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Table of Contents
You are required to identify the core competencies of the company assigned and identify how they have
contributed to the success of the organisation.......................................................................................................2
You need to do analysis to identify the key industry developments and their impact...........................................3
You need to produce a report on whether or not the current strategy of the company will remain appropriate
in view of the changes in the industry and the success of the current strategy.....................................................4
Your recommendations............................................................................................................................................5
 Evidence from a range of sources about the industry and about whether the company's existing strategy
is successful..............................................................................................................................................................5
 Use appropriate criteria to assess whether the current strategy will remain relevant as the industry
changes.....................................................................................................................................................................5
 Whether a change of strategy will be possible or desirable...........................................................................5
 Propose a new possible strategy that could improve their business performance.......................................5
You are required to identify the core competencies of the company
assigned and identify how they have contributed to the success of the
organisation.
Starbucks Coffee is an international coffeehouse that began as a single store in Seattle’s Pike Place Market
back in 1971. Founded by businessman Howard Schultz, a number of strategic initiatives, including the creation
of a strong brand, the development of premium products, and the expansion of the company into
international markets. In the United States, 54% of the population over the age of 18 drink coffee daily, and US
drinkers spend $40 billion on the beverage each year (Harvard School of Public Health,

2014). According to the following statistics, there is a great market potential in the world for this particular
service and production; Starbucks as well as many competitors such as Costa Coffee or McCafe have seized this
opportunity and continue to innovate in this market.

STARBUCKS' CURRENT MARKETING STRATEGY

Every company needs to implement an effective marketing plan in order to gain consumer attention and
create a brand identity. Starbucks' marketing strategy will be described using the core marketing strategy
concept, identifying the positioning and marketing mix, and analyzing the environment in which it operates.

Core Marketing Strategy

Segmentation, targeting, positioning, and distinctiveness are all examined in a core marketing strategy study.

This kind of study enables the business to understand the services and product categories it is selling as well as
the target market.

STARBUCKS' POSITIONING

Customers at Starbucks buy pricey, high-quality goods, but they also get a tailored in-store experience
facilitated by trained personnel, such as having their name printed on the plastic cup they will be handed. This
helps Starbucks establish itself as a premium brand and compete with rival companies.

Starbucks may distinguish its goods and services from those of their rivals by using the concept of a unique
selling proposition. Starbucks is renowned for its excellent customer service and in-store experience since
consumers may either spend some time in the store and take advantage of the welcoming and pleasant
atmosphere and Wi-Fi, or they can quickly get their beverage and go.In each instance, the buyer is expected to
leave with a special memory. Customers may find some human touch in their daily life in a Starbucks store,
which is a unique selling proposition in a fast-paced world where technology is getting more individualized and
where social interactions are declining.
 STRENGTHS WEAKNESSES

• Overexposure
• Brand Identity

• Quality • Too many products

• Variety • Risky investment in more locations.

• Locations

• Convenience

• Store Ambiance

OPPORTUNITIES THREATS

• Customization • Competitors have lower prices

• Lack of ownership of coffee farms

• International Markets
• Decrease in consumer buying power
• On-the-Go Lifestyle
• Rising prices of coffee and milk
• Partnerships • Saturated market

SWOT, Resource audit and any other tools that you can think of
You need to do analysis to identify the key industry developments and
their impact.
This will be an external however cannot be done without an in depth industry analysis

This company's attempts at rapid expansion and value innovation were its main problems.
The drive to grow could expose the business too much and jeopardize its flexibility.
Although it is not obvious if they compete in the same market, newcomers to the industry
like McDonald's provide a new potential threat of competition.
Porter's Six Forces are listed below along with the threat they pose to Starbucks. Due to the
natural resources required to produce its components, suppliers have significant bargaining
power. Starbucks is committed to sourcing high-quality, fair-trade coffee, frequently from
other nations. The number of vendors is constrained by these specifications. Due to changes
in the coffee market, the threat of new entrants is moderate. The demand for atmosphere
and a gathering place is waning in favor of on-the-go options, and there is potential for
threat should a new competitor enter the market with a different business strategy.
However, Starbucks is well-known.
The primary rivals of the business offer premium coffee at discount rates. Due to
competitors' stronger pricing strategies, the sector is experiencing price wars. The
companies do not have the same atmosphere as Starbucks, according to Starbucks'
followers, despite having lower prices. McDonald's and Dunkin' Donuts are two of
Starbucks' primary rivals. The industry's competitive forces include seller rivalry, alternative
products, substitute suppliers' negotiating power, possible new entrants, and buyer
bargaining power.

The company's main competitors provide premium coffee at discounted prices. The industry
is seeing price wars as a result of tougher pricing techniques used by competitors. Despite
having lower prices, the establishments do not have the same vibe as Starbucks, according
to Starbucks' supporters. Dunkin' Donuts and McDonald's are two of Starbucks' main
competitors. The competitive dynamics in the market are seller rivalry, replacement
products, and the purchasing power of substitute providers, potential new entrants, and
alternative products.

Reduced pressure from replacement items is facilitated by the culture and practices of a
certain nation. Because some consumers choose to obtain caffeine through energy or soft
drinks, the financial influence on the power of alternative for consumers is reduced;
nonetheless, this element is controlled by the sheer number of people who drink tea or
coffee throughout the world. Threats from new rivals are ascribed to decreased coffee
prices as a result of competitors, lax regulation, and easy access to pre-existing distribution
routes and suppliers. These forces are countered, though, by economies of scale and brand
loyalty. In addition, because of the high level of product innovation, new businesses find it
challenging to stand out. Due to increased competitive forces brought on by the
introduction of new items, there is now a need for product differentiation based on quality,
variety, and service.

Due to the economic crisis and the industry's moderate and steady sales development,
there is intense competition in the coffee sector. Finally, since clients are not limited to
switching items, rival companies have been allowed to emphasize brand quality and image.
You need to produce a report on whether or not the current strategy of
the company will remain appropriate in view of the changes in the
industry and the success of the current strategy.

This needs to be critical and a cross comparison of the first to elements I.e. is the company able to
cope with the changes.

McDonald's and Dunkin' Donuts are the main participants in this sector. McDonald's
currently runs its own eateries and has set up franchisees in the nearby areas. The business
has created an internal marketing team to aid in maintaining contact with customers. The
strategic marketing team that McDonalds has in place has been working successfully. One of
the international eateries that franchises businesses is Dunkin' Donuts. The business is now
using the waste reduction method when producing drinks.

This action will boost output and help free up funds for initiatives to win over customers'
loyalty.

Starbucks is particularly interested in the coffee business as a whole because it is a

competitor in the specialty sector. New entrants in this category face no obstacles, but they
must overcome the difficulty of the market's brand-loyal clientele. Over 108 million
Americans consume coffee every day, according to figures compiled by the national coffee
association. Additionally, the data reveals that over 166 million people had consumed coffee
in the past, indicating increase.
Your recommendations (meaning whether or not the company should continue with its
current strategy) should be based on:
 Evidence from a range of sources about the industry and about whether the company's
existing strategy is successful.
 Use appropriate criteria to assess whether the current strategy will remain relevant as the
industry changes
 Whether a change of strategy will be possible or desirable
 Propose a new possible strategy that could improve their business performance

First, Starbucks is currently having issues with customer service since they are unable to
enhance service pace. Customers think Starbucks simply cares about increasing revenues, as
the case shows, rather than providing top-notch customer service. Starbucks cannot raise
pricing because doing so will exacerbate the problem and cause the business to lose more
clients.

Starbucks doesn't have an internal strategy plan, either. This has prevented the business
from developing a proactive feedback system that would have allowed customers to express
their satisfaction and increase customer satisfaction. In addition to increasing trash
production, Starbucks is also increasing productivity. Additionally, the lack of automated
espresso equipment causes the company's services to be slow.
Gamble, J. E., & Thompson, Jr., A. A. (2011). Essentials of Strategic
Management. New York: McGraw-Hill Irvin.
Laudicina, P. A. (2010, April/May). Globalization Enters a New Era: What Course
Will it Take. Corporate Finance Review, pp. 5,7.
Starbucks. (2011). Career Center. Retrieved from www.starbucks.com:
<http://www.starbucks.com/career-center>
Starbucks. (2011). Company Profile. Retrieved from
Starbucks: <http://assets.starbucks.com/assets/aboutuscompanyprofileq12011final1
3111.pdf>
Starbucks. (2011). Customer Service. Retrieved from
www.starbucks.com: <http://www.starbucks.com/customer-service>
Starbucks. (2011). Starbucks to Expand Premium Single-Serve Coffee Offerings.
Retrieved from Starbucks.com: <http://investor.starbucks.com/phoenix.zhtml?
c=99518&p=irolnewsArticle&ID=152908   8&highlight=>
Thompson, A. A. & Shah, A. J. (2010). Case Study: Starbucks’ Strategy and
Internal Initiatives to Return to Profitable Growth.