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Starbucks Tradeoffs

In: Business and Management

Submitted By DrewJuliano89
Words 479
Pages 2
Andrew Juliano (Starbucks) Starbucks has always been recognized as the top company in the premium coffee market. However, over the last 5 years, the company has experienced less sustainable growth. I believe that one of the most influential factors of this recent decline have been their identity crisis and their direct competition. Starbucks has always been associated with an experience. Due to their global success, there have been constant additions of new locations. This permeation has consequently caused a ripple effect in customer perception. The things that made this coffee shop to appealing are being eroded by the lack of exclusivity. Although they still have their strong position and maintain a differentiating strategy, it does not change the fact the brand is being spread too thin. The company was not meeting annual targets for store openings, which resulted in the closing of many locations. Competition is also putting a chokehold on this company. Places like Dunkin Donuts, McDonalds and Pete’s Coffee are some of those competitors leading the front. Unfortunately for Starbucks, these companies are much cheaper. Customers are noticing that if the experience of a Starbucks is being diluted, then they no longer have the effectiveness to charge such a premium for their coffee. The competitor pressure has forced Starbucks to implement some things that may push them into being “stuck in the middle.” We are seeing locations opening drive thrus, and offering breakfast sandwiches. These things are all factors in the dilution of the brand image and will ultimately prove as a poor strategy for the company. Environmental factors are also pressuring Starbucks. Perhaps the most influential factor would be their rapid expansion. This type of large scale expansion is something that the company had no experienced to date, and was the reason for them losing focus…...

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