Starbucks Is A Biggest Coffee Selling Retail Chain Marketing Essay
Starbucks is a biggest coffee selling retail chain in the world. Starbuck famous for his different or unique style of marketing for production and selling of coffee. Starbucks network is growing from one corner of the world to another. Now, in today economy HRM plays major role in success of organisation. The key success of this organisation is its strategist head Howard Schultz. He applied a wonderful strategy to consumer based marketing & expand the organisation very rapidly. At a same time he reaches the high growth rate of 22% approximately.
As a recruiting to people’s or employee in Starbucks. Accordingly to three quality like adaptability, dependability, ability to work as a team. Training and developing are now become a internal part of human resource. HRM is very important for every organisation because of change in working policies and strategy. In this assignment, I analysis role of HR in global economy, importance of retaining skilled & qualified worker, and importance of human resource in strategy management.
Starbucks was started in 1971. At that time it was a small business. Three coffee lover teacher whose name is an English teacher jerry Baldwin, a history teacher zevsiegel and writer Gordon bowker started starbucks coffee, tea and spice in seattle, Washington. Starbucks is growing day by day. In 1981, Haward Schultz has interested in starducks, they convinced the three partners to hire them at marketing position of the company. Schultz had done a wonderful research work. He has learn so many think, when he visited Italy. He learn the Italian coffee bar culture. They saw the ready-to-drink coffee by mug. He suggested to introduced this idea in US. After three year in 1985, Starbucks introducing espresso coffee. This concept was an tremendous success, espresso coffee sale is much higher than the whole bean coffee. In the same year, Schultz left the Starbucks and started there own Glornale coffee bar with the partnership with Dave Olsen.
In 1987, Baldwin, Siegal, Bowker decided to sell the starbucks to Schultz for $3.7 billion. After that Schultz changing the name of Glrornale coffee company to starbuck corporation. Schultz have started to increase the level of specialty drinks. Schultz added some new espresso beverages, hot & cold coffee drinks, sandwiches, pastries, snacks, and items such as mug & tumbler.
During 1990s, company have an agreement with united airlines to serve starbucks coffee on flight. It is a wonderful opportunity taken by the company to entered in airlines industry. They serve, tea , coffee, flavour ice cream, etc.
Company headquarter in Seattle and operating mainly in the US. In 2003, Schultz opened aver one thousand licensed Starbucks related retail store in South American, Canada, Europe, Asian-pacific in the middle east and Africa.
Starbucks is the largest coffee bar company in the world with over16855 store in 50 countries including our 11000 in US, over 1000 in Canada and over 700 in the UK. [www.managementparadise.com]
History of retail industry
The retail industry first ever started in US in 18th century, but restricted to general stores. They develop the retail store where population is more than 5000. After world war-II, retail store or supermarket grow vigorously in US and Canada. The first retail store open in 1925. The sears and roebuck store in one of the first retail store to ever open up. Sears and roebuck store started their business that sold different think such as clothing, shoes & household item in the same retail store. This store getting success with the addition of the product line in their catalogue.
The retail industry is the source for distributing of finished good to the customer. The retail industry are of department store, general retailer(individual/family), specially store and discount store.
Retail industries are of different type:
Personal goods store retailing: This type of store deal in hard and soft good loke electronic appliance, sporting goods, apparel retail.
Non-store retailing: Non store includes E-commerce, infomercial vending machine & catalogue sales.
Food and beverage retailing: This type of retail industry includes cafeteria (eg. Starbucks) pubs & restaurants.
Automotive services & retailing: This type of industry includes Automobile workshop, spare parts & Accessories.
Retail industry would growing very rapidly in past decade. They provide the favourable chance to participate in wonderful shopping experience that ever seen before and make positive effect on the history of retail industry.
Starbucks strategies and HRM practices
The store expansion strategy:
In early 1990, Starbucks started geographic expansion strategy that embattled (targeted) area which is highly developed and good demographic profiles which could support the company development. For every targeted region, Starbucks select the metro city to serve as a centre point or focus point. Starbucks send a professional team in metro city to achieve the target of opening a 20 or more stores in the two year of early 90s. They opening once store in the city and captured the whole centre, which is helpful for opening a additional stores in smaller area crowed place in the region. Now, they are going for foreign expansion, Starbuck maintain their position in the market because different region have different culture. Starbucks recent all the new zone vice-president with marketing & operating experience in retailing chain-store.
Starbucks stores grow steadily is more successful. In 2004, Starbucks stores generated an average of $5,294,247 total revenue is more than the average of $ 3,288 908 in 2002. That is the main reason of Starbucks brand get more repudiated in the eye of the public. Starbucks opening more and more new store, now they reached his pick point in the market. [Exhibit-I]
Starbucks stores also offer a drink in regular or decaffeinated coffee, "Coffee Date, and a wide selection of Italian espresso drinks. In addition, customers can choose from a wide range of roasted coffee beans just (the land site and transported home, distinctive packaging may choose), the choice of fresh baking and other food products, soft drinks, juices, tea, coffee and accessories, and related equipment. In 1997 the company launched a Starbucks Barista machine home new system for the filter holder, coffee at a time and a new list of Starbucks espresso to use are . version of the popular Frappuccino drink mix, a society rich in protein, carbohydrates and vitamins, has been tested in several markets in 1997, is another promising new product for possible introduction in 1998, Chai Tea Latte test a combination of black tea, exotic spices, honey and milk.
A mixture of sales accounted for 61 percent of the coffee beverages, 15 percent of coffee beans, 16 percent of food and 8 percent of coffee products and equipment.
In recent years, the company started selling a CD Jazz & Blues special, in some cases, special collections, was created by Starbucks, is used to store background music. The idea of a CD with the original store manager Starbucks, who has worked in the music industry and choose the new "Orchestra Month" Starbucks sells backup storage. He praise from customers who buy the music they heard, and suggested that was the direction of the company's market cassette music you want.
The company is constantly looking for new ideas, new products and new experiences for customers who are only involved to develop Starbucks. Shultz and other senior executives drummer has always been open to the Starbucks Experience.
SWOT analysis of starbucks:
Better relationship with coffee supplier.
Starbucks never observed the strike & work stoppage.
Starbucks stores located in crowds area.
More pressure on employee.
Starbucks have expanded to fast & steady in US market.
They do not allow smoking in stores.
Foreign expansion (European & latin American)
Various numbers of brands.
Selling opportunities in airlines, hotel & office coffee supplier.
They expansion as a supermarket in to international level.
Now, coffee market is saturated.
Increase the cost of coffee beans in near future.
High competition in coffee market.
Starbucks UK company profiles :
In 1998, Starbucks entered in UK market with 60 outlets, UK based seattle company. On November 2005, London has more outlet than manhattan.
In 2004, Starbucks corporation reported net earnings in excess of $390m (£207m) on sales 30% ahead at $5.2b (£2.8b). The UK arm forecast to turn over £220m in 2004.
Starbucks corporation has more than 9000 coffee bar in 35 countries in North America, Europe, The middle east etc.
No. of UK stores: more than 430
No. of Employee worldwide: 74000
No. of UK employees: about 5500
According to the current economics position, Starbuck have closed many of their branches in the world & UK expansion plans are as planned, they planning to sell their non profit UK branches.
Four elements of Starbucks strategy:
According to Hambrick & Fredrickson, “ A strategy is an integrated, over-arching concept of how the business will achieve its objective.” A Starbucks strategy is the combination of all four element.
Arena: where will be active?
Vehicles: how will we get there?
Differentiators: how will we win in the marketplace?
Economic logic: how will we obtain our revenues?
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