I need help with International business

Starbucks strategic analysis: Outline

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1. Background information

This is section provides a brief background information of Starbucks Corporation.

Starbucks Inc. is an American firm incorporated in 1971 in Seattle, WA. Starbucks is a premier roaster, marketer and retailer of special coffee across the world.

Starbucks has over 28,000 locations in 78 countries worldwide, bringing in over $22 billion in revenue in 2017.

Starbucks operates in the retail coffee and snacks industry. It has significantly dominated the coffee industry. As at 2019, Starbucks claimed the highest market share with 40 percent in the United States (Geereddy, 2013). There are a number of strategic factors that the company leverages to remain competitive such as product differentiation to offer a premium product mix of high quality beverages and snacks.

The proposed final paper seeks to perform a critical strategic analysis of Starbucks Corporation.

2. Brand strategy

Starbucks places more focus on creating a person connection between customers and the company.

Branding has been an important element of Starbucks strategy over many years.

The company has significantly invested in creating a standardized look and feel of its stores, drinks and merchandise.

The brand strategy focuses in detail on the experience the store creates, which is the cornerstone of the philosophy and values of Starbucks (Hess, 2017).

3. Internal analysis of Starbucks core competencies

3.1. Product differentiation

The success of Starbucks can be better analyzed by looking at its core internal competencies behind its success.

The core competence by Starbucks Inc. is its ability to leverage product differentiation strategy to offer high quality beverages and snacks (Geereddy, 2013).

Starbucks has built its brand around offering the finest quality coffee and snacks, which has attracted a large customer base and customer loyalty.

Other core internal competencies that paper will focus include human resource management and technology integration into its operations.

3.2. Starbucks SWOT analysis

A SWOT analysis of Starbucks offers significant insights regarding its position in the coffee and snacks industry.

Strengths

· Starbucks has a strong market position and global brand recognition.

· High quality products

· Strategic location and aesthetic appeal of its stores

· Customer base loyalty

· Technology integration and mobile outlets

Weaknesses

· Expensive products, pushing customers to switch to competitor’s products with lower prices

· Overdependence in the U.S market

· Negative large corporation image

Opportunities

· Room for expansion to new locations

· Technology advances

· Expanding product mix and offerings

· Establishing new distribution channels

Threats

· Increased competition

· Economic disruption by COVID-19

· Price volatility in the Global Coffee Market

· Changing consumer tastes and lifestyle choices

4. Starbucks competitors

This section addresses the main Starbucks competitors and how the company manages to stay on top of the industry. The section in the final paper will focus on Starbucks competitive advantage.

Starbucks faces significant completion from Dunkin Donuts and McDonalds (Hawley, 2019).

Starbucks’ competitive advantage is based on four major pillars;

· Offering a third-place experience

· Offering premium high quality coffee

· Expansion with focus on emerging economies

· Integrating technology into business operations

5. Marketing strategy

Marketing strategy refers to the channels a company uses to reach its target market and how it delivers services and products to target customers. Starbucks marketing strategy focuses on the following;

· Quality based differentiation by offering premium quality tea and coffee

· Excellent customer service

· Consistent brand experience

· Unconventional social media techniques to establish consumer connection

6. Future recommendations for Starbucks

Constant need for innovation: To remain at the helm of coffee and snacks industry, Starbucks needs continues innovation to enhance customer experience. Furthermore, the company needs to leverage technology to offer quality services to customers. Operating in a competitive market, there is need for Starbucks to continuously invest in innovation and research to better understand its target market in order to provide personalized services (Martin Roll, 2021).

Need for diversification: there is need for Starbucks to diversify its offerings. Currently, the company significantly focuses on coffee and snacks as part of their main menu. Starbucks’ competitors such as McDonalds position themselves as not only coffee outlets but also more like cafes (Martin Roll, 2021). Diversification in food is critical for Starbucks to establish foothold in emerging economies or regions where the coffee drinking culture is in its blossoming stage.

Pricing and targeting: like its competitors, Starbucks needs to develop a latte index. Starbucks has always targeted the upmarket customer through a premium pricing strategy in most of the markets it operates. Premium pricing has significant pitfalls in most markets because only a specific sub-segment of the population can be the target market, which in most cases is a very small population. Through premium pricing, Starbucks is missing a huge market segment (Martin Roll, 2021). Therefore, it is critical for Starbucks to adjust its pricing strategy to accommodate a large market segment.

7. Conclusion

A brief summary of major points discussed in the project focus on Starbucks success and how it can further improve its services.

8. References

The following sources will be used to support the project

Geereddy, N. (2013). Strategic analysis of Starbucks Corporation. Harvard http://scholar . Harvard. Edu/files/nithingeereddy/files/Starbucks_ case analysis. pdf.

Haskova, K. (2015). Starbucks marketing analysis. CRIS-Bulletin of the Centre for Research and Interdisciplinary Study, 1, 11-29.

Hawley, J. (2019). Who are Starbucks’ main competitors? https://www.investopedia.com/articles/markets/101315/who-are-starbucks-main- competitors.asp

Hess, E. (2017). Starbucks Corporation (a).

Martin Roll. (2021). The secret to Starbucks’ brand success. https://martinroll.com/resources/articles/strategy/secret-starbucks-brand-success/