Starbucks is one of the most successful coffee companies in the US. Currently the company is facing difficulties in the process of development resulting from the impact of economic recession. The main focus of the company is to improve the customer-company relationship (Haskova, 2015). However, the company is facing challenges in developing internal business process and human resources. A business has to undergo through complications in developing an international mindset. Starbucks is presently expanding into numerous markets and it has recorded a great success in doing so.
Is Starbucks expanding or not expanding
Starbucks is currently leading on the coffee market. In its history, Starbucks has focused on introducing innovation in the business. Because of the innovation in its structural operations, the company has managed to become one the rapidly expanding companies; hence it has been able to maintain its leading position. However, the current recession in the economy has impacted negatively on the business development.
What is the competitive landscape; are they facing new competitors and how are they reacting?
Starbucks is facing stiff competition from fast food restaurants. In the environment of competition, Starbucks holds a leading position. The company has been operating for a long time and therefore has the advantage of being more experienced. The company puts measures to upgrade its position and maintain the competition levels (Haskova, 2015). With the advantage of the experience in the market along with customer loyalty, it is possible for the company to maintain the lead. Mainly Starbucks uses the company-customer relationship as the main strategy for improving its operations. This strategy is focused on improving the competitive position it holds in the market. To affect the improvement strategy, the company makes an attempt to expand its market share as a way of attracting customers by using the new strategy (Hogan, 2008).
The marketing strategy used by Starbucks is mainly aimed to attract new customers and increasing the market share it holds. Additionally, the company focuses on improving the quality of their products and services, which enhances customer satisfaction and loyalty.
Is the company facing any serious problems?
Starbucks is going through some serious problems despite its success. Majorly the companys operations have been challenged by the current economic recession in America. Additionally, many outlet branches operated by Starbucks have had to close up. For instance, the case in 2008 when the company closed an approximate 600 stores in the US was a serious challenge that the company experienced. Recently, Starbucks has been facing an increase in the number of its competitors. The major competitors include Dunkin Donuts, McDonalds and Nestle. The important thing for Starbucks is to stand out and be aware of the operations of their competitors (Hogan, 2008).
Starbucks like any other company is faced with daily challenges, however the company deals with the challenges in a more effective and detailed approach. The company makes adjustments with the aim of accommodating the trend in the financial market.
Despite the decrease in sales, Starbucks has been recording an increase in profits. In the financial year ended September, the company recorded the highest profit of $34.2m prior to taxation. On the other hand, sales fell by $405.6 from 408.7m in 2014 after closing 17 stores that were making losses. Presently the company runs 397 stores. Another 209 store has been placed under franchised partners while 226 stores have been licensed to trade along train stations and airports.
Haskova, K. (2015). Starbucks Marketing Analysis. CRIS - Bulletin of the Centre for Research and Interdisciplinary Study, 2015(1). http://dx.doi.org/10.1515/cris-2015-0002
Hogan, R. (2008). Skull Gold. Waterville, Me.: Thorndike Press.
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