SWOT Analysis – Strengths, Weaknesses, Opportunities and Threats

(SWOT)

This section presents a SWOT analysis for Starbucks; SWOT is a method of

market analysis; this familiar acronym stands for Strengths, Weaknesses,
Opportunities and Threats. These four words represent the major constructs firms
need to consider to make the most of their internal set up and the external
marketplace characteristics. Its major value is in the identification of those
business critical factors which provide opportunity for the firm, but also any threats
from competitors and the changing business environment. These need to be
weighed up against the internal factors (strengths and weaknesses) of the business
to develop the best business solutions and strategies, both short term and long term
(Meek & Meek, 2003).

(i) Strengths

~ One of the major strengths of the company is the strong Starbucks brand and it’s
stylish image; this has made it very popular with young people, particularly
students. According to Alderman (2012, no page number) “laptop-wielding young
people embrace the coffee chain as an avatar of American popular culture”

~ Starbucks has a very modern website which is attractive to users and easy to
navigate. This is so important in this digital age when the majority of people rely
on the Internet to gather information about goods and services.

~The loyalty scheme introduced by Starbucks is another major advantage, a

strategy adopted early on in the firm’s development. Encouraging consumers to
increase their frequency of purchase through the use of loyalty cards is now a
marketing tactic successfully adopted by many companies in different sectors.

~ The fact that Starbucks beans are ethically produced is a strong advantage to the
company as consumers are increasingly concerned about sustainable production
and corporate responsibility. A recent large-scale survey on social responsibility
(Nielsen, 2014) shows that around 50% of consumers will choose to buy socially
responsible brands. This includes going so far as to check packaging for claims
about sustainability.

(ii) Weaknesses

~ Starbucks has been experiencing financial difficulties in recent years, even

recording a loss (Wilkes Group, 2012.) putting it at a disadvantage in terms of
having the capacity to invest in developing new products or expanding its network
of stores.

~ Perhaps as a result of poor performance Starbucks has experienced some decline

in its stock values which also can result in reduced investment.

~ As students and the youth market is one of the main market segments for
Starbucks, this is one age group in the UK demographics which is declining and
projected to continue to do so over the next few years (ONS, 2011).

~ The tax avoidance scandal of recent years, when Starbucks avoided paying
corporation tax in the UK (Bergin, 2012), temporarily dented the company
reputation. However, in the long term it does not appear to have affected the
popularity of the firm with consumers still patronising the stores.

(iii) Opportunities

~ The taste for coffee houses and coffee consumption, particularly as part of the
working day routine is continuing (Wilkes Group, n.d.) and showing little sign of
slowing down.

~ This is supported by a recovering economy and signs that consumers are finding
they have more discretionary income to spend (CEBR, 2014).

~ The relaxation of the licensing laws has provided an opportunity for firms like
Starbucks to broaden their offering in coffee houses to include alcohol. This will
attract new market segments.

~ There are further potential niche markets or segments to target, for example
developing a caffeine free alternative for those consumers concerned about the
health risks of too much caffeine.

~ Increased interest in corporate responsibility, ethical trading and sustainable

coffee growing techniques for reducing the carbon footprint provide Starbucks
with a competitive advantage as it has always adopted ethical business strategies.

~ The enduring trend for ‘drive thru’ premises and kiosks on railway and bus
stations as a valid and popular way of delivering products in the food and drink
sector provides good, relatively low cost, ways for Starbucks to increase sales and
raise brand awareness and loyalty further.
~ An extension of this might be ‘pop-up shops’; temporary occupation of premises
as part of for example, music and cultural events. This would also be an ideal
vehicle for reaching the target market segments particularly young adults and
students.

~ The increasing globalisation of markets provides wider opportunities for

Starbucks to expand into new markets; some authors maintain that young people in
different countries have more in common than people of different age groups in the
same country (Usunier and Lee, 2013). This presents “an opportunity to target
consumers sharing a common set of values, needs, habits and preferences”
(Usunier and Lee, 2013 p. 131).

(iv) Threats

~ The increasing emphasis on healthy lifestyles and reducing caffeine intake for
people with certain health conditions is a potential threat to coffee house
companies (Lopez-Garcia et al, 2008). The secret will be finding suitable
alternatives for those consumers who cannot or choose not to drink caffeinated
coffee. A quality decaffeinated alternative will provide access to this sub-segment
of the market.

~ Climate change may well represent a threat to coffee production and hence make
the raw materials more expensive.

~ There is very strong competition in the coffee house market with Costa Coffee
firmly in the number one spot (Wilkes Group, n.d.) It is important for Starbucks to
maintain relationships with its customers; the loyalty card is a good way of doing
this as is two way communication with consumers via social networking sites
(SNS). However, Starbucks must be careful to ensure not all messages it sends out
to consumers are sales promotions; according to (Cohen, 2011) nine out of ten
communications should be sharing information not sales pitches.

Analisis Internal Starbucks Coffee

1. Strengths

 Starbucks adalah pengecer terkemuka dan roaster untuk

kopi merek khusus di dunia
 Citra merek yang kuat dengan motto “The Starbucks
Experience”
 Starbucks adalah sebuah organisasi global dengan lebih dari
16.000 ritel di 48 negara di seluruh dunia
 Salah satu waralaba terkuat didunia dengan lebih dari 6500
toko izin dunia
 Starbucks dikenal untuk menyediakan produk unggulan dan
jasa
 Starbucks ditawarkan baik manfaat fungsional dan
emosional
 Memiliki pelanggan setia di semua negara starbucks yang
ada
 Control kualitas tinggi di seluruh starbucks ritel
 Memiliki kualitas tinggi yang konsisten pelayanan
 Khas rumah-rumah kopi Italia, canggih dengan nuansa
music, interior desain dan karya seni
 Outlet diposisikan di lokasi jalan tinggi, mall, dalam area
bisnis lain seperti bangunan kantor
 Wi-Fi layanan internet diseluruh starbucks ritel
 Pelayanan kopi cepat saji
 Proses penyusunan produk tidak perlu teknologi yang sangat
canggih
 Memiliki banyak variasi rasa
 Terbatasnya jumlah pesaing yang kuat
 Pangsa pasar dan pertumbuhan pasar tinggi
  Selalu bertujuan untuk membantu lingkungan dukungan, ex:
dengan menggunakan jaringan daur ulang
 Selalu memperlakukan karyawan sebagai mitra bukan hanya
sebagai karyawan
 Penerimaan semua pertanyaan, komentar dan umpan balik
dimana pelanggan dapat mengirimnya dengan email, sms
atau hanya menginformasikan di starbucks ritel
 Memiliki starbucks serikat pekerja yang membantu
karyawan untuk menginformasikan pikiran mereka kepada
manajemen

2. Weakness

 Harga tinggi yang biaya tidak semua jenis pasar bisa

membeli produk starbucks
 Starbucks dianggap ‘Amerika Global’ yang mengeluarkan
biaya sentimental bagi pelanggan di beberapa Negara
 Terlalu focus pada pasar domestic AS
 Starbucks menolak untuk menjamin bahwa susu, minuman,
cokelat, es krim dijual di took perusahaan bebas dari bahan
rekayasa genetik
 Karena kesempurnaan atas pelayanan karyawan, beberapa
keluhan karyawan tentang manajemen yang mendorong
mereka untuk selalu menjadi sempurna. Itulah sebabnya
mereka membuat Starbucks Serikat Pekerja
Analisis Eksternal Starbucks Coffee

1. Opportunity

 Para karyawan potensial adalah orang-orang berpendidikan

yang membuatny lebih mudah untuk melatih mereka
 Pelanggan bukan harga sensitive
 Bisa dapat mengubah citra negative kopi mejadi positif
 Konsumerisme tinggi di Indonesia
 Lebih mudah untuk menembus pasar karena apa yang
dijualnya adalah pemenuhan harga diri atau milik
masyarakat yang merupakan alasan utama mengapa
masyarakat membeli suatu produk
 Dukungan financial yang kuat
 Tingginya tingkat pertumbuhan ekonomi dan pasar di
Indonesia, terutama perkotaan
 Kebijakan ekonomi kerakyatan di Indonesia memudahkan
starbucks memperluas bisnis mereka
 Masyarakat di Indonesia adalah posisi tempat starbucks
sebagai salah satu titik pertemuan terbaik
 Produk mereka yang beragam dan tidak hanya di kopi
 Banyak kopi starbucks menggunakan kacang organic
 Beberapa biji starbucks dipanen di pulau Sumatera dan
Sulawesi. Starbucks membeli kacang berkualitas tinggi
dipulau ini karena untuk membantu para petani menghidupi
keluarganya dan berinvestasi secara berkelanjutan.
2. Threat

 Krisis keuangan global yang membuat masyarakat

cenderung untuk tidak menghabiskan terlalu banyak uang
 Pendapatan rendah di Indonesia membuat sulit bagi
Starbucks untuk menembus pasar yang lebih segmentasi
 Sentimental masalah dengan efek buruk kopi dari
masyarakat
 Beberapa orang percaya bahwa starbucks mengubah dunia
menjadi sebuah perusahaan raksasa genetic berantakan
 Kritik mengatakan bahwa ia mengeksploitasi buruh tani di
negara-negara
 Isu menyatakan bahwa starbucks mengeksploitasi pekerja
mereka dengan membayar upah yang sangat minimum
dengan standar yang sangat tinggi
 Ancaman produk pengganti termasuk barang-barang
minuman lain seperti cola, teh atau jus yang dijual diritel

2.

Secret No. 1: Start small and expand carefully.

Starbucks was founded in Seattle in 1971 and it initially sold roasted coffee beans
only. Howard Schultz bought the company in 1987 when it had only six stores. It
took nearly three decades for Starbucks to reach its current status as the largest
firm in its business. Lesson: start small and grow gradually and carefully.

Secret No. 2: Leadership: Corporate and Strategic. Sustained leadership by

Schultz is central to Starbucks. Starbucks’ strategy for success (conceived by
Schultz of course) is to offer customers the “Starbucks experience”, which means
superior customer service, a ‘community experience’ (based on the Italian café
model), a friendly ambience in its stores and, it empowers customers to drive
change (especially in terms of customization, peer-to-peer marketing and consumer
awareness). Moreover, Starbucks seeks brand loyalty and offers perks to frequent
customers.

Secret No. 3: The Overall Business Model, Efficiency and Culture. First, the
overall business model has to be sensitive to different cultural settings. The North
American “Starbucks Experience” (very big on customer service) is not the same
as in Asia and elsewhere (where “the prestige or status factor” is critical to the
“Starbucks experience”). In many countries people frequent Starbucks for the
“prestige” or “high status” associated with the Starbucks brand. For the young,
working class and students this means you are “cool” and “a cut above the rest” if
you frequent Starbucks. The only exception is Europe, which has its own cultural
preferences (e.g. organic coffee and local brands). Second, efficiency is important,
both for the firm and the customer. To promote efficiency, speed-up service,
contribute to higher profits and interface with customers here are five examples of
how it complements the “Starbucks experience”: (i) through the use of automatic
espresso machines (for fast and efficient service, though this is more of a North
American, Asian and African preference); (ii) it offers prepaid Starbucks cards or
“apps” (that cut transaction times in half); (iii) customers can also pre-order and
pre-pay for beverages and food/pastries via phone or on the Starbucks Express web
site; (iv) it offers free high-speed wireless internet service; and (v) Starbucks also
offers custom-made drinks (part of its “Secret Menu”). Finally, the overall business
model “dovetails” into Starbucks’ marketing to different cultural settings.

Secret No. 4: The Customer is King. This goes beyond “the customer is always
right” philosophy in three fundamental ways: (i) If the customer is not happy with
the product or service, set things right by remaking the drink or offer a (free) food
or drink item of the customer’s choice; (ii) or offer a credit to be used towards the
customer’s next visit; and (iii) offer perks to loyal customers (Gold Card holders),
such as specials, discounts and rewards. (Postscript, April 12, 2016. Having said
this, Starbucks is a partner centric organization, and customer centricity
comes in second. Partners (employees) and external partners are central to
Starbucks' organizational culture, business model and strategy. More on this
in a future article.)

Secret No. 5: Partners are the driving force in Starbucks' culture and business
model. Baristas, supervisors and managers (as well as those higher up, such as
regional directors) are referred to as “Starbucks partners” (in other words, they’re
more than “just” employees). Benefits extended to partners include stock options,
health insurance and educational programs. In addition, on top of the periodic staff
meetings held by the store manager, a special meeting (brainstorming and 'pep
talk') is held, perhaps once a year, to help staff at the store level deal with issues
such as stress. A very positive approach to dealing with partners.

Secret No. 6: Offer standardized Training. New employees receive training in

the classroom and in the store(s). The training is extended to all new partners
(baristas, supervisors, managers and regional directors).

Secret No. 7: Friendly ambience. In addition to friendly service, stores are

designed to exude a friendly ambience and community spirit (as in the Italian café
model noted above that was the initial inspiration for Schultz when he launched
Starbucks decades ago).

Secret No. 8: Innovate and Forge Partnerships. First, in terms of the product-
mix, variety, or new offerings, innovation and forging institutional partnerships is
important. For example, the “flat white” (a version of the latte) was recently
introduced and beer and/or wine may soon be made available where permitted.
Second, the “Starbucks experience” can also be enhanced through complementary
initiatives, innovation, marketing and forging partnerships. Currently, Starbucks is
partnering with Spotify to stream music in its stores beginning this fall (or winter
of 2015-16).

Secret No. 9: Source Your Own Products Where Feasible. Starbucks’ supply
chain includes numerous products that they manufacture or process (and own),
under various brand names. This has the added advantage of facilitating the
marketing of its products at the store level and through secondary outlets.

Secret No. 10: Marketing and Brand Name Recognition and Diversification.
Starbucks uses various marketing tools, including newspaper advertising, direct
mail (for coupon distribution), and endorsement by celebrities (e.g. Oprah for its
teas) and brand name diversification (e.g. Tazo, Seattle’s Best Coffee, Evolution
Fresh, La Boulange, and Teavana.). Importantly, marketing is innately a part of
Starbucks’ global success. Secret No. 3 is dependent on marketing in its overall
business model and the cultural dimensions of marketing its products and services.
Secret No. 8 is integral to its marketing as well. And Secret No. 9 uses marketing
as indispensable at the store level especially.

Beyond these “secrets” of Starbucks’ success, there are two economic perspectives
I’d like to share with you. The first is that if you believe that humans are rational
beings, then you might say that that there is a rational trade-off: customers will
overlook the weaknesses of Starbucks to enjoy the overall “Starbucks experience”.
Behavioral economists will instead say that humans are not always rational in their
behavior; in other words, we are almost always ‘irrational’ (or ‘misbehave’ to use
Richard Thaler’s expression) and therefore we also miscalculate in our decision-
making. Our behavior in showing extreme loyalty to Starbucks (in the face of
arguably overpriced and mediocre quality of its products) is exemplary of such
irrationality and misbehavior, at least from the behavioral economic perspective.
And indeed marketing has a critical role to play in leveraging this “weakness” in
human behavior.

Having said this, it’s hard to “bad mouth”, discount or reject a proven, tested and
highly successful business model, strategy, and approach to marketing. Instead, we
should applaud the stellar record and success of Starbucks and learn from it. No
wonder a lot of business schools use Starbucks as a case study and some
competitors are attempting to emulate the ‘Starbucks experience’, its overall
business model, and marketing approach and related insights!

ips strategi pemasaran bisnis Starbucks Coffee yang dapat kita contoh
antara lain:

1. Mengutamakan kualitas produk

Starbucks sangat menekankan pada kualitas produk. Kopi mereka meskipun relatif
lebih mahal dibanding produk sejenis, namun kopi mereka sangatlah memuaskan
konsumen dengan rasa dan aroma yang kaya dan lezat.

2. Memposisikan dirinya sebagai rumah ketiga

Sejak awal, Starbucks berfokus untuk menciptakan “rumah ketiga” bagi semua
orang yang berpergian dari rumah dan tempat kerja. Starbucks bukan sekedar
tempat untuk membeli secangkir kopi, melainkan sebuah tempat berkumpul untuk
bersosialisasi dan berdiskusi, terutama bagi para pelajar dan para profesional
muda. Pengalaman dan atmosfer yang unik dan menenangkan ini menjadi konsep
yang sangat kuat bagi perusahaan ini, sehingga konsumen merasa sangat tertarik
dengan Starbucks.

Baca juga: Cara Meningkatkan Penjualan Toko Online Anda Dalam Sekejap

3. Kepuasan pelanggan
Kepuasan pelanggan menjadi sesuatu yang sangat penting untuk Starbucks. Dari
pintu masuk ke dalam kedai kopinya hingga tetes kopi terakhir, konsumen harus
bisa merasakan keunikan dalam pengalaman mencicipi kopi Starbucks.

4. Membuat komunitas Starbucks

Di websitenya, setiap orang bisa menceritakan pengalamannya akan kopi

Starbucks, dan perusahaan ini juga secara personal bergabung dalam diskusi
tersebut. Dengan cara ini, customer experience terhadap Starbucks akan
meningkat.

5. Inovasi

Dari tahun ke tahun, Starbucks dikenal akan ide kreatif dan inovatifnya dalam
menambahkan pilihan produk atau jasa. Mereka menambahkan rasa yang berbeda
pada kopi mereka, menambahkan menu makanan, dan juga menjadi salah satu
yang pertama dalam menyediakan fasilitas internet di toko mereka.

6. Brand marketing

Starbucks tidak pernah memasang iklannya di papan billboard, koran, ataupun

poster, melainkan dia memfokuskan pada pemasaran word of mouth dan
membiarkan kualitas produk dan jasanya yang berbicara sendiri.

7. Pemilihan lokasi

Dalam memilih lokasi, Starbucks bukannya memilih berdasarkan demografis, lalu

lintas, lokasi kompetitor, ataupun luas tokonya, akan tetapi Starbucks meng-
cluster-kan toko-tokonya di area-area tertentu, sehingga membuatnya sangat
mudah ditemui di jalanan-jalanan kota. Sedangkan mindset strategi pemasaran
tradisional justru menentang penempatan toko yang berdekatan karena dapat
memotong penjualan dari outlet-outlet yang ada.
Akan tetapi, ternyata dengan cara ini, Starbuck mampu meningkatkan
pendapatannya dan pangsa pasarnya. Dengan cara menyelimuti area tertentu
dengan kedai-kedai kopinya, Starbucks mampu mendominasi pasar dengan cepat.
Strategi ini juga membuat biaya pengiriman persediaan menjadi lebih murah dan
lebih mudah untuk pengaturannya. Besar perusahaan ini juga mampu menyerap
segala kerugian yang disebabkan oleh kanibalisasi pada saat outlet yang baru
dibuka.

Every business needs to carry out a successful marketing strategy in order

to be noticed by consumers
and to forge brand identity. Throughout this section, Starbucks' marketing
strategy will be described
using the core marketing strategy concept, identifying the positioning and
marketing mix, and analysing
the environment in which it operates. Strategic marketing will further be
used in complement with tools
such as the Ansoff and BCG Matrix.
CORE MARKETING STRATEGY
A core marketing strategy analysis looks at segmentation, targeting,
positioning, and differentiation.
This type of analysis allows the company to understand the type of service
they want to provide, which
product type they are selling and to whom

I’ve cherry-picked a few of the things that I think Starbucks’ marketing does very,
very well.

Getting personal with customers

If you’ve been to a Starbucks recently and ordered a drink, you’ll know the staff
always ask your name – which they write on your cup. When this initiative was
launched in the UK in March 2012, there was a bit of a backlash at first because it
was seen as too American and not very British. It did make me laugh that
customers gave names ranging from “Tax Dodger” to “Ivor Biggun” though!

Once all the fun died down, a lot of regular customers actually loved the fact that
the staff at their local Starbucks remembered their names. And you only have to do
a quick Google search to see how many customers have shared pictures of their
cups on social media.

Adding value
In my role, I’m on the road a lot, attending meetings and appointments. If I have
time between them, I’ll always make a beeline for a Starbucks because I know I
can access the free WiFi. This allows me to have a coffee, and maybe a cheeky
cake, whilst cracking on with work. That little bit of extra value beyond the fare of
coffees and cakes keeps me going back again and again.

Clusters of coffee shops

I didn’t realise this until I researched it, but part of Starbucks’ marketing strategy is
to hit a new territory hard and open a few coffee shops there – often in very
relatively close proximity to one another.

This is very clever, because it creates the impression in consumers’ minds that
“they’re everywhere”, and this omnipresence often both compels consumers to use
the stores, and validates the decision because they’re so accessible.

Great word of mouth

Word-of-mouth recommendations are a cornerstone of Starbucks’ marketing
strategy, particularly when new stores are launched. I was flabbergasted to read
that the marketing budget can be as little as 1% of Starbucks’ spend on advertising
– which goes against the conventional wisdom of a figure much closer to 10%.

As a joined-up strategy, clearly points one and two play a key part in this as part of
a process of building up a customer base of loyal fans.

Great offers
The words ‘Starbucks’ and ‘offers’ aren’t words you’d typically associate with one
another. However, when the stores do them, they do them very well indeed.

The offers are usually focused around new products and done in a very engaging
but understated way, which often makes a customer feel like they’re in on
something that not everyone else knows about. And, let’s face it, all of us
consumers feel like we’re “in the know” by taking advantage of promotions.Take a
look at these great examples of the way Starbucks runs promotions.

Starbucks has proved that it can build a global empire using these marketing
strategies, and any business of any size can learn from these great pointers.

Starbucks: Reasons for Success

Starbucks is the world’s leading speciality coffee retailer, producing and selling a
wide variety of beverages, as well as pastries and confections, through some 8,400
coffee shops throughout 30 countries around the world (Berlind, 1998). Starbucks
also sells its beans to airlines, restaurants, businesses and hotels; manufactures
coffee-related equipment and accessories, and produces a line of premium teas and
a line of compact discs through its mainly company-operated retail stores.

According to O’Donovan (2004) in the four years since going public, the chain of
coffee bars has become wildly successful by turning one of the world’s most
pedestrian beverages into a premium product, wrapped in a carefully cultivated,
widely recognized brand name that extends far beyond what’s in the cup. It is a
brand that’s defined as much by attitude as it is by products. The Starbucks
“experience” is about more than a daily espresso infusion; it is about immersion in
a politically correct, cultured refuge from everyday hassles.
From inconspicuous beginnings as a one-store outfit in a marketplace 33 years ago,
Starbucks has grown to become one of the most talked about brands in recent
times. What really lit a fuse under Starbucks was not just its commitment to better
beans but its move into retail – selling coffee by the cup. The stores were decorated
with bins of coffee beans, photos of coffee trees, and shelves of gleaming coffee
paraphernalia. Employees were trained to educate customers about what they were
drinking and why it tasted good. For many, the experience was so engaging that
Starbucks became a natural gathering place, and that made the brand familiar.

The Company’s formula for success is mainly based on the following:

 Employees’ Approach: The key retail success of the Starbucks brand is

determined by people’s interaction with the Company’s experience, and the
culture and values of how they relate to customers. By investing and creating
a unique relationship with the staff and getting them to understand that first
of all is the primary target to exceed the expectations of the employees and
then of the customers. People at Starbucks are never viewed as commodities,
but as business partners.
 Core Competence and Visions: The Company’s primarily role or
responsibility is to ensure that the organisational culture is compatible with
the kind of people that they want to attract and retain. Starbucks tries to
create a sense of belonging and build a sense of trust and confidence in what
the Company stands for with the employees and customers. The reason that
their customers come back is the quality of the coffee and the quality of the
experience, and the experience comes to life because of the employees.
Starbucks believes in a good, competitive business strategy that is facilitated
by a devout passion for the product. A good leadership and management
approach of the Company has created a great success of the brand with a
clear vision of core competence. The Company’s motivation to develop the
most recognisable brand was also based on the good planning and
positioning strategy.
 Experimentation and Innovation – Starbucks is a disciplined innovator,
and good management of its innovation timeline is one of the primary
reasons behind the Company’s success in generating consistently high levels
of same store sales. Customers can try and taste various coffee brands in the
store. The Company’s ability to roll out new initiatives and products
relatively quickly is a considerable competitive strength. Customers are also
increasingly drawn to the Starbucks’ music compilations, produced for the
company by Hear Music. By the end of 2005, Starbucks plans to open hi-
tech cafés offering custom music CDs – in addition to the high-speed
 Internet access (Ruggless,1997; Vishwanath and Harding, 2000; Donation,
2003).
 Promotional Patience – In a break from the norm, Starbucks has decided to
shun what would be regarded as traditional marketing strategies. By relying
on cafés to market themselves, there is the inevitable heavy dependence on a
strong brand and word-of-mouth to spread a positive reputation. Sutter
(2003) also suggests that powerful marketing principles of the effective
positioning of the Starbucks environment creates an experience that invites
people to study, to hang out and to read.
 Promoting Ethics – Sound corporate governance is commanding much of
the spotlight for today’s businesses. The management levels of the Company
are responsible for ensuring Starbucks promotes equality and fairness in all
of its business dealings – whilst still sustaining its growth plans
(Kurlantzick, 2003; Dann, 2004). The Company is very much concerned
about ethical business practices and tries to get involved in charity events
and corporate social responsibility.
 Command of a Premium Brand – Hayes (1999) states that consumers are
willing to pay higher prices for Starbucks’ coffee as they are not only buying
a beverage, but also making a social statement at the same time. Consumers
are buying an experience, a lifestyle and an attitude. Whilst these intangibles
can be extremely difficult to measure, Starbucks’ customers are making the
job easier by swarming in their thousands.
 Measured Expansion – Whilst McDonald’s is famed for its ultra-fast
location assessment and business set-up process, Starbucks has adopted a
slightly more cautious approach, particularly in its foreign markets. In
China, outlets have increased steadily from 8 in 1999 to just under 70 in
2004. The Company is entering into new markets due to emerging
opportunities and their global established name.
 Financial Resources: Starbucks is the world’s number one specialty coffee
retailer, and as such it has a greater financial reach than practically all of its
competitors. Huge financial resources enable the company to take advantage
of market opportunities, investments and expansion activities that are not
available to smaller firms with a reduced capital.

For the brands that have managed to achieve worldwide fame and recognition,
their prosperity has sewn them into popular culture and helped fashion them into
icons of their time. Whether they are loved or hated, their influence remains
undeniable.
Having established itself as a global force, many analysts are asking whether
Starbucks can continue to go from strength to strength. Sustained success will
require sharp focus on a set of key challenges, including innovation and
experimentation. In order to achieve a competitive advantage, the Company
continues to rapidly expand its retail operations and pursue opportunities to
leverage the Starbucks brand through the introduction of new products and the
development of new distribution channels.

Nowadays, Starbucks still retains its worldwide position, recognised as one of the
most successful globalized companies that has created a strong brand and
international experience.

Having established itself as a global force, many analysts are asking whether
Starbucks can continue to go from strength to strength. Sustained success will
require sharp focus on a set of key challenges, including innovation and
experimentation. In order to achieve a competitive advantage, the company
continues to rapidly expand its retail operations and pursue opportunities to
leverage the Starbucks brand through the introduction of new products and the
development of new distribution channels.

Nowadays Starbucks still retains its worldwide position recognised as one of the
most successful globalized company that has created a strong brand and
international experience.

References
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108 Issue 28, pp.12.

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4, May, pp.66-67.

Davis, S. (2002) Brand Asset Management: how businesses can profit from the
power of brand. Journal of Consumer Marketing, Vol. 19 Issue 4, pp.351-358.
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Hayes, J. (1999) Starbucks’ diverse product mix and new cafe concept create new
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November, pp.86-92.

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49, November, pp.12-13.

O’Donovan, D. (2004) It’s all in the blend. Employee Benefits, February, pp.36-
39.

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systems, Nation’s Restaurant News, Vol. 31 Issue 15, 04/14/97, p.52.

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Review, Vol. 78 Issue 2, Mar/Apr, p.17.

Welles E. (2001) The Next Starbucks. Inc., Vol. 23 Issue 1,January, pp.48-52.

Critical success factors (CSF) can be explained as “an element of the

organisational activity which is central to its future success” (Botten, 2009, p.20).
The following table presents explanation of Starbucks Critical Success Factors in
the UK market:
CSF Explanation
Quality of products Increasing level of competition in the market is
fuelling the level of customer expectations
regarding the quality in general, and freshness in
particular
Customer services Excellent customer services are being adopted as an
important source of competitive edge by increasing
numbers of coffee shops
Shop design Coffee shops in the UK are being positioned as a
‘third place’, where people can spend most of their
time apart from workplace and home (Dolan,
2012).Accordingly, relevant atmosphere needs to
be developed with the interior, music and design.
Social responsibility The impact of corporate social responsibility on
profitability has increased significantly in the past
several years. Accordingly, the level of engagement
in fair trade, recycling policies, carbon emission
policies, and employee treatment can be specified
as important success factors for branded coffee
shops like Starbucks
Customer loyalty reward In catering industry consumer behaviour is greatly
programs impacted by the level of attractiveness of loyalty
programs that offer discounts and other advantages
to loyal customers

Starbucks Corporation Report uploaded on April 2017 contains the application of

the major analytical strategic frameworks in business studies such as SWOT,
PESTEL, Porter’s Five Forces, Value Chain analysis and McKinsey 7S Model on
Starbucks. Moreover, the report contains analyses of Starbucks’s business
strategy, leadership and organizational structure and its marketing strategy. The
report also discusses the issues of corporate social responsibility.

Here is how I believe they have been so successful:

Market segmentation

The company has stayed with the upper-scale of the coffee market, competing on
comfort rather than convenience, which are the case with its closest competitors,
McDonald's and Dunkin Donuts.
Execution

They continue to focus on its original product bundle that includes good coffee,
quality service, and a nice environment to hang around. They keep their attention
on paying attention to the details of great execution and service.

Social Media

One of the earliest adopters of the use of social media for marketing and social
commerce, Starbucks has certainly taken a leadership position. Their social media
strategy is built around their company web site and 6 additional social platforms,
including Twitter, Facebook, Pinterest, G+, YouTube, and My Starbucks Ideas.
We will review Starbuck's social media strategy in detail below.

See this article on the secrets to a winning social media marketing strategy.

Adaptation and Innovation

Starbuck's business crowdsourcing, via it’s My Starbucks Idea website, has been a
huge success. Why you may ask? Because they have combined the concepts of
change, experimentation, social media, customer engagement, and market research
and made the results key components of both their brand as well as their marketing
strategy. Have you given My Starbucks Idea a try? What did you think?

Starbucks has clearly embraced the digital realm. With a strong presence on
multiple social networks, the brand has set a high bar when it comes to being social
and engaging its customers.

They are at or near the top of nearly every major brand ranking in social media.

Starbucks' ability to wear so many hats corporate success, "local" favorite, and
Internet sensation warrants strategic examination.

Why is Starbucks such a social media marketing success story? There are seven
key reasons their social media strategy is a successful difference maker for their
marketing campaign:

Here is my take on why:

Customer relationships
Instead of solely focusing efforts on accumulating new customers, it cultivates its
current relationships. This ensures more fans/followers in the long run, as well as
the continued existence of brand advocates. This holds true across the board: In-
store experiences are highly valued, along with online

engagement, emphasizing the importance of customer service.

Going to its customers

When Starbucks takes a photo, it shares it on Instagram, posts it to Facebook,

tweets it on Twitter, and pins it on Pinterest. It clearly goes to where all its
customers like to hang out. Cross- promotion is more valuable as the world
becomes more digitally focused.

Each network provides an opportunity to reach a new audience, and integrating

your strategy on each is crucial to increasing visibility and promoting the brand.

Customer engagement

They believe in letting customer engagement and conversation occur as naturally

as possible. They listen carefully, observe, and apply new ideas from what they
learn.

My Starbucks Ideas

The My Starbucks Idea website, where Starbucks does its business crowdsourcing,
has been actively engaging customers for over 6 years now. It encourages
customers to submit ideas for better products, improving the customer experience,
and defining new community involvement, among other categories. Clearly,
Starbucks has seen and believes what Peter Drucker has to say about business
adaptability.

More on this subject: My Starbucks Idea ... How Starbucks Used for Business
Crowdsourcing

Customers can submit, view, and discuss submitted ideas along with employees
from various Starbucks departments. The company regularly

polls its customers for their favorite products and has a leaderboard to track which
customers are the most active in submitting ideas, comments, and poll
participation.
The site is at once a crowdsourcing tool, a market research method that brings
customer priorities to light, an on- line community, and an effective internet
marketing tool.

Starbucks reflects a mission

Its mission is "to inspire and nurture the human spirit" one person, one cup, and
one neighborhood at a time." They believe lifting customers up will lead to more
customer loyalty.

Mike Schoultz is the founder of Digital Spark Marketing, a digital marketing and
customer service agency. With 40 years of business experience, he writes about
topics that relate to improving the performance of business. Go to Amazon to
obtain a copy of his latest book, Exploring New Age Marketing. It focuses on using
the best examples to teach new age marketing … lots to learn. Find them on G+,
Twitter, and LinkedIn

Which factors accounted for Starbucks’ success:

Newness
–
was not something that existed

Created the specialty coffee category

Strong 3 part value proposition: superior product, superior service, i.e. customerintimacy and
atmosphere.

Starbucks was inviting to customers, and was offering a high quality beverage and
anexperience that commanded a price premium

Idea of customization
–
matching a drink to your personality

Creating a third place

–
a different environment where people could hang out

Starbucks reached people wherever they work, dine, shop, play

Elite customers who had time to linger and were not in a rush

Presence

Sophisticated, premium, customized specialty coffee

Louis Vuitton of coffee

2.

Customer service scores may have declined because:

Product combinations are complex

Starbucks has not been hiring people in the last several years

Customers likely feel that there is slow service and

If service isn’t declining at the moment, it certainly was over the last few years
3 minute standard w
as a key component in “excellent service” and Starbucks had not
met that for quite some time3.

No differentiation from it and other stores other than ubiquitous presence and
convenienceImage is one of being profit driven rather than customer drivenStarting to be
known for having lots of stores than for the quality of product sold in those storesas
well as the customer experience in each of those stores-Customer base has changed
–
more price conscious customers and slightly younger-Product portfolio has
changed
–
more automation, more product choices-differentiation vs other brands has been
damaged-well recognized but much less respected
–
more like a commodity, has lost the premium feel-market share has increased
substantially-presence4.

Ideal customer-affluent-well educated-urban-white collar-female 25-44-loyal-someone

who visits often and orders a high ticket item-21% of customer base leads to 62%
of sales transactions-affluent and ready to pay