Starbucks Case Study

(Part 2)


Starbucks also partakes in corporate social responsibility as a main part of its strategy, and they do this by receiving their coffee beans from ecologically and economically sustainable sources across the globe. Because Mr. Schulz has such a high opinion of Starbucks, another part of his strategy is to hire employees that will engage customers and put them in a happy state of mind while waiting for their coffee. This places Starbucks far ahead of their competitors, such as McDonalds or Dunkin Donuts, whose customer service is beyond lacking. Employee retention is a huge issue, especially in a world where things change before the blink of an eye, so Starbucks provides healthcare to their employees, which implanted trust in their hearts. Additionally, the layout of Starbucks locations is very relaxing and warm, giving customers the feeling of being out in the forests of the Pacific Northwest. It’s difficult, if not impossible, to find another large-scale chain store or restaurant that can create this beautiful ambiance.

Aside from the aforementioned strategies, Starbucks uses diversification to truly capture the entire market. It has a line of coffees that are sold in supermarkets and club warehouses, as well as a coffeemaker. Starbucks has also partnered with Visa to create a credit card that can give customers reward points for free beverages. Licensing is a strategy used by many corporations, and Starbucks is no exception. It has collaborated with PepsiCo and Unilever to create bottled beverages, which are sold both in Starbucks coffeehouses and grocery stores. The success of the consumer goods products has been so great, and it will continue to be a key point in Starbucks’ strategy, as is the expansion into international markets, most notably Asia.

Because of Starbucks’ sincere concern for the well being of its employees and its know-how in the industry, it has outshined its competitors. Something important that I immediately think of when I hear about Starbucks is its dedication to working with suppliers and distributors that are genuinely concerned with running an honest business, which is something rare and precious in the era of tunnel vision for profit. This strategy clearly links Starbucks with its industry environment.

Starbucks’ transition from a small chain of coffeehouses to the world’s largest supplier of coffee has been no easy task. It is obvious that the various strategies that Starbucks uses have been tested and proven effective over the years. The company knows where to compete, and they know how to compete. Their success is sustainable because they have the right mix of ingredients: satisfied employees and customers, brand loyalty, competitive advantage over similar restaurants or coffeehouses, and numerous other resources that make it a great place to be a part of. I would recommend that Starbucks continue to expand internationally, especially into China and India. As their population continues to skyrocket and the income gap shrinks, Starbucks will become even larger and more profitable than Howard Schulz could have ever dreamed possible.