Scribd
Upload
89 views2 pages

Case Analysis HowellT - Aragon BSHM3C

Starbucks has dominated the retail coffee and snacks store industry in the US, holding a 36.7% market share. However, the industry experienced a slowdown in 2009 due to economic crisis and changing tastes. While the industry is now forecasted to grow again, Starbucks faces challenges from competitors copying its strategies. The document recommends Starbucks focus on emerging international markets like Brazil, India, China, South Africa and Mexico where growth opportunities remain, allowing local management flexibility to tailor offerings to each market while transferring core competencies globally.

Uploaded by

howell
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOC, PDF, TXT or read online on Scribd
89 views2 pages

Case Analysis HowellT - Aragon BSHM3C

Starbucks has dominated the retail coffee and snacks store industry in the US, holding a 36.7% market share. However, the industry experienced a slowdown in 2009 due to economic crisis and changing tastes. While the industry is now forecasted to grow again, Starbucks faces challenges from competitors copying its strategies. The document recommends Starbucks focus on emerging international markets like Brazil, India, China, South Africa and Mexico where growth opportunities remain, allowing local management flexibility to tailor offerings to each market while transferring core competencies globally.

Uploaded by

howell
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOC, PDF, TXT or read online on Scribd
You are on page 1/ 2

Howell T.

Aragon
BSHM 3-C

HOW STARBUCKS BECAME AN $80B BUSINESS

I. Overview
Starbucks primarily operates and competes in the retail coffee and snacks
store industry. This industry experienced a major slowdown in 2009 due to the
economic crisis and changing consumer tastes, with the industry revenue in the
US declining 6.6% to $25.9 billion. Before this, the industry had a decade of
growth consistent. Due to the economic slump, consumers spent less on luxuries
like eating out, choosing to purchase low-price items instead of high-priced coffee
drinks due to shrinking budgets.3 The industry grew at a low annualized average
growth rate of 0.9% from 2008 till 2013 with current industry revenues at $29
billion in the US. The industry is now forecasted to grow at an annualized rate of
3.9% over the next five years, with a potential to reach $35.1 billion revenues in
the US. This growth would be mainly driven by an improving economy, increase
in consumer confidence and expanding menu offerings within the industry.
Starbucks dominates the industry with a market share of 36.7%, Dunkin Brands
with 24.6% and other competitors like McDonalds, Costa Coffee, Tim Horton’s
etc. taking the rest as shown in Appendix 1.

II. Challenges
Starbucks are the most successful business but there are some
challenges on their business like the weaknesses and challenges. The grow
business that can copy their strategy and some company that willing to fight
to Starbucks

III. Alternative Solution


In the strategic management of Starbucks Coffee Company, it is crucial
to account for the effects of external factors on the multinational business.
This Porter’s Five Forces analysis of the coffeehouse chain highlights some of
the most notable factors that the company’s strategies must consider. These
strategies are focused on ensuring competitive advantage while fulfilling
Starbucks’s corporate mission and vision statements. Starbucks faces the
strong force of competitive rivalry or competition in the food service and
coffeehouse industries. In the Five Forces analysis model, this force pertains
to the influence of competitors on each other and the industry environment.
Evaluation of Alternative
Starbucks may be required to lower the price of their coffee to be
close to hat of competitors. Starbucks have lost many customers due to
increase of the coffee prices. Although they claim that their coffee quality is
worth paying for the high prices, their prices are too much high. Reviewing
the pricing policy may help the company solve some of the existing problems

IV. Recommendation/s
My recommendation Starbucks biggest growth is in its international segment. The
emerging markets of Brazil, India, China, South Africa and Mexico with a
growing middle-class population continue to offer significant opportunities to add
new stores and serve more customers. Starbucks has already made significant
inroads into the Chinese market but there still is a lot of untapped potential growth
in these markets. Starbucks should grow in these emerging markets by winning
locally Starbucks must remain relevant to the customer in order to grow in these
markets, and its management teams should have the freedom to operate within
their overall framework to tailor store format, introduce local product mix and
price points to the needs, lifestyles and tastes of each individual
market/community.  Under Starbucks international strategy, it should transfer its
core competencies and capabilities country to country and then gradually build
profit drivers in several countries as it continues its global expansion in an organic
way.

V. References
https://www.youtube.com/watch?v=XUBeH7VQaFY
http://panmore.com/starbucks-coffee-five-forces-analysis-porters-model

You might also like