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Starbucks Case Study

1308 words - 5 pages

Starbucks is one of the most recognized brands in the world. Since 1971 Starbucks has become synonymous with coffee which they used to embody the brand and create a lifestyle behind it. Starbucks wants the world to know they have more to offer than coffee and are committed to meeting the needs of society. “We’re not just passionate purveyors of coffee, but everything else that goes along with a full and rewarding coffeehouse experience. It’s not unusual to see people coming to Starbucks to chat, meet up or even work” (Starbucks). In addition to coffee Starbucks locations keep a customer base by offering free Wi-Fi, music, and partnerships with Barnes and Nobles throughout the country. Starbucks is aware that competition is gaining ground since many fast-food chains have upgraded their coffee menus trying to mimic their style. Also coffee-houses/shops are opening who have adopted the idea of community and become just as popular and profitable. The company realized it reached a plateau and needed to develop new marketing and strategies to be competitive, retain, and gain customers. In order to remain competitive companies must stay innovative and reinvent their brand according to changes in society. A company that focuses on one advantage can limit their profit potential. Starbucks has recently decided to broaden its potential and enter the market by adding wine, beer, and small entrees to the evening menus at its independent locations. This move is one of its riskiest ventures to date, to make it possible Starbucks marketing executives want to use its most intangible asset “the brand”. The brand name may be intangible (literally, it cannot be touched), but it is a durable asset whose value increases as consumers associate it with quality (Michaels, p.258). The die-hard Starbucks customer may welcome the changes as long as the atmosphere remains, while its non-supporters might see this as another way for Starbucks to capitalize. Capitalization is the American way and Starbucks shareholders are in favor of the profit potential and so are market insiders who feel this may boost Starbucks resume. Scott Bedbury, who was marketing chief for Starbucks and Nike back in the 1990s, says “the evolution is critical for Starbucks and notes that wine sales could bring in “latte-like” profits” (Horovitz, 2010). The biggest challenges for Starbucks is gaining entry into this new market and retaining customer loyalty.
Starbucks understands the coffee and the liquor markets both require government regulation. Since most of Starbucks coffee is grown by the company in/out of the U.S. it’s the percentage that is imported from foreign producers that will cause the most challenge to Starbucks manufacturing revenue. In order of Starbucks to gain entry to the wine and beer industry it will have to rely on its advantage on handling government regulation, but the blending of markets will require some creative strategies. The Food and Drug Administration (FDA), in the...

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