Starbucks - Essay Example

Only on StudentShare

Extract of sample

Each company faces problems and obstacles, even successful ones like Starbucks. One of the main challenges that Starbucks is facing is dealing with competitors. Coffee retailers are scattered all over the world in huge numbers. By involving thousands of shops operating in the coffee field, and as the competition increases, it makes the task more difficult for Starbucks to maintain its place. Also, the most obvious challenge that Starbucks is dealing with is the current financial crisis in America.
Compared to other cafes prices, Starbucks is one of the most expensive café shops in the world, and a number of consumers find the prices are exaggerated (Fellner 2010). A recent research made by a team of mystery coffee researchers shows that, the rates in Starbucks compared to Costa Café and Café Nero is the highest (Burks 2009).
As seen on the graph above, Starbucks has experienced fluctuations in profit, starting from 2005 with a steady increase in the net income, and then it dropped down in 2008, decreasing the net profit from more than $600 million to less than $400 million. On the other hand, sales grew in 2010 getting the highest net income over the earlier 5 years. In 2010, Starbucks turned about 11% of its revenue into free cash flow (FCF). The company earned more than £600 million cash on net income (Nadine 2008). Also, there has been a surprising increase in the company’s net income in the last year. In the third quarter of 2011, the income rose up to 33%, earning more than $880 million net income.
Howard Shultz stated on July 11, 2006, "First and foremost I want to thank you for making Starbucks the $6.4 billion global company it is today, with more than 90,000 employees, 9,700 stores, and 33 million weekly customers." Taking the 33,000,000 weekly customers and dividing it by 7 you will get 4.7 million customers per day. Since that time Starbucks has added many, many new stores so ...
Download paper


According to Starbucks Coffee Company, their first cafe shop in the United Kingdom was been opened on May 1998. The main aim of the report is to gather information on demand and supply…
Author : americabaumbach

Related Essays

The next portion of the essay will describe theoretical background of marketing concepts. Marketing Concepts Research scholars such as Burrow (2011), Sandhusen (2000), and Mercer (1996) have stated that organizations need to decide marketing strategy in terms of marketing mix, segmentation and target market, in order to become successful in competitive business environment. Kotler et al (2009) have pointed out that organizations need to change marketing mix such as product, price, place and promotion in accordance with the situational perspective, in order to achieve competitive advantage....
8 pages (2008 words) Essay
Furthermore, the report provides a discussion of the marketing mix and possible strategies that should be employed in order to ensure that the launch of a new organic product line by Starbucks in the UK is successful. Table of Contents Executive Summary 2 1.Introduction 3 2. Situation Analysis 4 2.1 PESTLE Analysis 5 The rise of health conscious consumers in the UK means that the organic food industry is no longer categorized as a niche market but has recently become a market that is targeted towards the masses. According to IBISWorld, sales volumes of organic products in the UK are expected...
8 pages (2008 words) Essay
10 Evaluation of the Effectiveness of the Investment 10 Conclusion 12 References 13 Bibliography 15 Introduction In 1971, Jerry Baldwin, Gordon Bowker and Zev Siegal start up a coffee store in Washington in the heart of Seattle’s Pike marketplace. During 1987, Mr. Schultz purchased the store and started expansion of the business outside the Pacific Northwest and Chicago. In 1993 Starbucks registered under company rules and started selling share to expand its business world-wide (Starbucks Corporation, 2013; Lee, 2009). Starbucks wanted to establish itself as the premier seller of the most...
10 pages (2510 words) Coursework
Other countries where Starbucks has opened several stores include Canada, where it operates 1,248 and Japan where Starbucks has 965 stores (Garza par. 1). Industry Starbuck Corporation deals with the sales of drip brewed coffee, hot drinks of espresso, coffee beans, hot and cold drinks, sandwiches, salads, sweet pastries, Panini, snacks and other items such as tumblers and mugs. In addition, Starbucks sells coffee and ice cream at its grocery stores (Stevens and Loudon, 2005). As aforementioned, Starbucks is currently the largest coffee company and chain in the world operating more than 20,000...
3 pages (753 words) Essay
This will allow the licensor firm to collect a royalty fee from the licensee. This can be of great benefit to a licensor that has limited capital to enable it engage in full operations in the foreign nation. A major disadvantage though is the fact that this mode gives the firm much less tight and central control over the foreign operations....
6 pages (1506 words) Term Paper
During the period that they get the losses they usually aim at gaining the trust of their customers....
4 pages (1004 words) Research Paper
Marketing Starbucks
Further there is provided an overview of the Starbucks Corporation and its current business activity. Based on the key findings of the food and beverage industry and marketing strategy of the Starbucks Corporation there have been developed several recommendations for the American-based coffee retailer operating in the UK market. These recommendations included the following: putting more efforts towards promoting the uniqueness and special Starbucks experience offered to the British customers; focusing more on the development and promotion of the healthy food; developing more flexible pricing...
9 pages (2259 words) Essay
Got a tricky question? Receive an answer from students like you! Try us!