Starbucks Business Case Study

by: Nihat Canak

Index of contents

1 What is Starbucks’ product?  1

2 What changes in society have helped Starbucks be successful?  1

3 What strategic factors account for Starbucks’ success in developing brand equity?  2

4 What opportunities and threats face Starbucks?  3

5 What are the advantages of the Starbucks Card to the company and to customers?  4

6 What should Starbucks do to continue growing its revenues and earnings?  4

7 Evaluate Starbucks’ mission statement and guiding principles. What do they suggest about the company?  5

Bibliography 6

1 What is Starbucks’ product?

Starbucks purchases and roasts high-quality whole bean coffees and sells them, along with fresh, rich-brewed coffees, Italian-style espresso beverages, cold blended beverages, a variety of complementary food items, coffee-related accessories and equipment, a selection of premium teas and a line of compact discs, primarily through company-operated retail stores. Starbucks also sells coffee and tea products and licenses its trademark through other channels and the company produces and sells bottled Frappuccino coffee drinks and Starbucks DoubleShot espresso drink and a line of ice creams.

Concluding, Starbucks is able to sell in some respects emotions and experiences. This is basically what every marketing try to realize and to measure. By providing a unique atmosphere, the customers enjoy the time they spend in the stores. The interior design and the smell of coffee are the most important aspects that support the company’s storeconcept.

2 What changes in society have helped Starbucks be successful?

There are several changes in society that helped Starbucks getting succesful. In my opinion, the most important change of the last two, three decades (time of operation of Starbucks) is the change of economics. Starbucks strategy comprises to locate its stores at special places such as urban areas, the first floor of blocks of offices, and entrances of the underground. These places, of course, get the more crowded the better the economic situation is.

In addition, the development of information technology and related media is another aspect. On the one hand, it helps the company to reach new customers and on the other hand the company encompasses multiple music and technology based initiatives designed to appeal to new and existing Starbucks customers. Among these initiatives are strategic marketing and co-branding arrangements, such as the 24-hour Starbucks Hear Music TM digital music channel 75 available to all Satellite Radio subscribers, and the availability of wireless broadband Internet service in company-operated retail stores located in the United States and Canada. Additionally, the entertainment business includes Starbucks Hear Music′s innovative partnerships with other music labels for the production, marketing and distribution of both exclusive and nonexclusive music, music programming for Starbucks stores worldwide, and CD sales through the company′s website.

Furthermore, a more abstract change is the way of life in the “modern world”. People are more often outside having their day by day issues. Because of this hecticness a “to go coffee” seems to be beneficial for busy people.

3 What strategic factors account for Starbucks’ success in developing brand equity?

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