Continued Thirst for Innovation

Continued Thirst for Innovation

  • Submitted By: imranaziz
  • Date Submitted: 12/01/2008 2:49 PM
  • Category: Business
  • Words: 3161
  • Page: 13
  • Views: 2

Starbucks has exhibited a continued thirst for innovation, and its attempt to bring a more premium offering to the drive-through concept appears to paying off: its drive-through locations reported sales that were on average 40% higher than walk-in stores.

¬ Starbucks boasts of its state-of-the-art recycling plants to convert hot cups in the US company-operated retail stores by the end of the calendar 2005.

¬ The company recorded revenues of $ 5294 million during the fiscal year ended September 2004, an increase of 29.9% over 2003. For the fiscal year 2004, revenues from the US, the company's largest geographical market, accounted for 84.8% of the total revenues.

Starbucks has to pursue its vision of opening 25,000 stores. As a first step for this they need to achieve their mission of 10,000 stores by year 2008. They currently have around 8,500 stores worldwide. Since, U.S market adds to almost 85% of their profits, it is advisable that Starbucks should open more stores in outside US, thus UAE would be a good place to start. Starbucks already has 30 stores in UAE and their expansion plan includes increasing it to 50 stores. That means they need to increase 17 more outlets in UAE alone.

With continued growth of the cafe business, the company has looked to expand its business, including those areas where it has an established presence. Working on the basis that a key driver of business is the convenience of the company's outlet location, Starbucks has targeted clustering its units so as to dominate particular areas. The financial reward derived from this practice has been found to be considerable, as new outlets have not been found to eat into the business of existing outlets. A continued strategy of unit clustering, and a focus on stores that have convenient access for pedestrians and drivers, represents further opportunity for Starbucks to capture an increasing share of the coffee market.

They could also implement the new drive-through theory...

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