Starbucks Case Study

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Starbuck’s has multiple competitors such as McDonalds, Dunkin Donuts, Caribou Coffee, and countless smaller coffee shops and cafes. The main advantage that Starbucks competitors have over them is that they offer their coffee at a cheaper price. As seen in Exhibit 3 the price comparison can be found. While Starbucks is more targeted toward the upper income level their local competitors at cheaper prices target the middle class. Therefore customers have to choose what they want to pay for, do they want to unique and classy experience that is provided by Starbucks or do they want to save money and just get a cup of coffee for a cheaper price.

3. Internal Environment:

There are many factors that contribute to the internal environment of Starbucks. Starbucks expects its staff to excel in their customer relationships. Starbuck’s has continued to brand their products with their baristas, who are strongly committed to sharing their coffee knowledge, product expertise, and service with customers. When hiring baristas the company continues to employ those who have the ability to build relationships, work in teams, and portray interpersonal skills. Not only do the baristas offer excellent customer service but they also do it in a timely manner, offering coffee in less than 3 minutes. Starbucks has done a great job at branding their products. They offer a distinct and unique flavor and smell for their customers. Not only that but they have partnered with the makers of K-cups to offer their customers the total at home brewing experience in a rapidly growing market. Not to mention the products offered in grocery stores across the country that continues to remind the community about the Starbucks brand. The company’s brand power and recognition are strong and is generally perceived as a high quality and trendy coffee brand.

Starbucks has many strengths when it comes to their brand. They have multiple successful lines in grocery stores such as VIA instant coffee, K-cups, and Frappuccino’s. They have very strong intellectual property such as the Starbucks Roast they are more popularly known for. They continue to have a healthy financial situation and they have done an excellent job at creating such a highly recognizable brand image and comfortable store atmospheres. In all of their stores they have hired a professional workforce of educated baristas and train them continuously to offer quality service each time. They have partnered with some of the most reputable companies within the coffee businesses while always suppling a variety of flavors. Although it seems like Starbucks is the ultimate coffee business they do share some weaknesses in their business. The main weakness is their prices. Since their prices are high this increases the competitive pressure. Therefore Starbucks knows they need to continue producing quality products and services in order to stay relevant in the coffee business.