- SUDIP MITRA

Critical Analysis of Starbucks

INTRODUCTION

Starbucks is the largest coffee house company in the world

It started in 1971 in Seattle in Washington US

It is leading retailer, roaster and brand of specialty coffee in the world

It has 20,891 stores in 62 countries,

It serve brewed coffee, expresso-based hot drinks, snacks, mugs and coffee beans

Competitors Analysis :

Major Competitors

Dunkin' Donuts

McDonald’s

Caribou Coffee

4

Store Locator

• Has 12,500 coffee shops in the United States

McDonald’s McCafé

Starbucks Dunkin’ Donuts

• Has 6,700 coffee shops in the United States

Caribou Coffee

• Has over 31,000 restaurants World Wide.

• Has 415 coffee shops in 16 States in the United States

“In the last few years, Starbucks…has entered into a battle”

Dunkin Donuts in the last decade and a half has been focusing on expanding

their coffee options.

McDonalds on the other hand, has a large, varied menu and generated a

higher income last year than either Dunkin Donuts or Starbucks and has been

expanding their selection of drinks, particularly coffees, since the mid 2000’s.

Analysis of visitor demographics reveals that Caribou Coffee could possibly have more online success if they pull-in some of the same types of online visitors as Starbucks does.

While Caribou Coffee attracts a respectable amount of young adults (32% between the ages of 18 and 34), this does not compare to the 42% that Starbucks attracts.

STARBUCKS MARKET ANALYSIS IN SRI LANKA 08

Global recognitionQuality productsProfitable organisationStrong financial foundationVisionary leader

High priceImporting roasted

coffeeKnown only for coffee

Launching new productsSkilled Labour marketMore tourist attractionUse of social media network

Cultural & Political issues Real State cost and laws in Sri

LankaEconomic down turns

Health cautious customers

SWOT analysis

STARBUCKS MARKET ANALYSIS IN SRI LANKA 09

Five force analysis

STARBUCKS MARKETING STRATEGY 10

48%40

%

4%8%

Adults age 25 - 40Young adults age 18 - 24Children age 13 - 17Age above 40

Market segmentationGeographics

Main Cities

Demographics Age Children (13-17)

Young Adults (18-24)Adults (25-40) Matured (Above 40)

Gender MaleFemale

Income Low Income (Below Rs.25,000)Middle Income (Rs.25,000 –

Rs.40,000)Higher Income (Above Rs.40,000)

Source: ColomboPage News Desk, Sri Lanka.

STARBUCKS MARKETING STRATEGY 11

Starbucks target market

Age group: 18 – 40

Lifecycle: Young and adults

Gender: Male and female

Occupation: College students, persons in managerial, executive, and professional positions

Income: Middle and higher income earners

Location Main cities (Colombo, Kandy, Hikkaduwa, Galle) commercial areas

Targeting

STARBUCKS MARKETING STRATEGY 12

Price high

Price low

Low perceived quality

High perceived quality

Positioning

STARBUCKS MARKETING STRATEGY 13

PRICEHigher than others (Rs.390 for tall, Rs.540 for grande and Rs.740 for venti)

PLACEAccessibility, availability

PROMOTIONSocial media, Free samples, Credit card discounts

PROCESSQuick service, customized cups with name, collect suggestions and feedback from customers

PEOPLESocial, positive attitude, active, skilled staff, training, customer service

PRODUCTCustomized coffee (However you want)

PHYSICALModern furniture, uniform, sign boards, none smoking, kids play area, music

Marketing mix – 7P’s

Starbucks Coffee’s Generic and Intensive Growth Strategies

• Starbucks Coffee’s Generic Strategy (Porter’s Model) “specialty coffee products”

• Starbucks Coffee’s Intensive Strategies (Intensive Growth Strategies) -Market Penetration -Market Development -Product Development

Strategic Analysis and Recommendation for Starbucks Coffee

• A challenge in applying the generic strategy is that Starbucks must always innovate

• Starbucks can use its intensive growth strategy of market development to grow in Africa and the Middle East

• Also, the intensive growth strategy of product development can be used to offer products that suit the consumers in Africa and the Middle East.

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