Starbuck's, the #1 specialty coffee retailer in the world, is everywhere. They are
currently located in more than 35 countries, with more than 16,000 individual coffee
shops. As the saying goes, "Wake up and smell the coffee". Recent changes to the
business includes breakfast and lunch foods as well as kitchen oriented coffee goods.
Starbuck's is also thinking green. New stores and renovations will employ local workers
and use materials that are reused and recycled. The intent is to have all new stores LEED
certified (Leadership in Energy and Environmental Design) starting in 2010. These will
serve to make the company more competitive and profitable while at the same time
saving our planet for future generations (SBUX 2009).
The company is facing a real threat of substitution from other companies in the domestic and
international market especially Europe and the Middle East. They face competition due to its
uncompetitive price all over the world. Suppliers bargaining power represent a problem because
they will not deal with suppliers that don’t follow the same environmental ethics and dealing
with small suppliers does not give them a good deal for facilities and prices.
Starbucks has faced criticism from non-governmental organization that urges the company to
acquire certified coffee beans, ensuring that those coffee beans were grown and marketed under
certain economic condition (SAS 2008).
Business Model (U.S.)
Howard Schultz’s goal was to establish Starbucks as the premier purveyor of the finest coffee
in the world. While maintaining uncompromising principles as they grew. The strategy is to
blanket an area completely, even if the stores cannibalize one another’s business. A new store
will often capture about 30% of the sales of a nearby Starbucks, but the company considered that
a good thing. The Starbucks everywhere approach cuts down on delivery and...