- Starbucks - - ADMS 4900.3 C Issue Identification...

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ADMS 4900.3 C Starbucks Issue Identification Due to increasing competition, the primary issue faced by Starbucks is their ability to maintain and increase their market share along with concretely defining its brand image. With increasing trends towards specialty coffee beverages, there has been a high influx of companies (e.g.3, 485 competitors in the market i ) competing for market share; Starbuck’s primary long term goal and objective has been to become “…the most recognized and respected brand of coffee in the world…,” which combined with the increasing competition clearly supports that Starbuck’s must increase their market share and solidify their image in order to remain market leaders. To a lesser extent, another issue of concern is Starbuck’s financial capabilities because it is heavily dependent on equity and debt financing to grow, which may impede their long term objective. This could be a disadvantage when compared to one of their major competitor, Second Cup, who is franchised and requires less internal financing. Analysis Objectives and Goals Howard Schultz, Chairman and CEO of Starbucks Corporation, was a visionary who originally foresaw coffee houses in North America. He helped to build Starbuck’s into a successful and profitable organization that provided high quality specialty coffee to its end consumers. His goal is to ensure that Starbuck’s maintain “the same values, and guiding principles,” because he recognizes that Starbuck’s “offer more than just a great cup of coffee – we want to offer a memorable experience.” ii As an organization, Starbuck’s objective is similar to Howard’s; however, the greatest preference of stakeholders is to increase profits, through continued expansion (i.e. global market, Pacific Rim). As a result of growth and high demand for coffee, Starbuck’s has expanded its retail products into various kiosks/carts; however, as Howard 1
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ADMS 4900.3 C Starbucks experienced at The Brewery, these choice of distribution is not congruent with Starbucks culture and will detract from Starbuck as a brand. Background/ Theories Their current strategy is to maintain their market position and establish a strong presence globally. To support the goals of the organization, they have established joint ventures with a variety of well known organizations, such as Pepsi-Cola and United Airlines that have developed new channels of distribution. They have positioned their products as medium priced and high quality; as of 1996, Starbuck’s leadership position within the specialty market place was firmly established, “with more than 1, 000 retail locations in 32 markets throughout North America and two new stores in Tokyo, Japan.” iii What is currently happening is that Starbuck’s has decided to enter the international market place before their competitors to capitalize on the growing desire for Western brands and take advantage of higher coffee consumption rates in various countries. iv
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This note was uploaded on 01/26/2010 for the course ADMS 4900 taught by Professor Jungchinshen during the Spring '10 term at York University.

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- Starbucks - - ADMS 4900.3 C Issue Identification...

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