Background:
Starbucks is an internationally acclaimed brand that offers premium roast coffee along with other beverages. It is at present the largest coffee café in the world and is known for selling not only good coffee but also a great experience to its customers. Starbucks mission statement reads, “to inspire and nurture the human spirit one person, one cup and one neighborhood at a time’’. It began with an idea that cropped up in the minds of three friends who decided to start a venture out of their love for gourmet coffee. The timeline for growth of Starbucks was:
1. 1971: First store opened
2. Late 1970’s: gained momentum in the Washington D.C.
3. 1980’S: Howard Schultz became the new Head of Starbucks
4. As of today: Starbucks has more than 17,000 stores located in 55 countries
Environment:
Starbucks is a renowned competitor in the coffee industry. Coffee is a necessity for several people across the globe. Due to their fast paced lives, people depend on easily available coffee at stores and cafes rather than brewing their own. Convenience has become a big factor in the advancement of the industry. This increases competition among brands attempting to offer superior customer value to coffee lovers. Some competitors of Starbucks are:
1. Tim Horton’s
2. Mc Donalds
3. Keurig and Tassimo
Starbucks is an internationally acclaimed brand that offers premium roast coffee along with other beverages. It is at present the largest coffee café in the world and is known for selling not only good coffee but also a great experience to its customers. Starbucks mission statement reads, “to inspire and nurture the human spirit one person, one cup and one neighborhood at a time’’. It began with an idea that cropped up in the minds of three friends who decided to start a venture out of their love for gourmet coffee. The timeline for growth of Starbucks was:
1. 1971: First store opened
2. Late 1970’s: gained momentum in the Washington D.C.
3. 1980’S: Howard Schultz became the new Head of Starbucks
4. As of today: Starbucks has more than 17,000 stores located in 55 countries
Environment:
Starbucks is a renowned competitor in the coffee industry. Coffee is a necessity for several people across the globe. Due to their fast paced lives, people depend on easily available coffee at stores and cafes rather than brewing their own. Convenience has become a big factor in the advancement of the industry. This increases competition among brands attempting to offer superior customer value to coffee lovers. Some competitors of Starbucks are:
1. Tim Horton’s
2. Mc Donalds
3. Keurig and Tassimo
The coffee industry is faced with the challenge of pricing. The current economic slowdown has reduced the levels of disposable income of customers. Thus, lowering the price looks like a necessity, however, with the rising prices of coffee beans, that is hardly feasible. Thus, coffeehouses are making an attempt to utilize social media for gaining brand loyalty.
Current Scenario:
1. 2012: Starbucks is the owner of five brands i.e. Tazo Tea, Torrefazione Italia Coffee, Evolution Fresh, Seattle’s Best and Starbucks.
2. Starbucks Coffee further boasts of three varieties: Starbucks Ice cream, Coffee and Tea and also RTD (Ready to Drink)
3. Menu includes lattes, smoothies, juices along with frappuccinos as beverages and pastries, cookies, salads, sandwiches etc. as food items.
4. Selling of merchandise includes items like coffee mugs, books, accessories and other gift items.
UK Tax Scandal:
It was stated by Reuters that Starbucks had failed to pay Tax to HMRC for 3 years. Starbucks declared a £ 26 million loss. However, it was paying a tax of £8.6 million to HMRC since 1998. The figure of loss was aggravated in the year 2011 to £33 million. However, Starbucks argued to have not violated any British laws and have made timely payments.
Expansion of Starbucks in India:
First retail store of Starbucks was opened in Mumbai in October, 2012. Two other stores were opened thereafter, one of them being in the Taj Hotel. Starbucks entered into a partnership in the form of a joint venture with Tata Global Beverages which was called Tata Starbucks Ltd. The coffee beans for Starbucks are provided by a company named “Indian Espresso Roast”. The primary aim is to acquire more share of the target market i.e. the youth. Thus, the main store in Mumbai is designed in a manner such that it has a vintage feel to it, so that the effect is similar to that of one walking towards a coffee shrine. The menu caters well to the Indian tastes and preferences and includes delicacies like tandoori paneer roll. Competitors of Starbucks in India primarily include Café Coffee Day and Costa Coffee.
Current Scenario:
1. 2012: Starbucks is the owner of five brands i.e. Tazo Tea, Torrefazione Italia Coffee, Evolution Fresh, Seattle’s Best and Starbucks.
2. Starbucks Coffee further boasts of three varieties: Starbucks Ice cream, Coffee and Tea and also RTD (Ready to Drink)
3. Menu includes lattes, smoothies, juices along with frappuccinos as beverages and pastries, cookies, salads, sandwiches etc. as food items.
4. Selling of merchandise includes items like coffee mugs, books, accessories and other gift items.
UK Tax Scandal:
It was stated by Reuters that Starbucks had failed to pay Tax to HMRC for 3 years. Starbucks declared a £ 26 million loss. However, it was paying a tax of £8.6 million to HMRC since 1998. The figure of loss was aggravated in the year 2011 to £33 million. However, Starbucks argued to have not violated any British laws and have made timely payments.
Expansion of Starbucks in India:
First retail store of Starbucks was opened in Mumbai in October, 2012. Two other stores were opened thereafter, one of them being in the Taj Hotel. Starbucks entered into a partnership in the form of a joint venture with Tata Global Beverages which was called Tata Starbucks Ltd. The coffee beans for Starbucks are provided by a company named “Indian Espresso Roast”. The primary aim is to acquire more share of the target market i.e. the youth. Thus, the main store in Mumbai is designed in a manner such that it has a vintage feel to it, so that the effect is similar to that of one walking towards a coffee shrine. The menu caters well to the Indian tastes and preferences and includes delicacies like tandoori paneer roll. Competitors of Starbucks in India primarily include Café Coffee Day and Costa Coffee.
Strategic Challenges:
Even though Starbucks is a highly renowned brand in the international coffee market, it still continues to face certain challenges. Some of the major challenges faced by Starbucks and which can also be used for marketing course work subjects are:
1. International expansion which is becoming difficult in the presence of cut throat competition
2. Innovation is required to outshine competitors
3. Customer Relationship Management to enhance responsiveness and lead to customer acquisition
4. To gain market share in Europe has been difficult due to the inability of Starbucks to cater to European taste
5. Finding companies to enter into joint ventures with has never been easy
6. Providing value to customers by enhancing customer experience is the prime motive
7. Devising a pricing strategy that maximizes profitability needs to be given due attention
8. Competition from cheaper options for coffee like the newly introduced “Mc Café” is rising
9. Ensuring sustainable growth is another hassle
Summary:
The case throws light on Starbucks, a leading brand in the coffee industry, and its marketing strategies. It tells us about how Starbucks came into being and eventually evolved as a global leader. It aims at not only offering superior product to its customers but aims at ensuring a great customer experience which makes it the preferred choice of millions across the globe. However, it has witnessed its own share of ups and downs with the Tax Scandal of UK. Starbucks opened stores in India in 2012 and has been successful ever since. It has however faced certain challenges since its worldwide inception, some of which are overcoming competition, ensuring sustainability and bringing about innovation. and these challenges can always be used as a marketing assignment help.
Even though Starbucks is a highly renowned brand in the international coffee market, it still continues to face certain challenges. Some of the major challenges faced by Starbucks and which can also be used for marketing course work subjects are:
1. International expansion which is becoming difficult in the presence of cut throat competition
2. Innovation is required to outshine competitors
3. Customer Relationship Management to enhance responsiveness and lead to customer acquisition
4. To gain market share in Europe has been difficult due to the inability of Starbucks to cater to European taste
5. Finding companies to enter into joint ventures with has never been easy
6. Providing value to customers by enhancing customer experience is the prime motive
7. Devising a pricing strategy that maximizes profitability needs to be given due attention
8. Competition from cheaper options for coffee like the newly introduced “Mc Café” is rising
9. Ensuring sustainable growth is another hassle
Summary:
The case throws light on Starbucks, a leading brand in the coffee industry, and its marketing strategies. It tells us about how Starbucks came into being and eventually evolved as a global leader. It aims at not only offering superior product to its customers but aims at ensuring a great customer experience which makes it the preferred choice of millions across the globe. However, it has witnessed its own share of ups and downs with the Tax Scandal of UK. Starbucks opened stores in India in 2012 and has been successful ever since. It has however faced certain challenges since its worldwide inception, some of which are overcoming competition, ensuring sustainability and bringing about innovation. and these challenges can always be used as a marketing assignment help.