensity
of competition within the industry. A firm's strategic decisions to respond to these five forces are a source of risk also. The company is facing a real threat of substitution from many other companies that producing the same product that is satisfying the same need. This is in its domestic market and even in the international
market specially Europe and Middle East.Also Starbucks is facing a real problem of rival competition due to its uncompetitive price all over the world and even in its domestic market.Also the taste of Coffee had been judged by customers as an artificial taste especially in Japan.
Suppliers bargaining power is really represent a threat for Starbucks.That they decided to deal with a 51% women or minority ownedsuppliers. Also they are not dealing with suppliers who don’t follow the same environmental ethics that are for Starbucks. This may lead them to lose a good opportunity or deal with a supplier that they will not deal with him. Also dealing with small suppliers instead of dealing with limited number of big power full suppliers is not giving them real good deals for facilities and prices.
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