Situation Analysis:
Company
Starbucks is a leading international coffeehouse that was founded in the year 1971 and acquired by Howard Schultz, the CEO of the company, in 1987. It has shaped the American culture by altering what we pay for coffee, what we eat, where we meet and how people spend their time socially. It rose from a single location in Seattle to a multibillion-dollar enterprise that operated in more than 17,000 retail stores in fifty countries. Originally Starbucks only sold coffee beans and ground coffee and later on came up with prepared coffee, Italian-style expresso beverages, cold blended drinks, food items, premium-teas, and beverage-related accessories and equipment. However, as the brand moved into new markets because of its aggressive growth strategy, its activities in the retail coffee shops were weakened and this made it more vulnerable to competitive threats from both higher as well as lower quality entrants. Therefore, it had to make decisions on vertical integration related to its expansion into the Consumer Packaged Goods domain.
Collaborators
The first product of Starbucks was sold through mass distribution channels such as Kraft, Dreyer’s and Pepsi. It also expanded product distribution through licensing agreements with United Airlines and Hyatt. Starbucks also expanded its retail stores. By 2008, 16% of Starbucks revenues came from sources other than the company-owned retail stores.
Customers
When Starbucks began in the early nineties, the primary consumers that were targeted were the American elite, who were wealthy & highly educated professional workers. They were also termed as the Bourgeois Bohemians. After that, several other classes of customers have been targeted. The customers can be diversified and include people from various segments such as young adults, business professionals, as well as teenagers. These