Starbucks Case Analysis

Starbucks

When consumers think of coffee, they more than likely think of Starbucks, They visualize the “Venti” size cup full of delicious coffee, and also picture the famous, green mermaid logo. Starbucks is coffee and coffee is Starbucks. This mantra became synonymous only recently as they grew in popularity within our culture. In the last twenty years they have grown from a mere 100 stores to more than 17,009 outlets worldwide. It is safe to say that you can’t go more than a few miles in any major metropolitan without running into a Starbucks.

The Starbucks Corporation is not only a coffee giant, but a marketing genius. They have successfully built one of the most recognizable and trusted brands, and they show no sign of digressing. They took the risk of going past coffee and expanding into specialty sales. These specialty sales put the Starbucks name outside of the coffee shop and into your bookstore, cafeteria, supermarket, department store, and even on your plane ride. Starbucks is not only a restaurant, but a lifestyle. It has become a status symbol. Going to Starbucks is just like owning a BMW, or having the latest Louie Vuitton purse. Even in these difficult economical times, when money is tight for most people; an avid coffee drinker is still willing to spend that $5.00 on a latte, even if they can get the same thing at a corner store for $0.95. So many companies are breaking down the door to get into business with Starbucks because of their brand equity.

When an already large business expands, several issues may arise. Starbucks has saturated the coffee market to the point where it has nowhere to go. Jim Hitower sarcastically puts it perfectly in his publication “The ‘Anti-Starbucks’ Starbucks”: “Starbucks has so saturated the coffee market that it is now opening new Starbucks inside its old stores”. With a trend of supporting local business, giants like Starbucks are no longer what people want. Coffee enthusiasts want to go to...