Assignment Purpose: Final company project overview and project completion.
Conduct a company review of Starbucks. What are their unique growth and implementation strategies?
Explain why they give the company a competitive advantage. Compared to other firms, Starbucks has
been very successful in China, why is that? How does their strategy differ from the competition?
Company Overview
Starbucks Evaluation
Even though some of Starbucks products are highly priced in the market, they are still capable of
attracting and retaining their niche target clients. Starbucks stock price was $7 in 2008, as
compared to $80 per share in 2014.
Starbucks shares information on its plans for growth in more detail than is usually given by
companies. The Starbucks increase the level of support that they get from shareholders through
treating them as critical stakeholders of the organization that have a positive impact on its
performance.
The Starbucks Company CEO has been a major influencer of the success gained through the use
of aggressive tactics in expanding the company. The policies and practices that the CEO has
introduced are based on the company’s culture and values. Therefore, there has been long-term
consistency at the organization due to utilization of its strengths
STARBUCKS EVALUATION 2
Unlike other companies that only use brick and mortar principles in business, Starbucks is open
to now models of conducting business especially if they contribute to being close to the client. In
a highly competitive market, Starbucks is ready to apply modern concepts of business in a means
to capture as many clients as possible (Hitt, Ireland & Hoskisson, 2014).
Unlike other coffee retail outlets, Starbucks has been highly successful in China. Starbucks has
been successful in China because it was ready to change its products to suit the Chinese market.
In addition to coffee, Starbucks also makes merchandise such as caps and shirts which it utilizes
to increase brand awareness among its clients. China was a unique coffee retail market because it
is traditionally tea drinking based market. The tea culture cannot be eliminated through the
introduction of an international coffee retail outlet. Instead of trying to outdo the existing tea
drinking culture among the members of the population, Starbucks integrated the culture into its
products such as the introduction of tea-based flavors into their coffee products. The integration
of the flavors contributed to a differentiation of Starbucks in the coffee retail market. Other
international food and beverage brands that have tried to enter into the market include Dunkin
Donuts, Burger King, and Krispy Kreme.
Starbucks ensured that its retail outlets had air conditioning, and was attractive to the members of
its target niche in the market composed of young and modern individuals in the country.
Therefore, company executives, college students and other professionals or students around the
cities could access and enjoy the Starbucks outlets.
Starbucks also differentiated itself by offering highly attractive incentives its employees.
The company believes that employees are an extension of the company’s brand. Therefore, if
employees are pleased with a company, they would be ready to go an extra mile to ensure
STARBUCKS EVALUATION 3
customer satisfaction. One of the reasons why most customers keep on going to Starbucks is
because of the great customer service that they receive. Starbucks has an operating margin of
about 24% as compared to the 21% margin observed in other countries such as the United States.
The margin contributes to the above average salaries paid to the company’s employees. If
employees feel appreciated, they are likely to transfer the aspect to clients; contributing to high
client retention rates. Therefore, Starbucks clients still visit the outlet even though competitors
might offer lower prices for similar products in the retail outlets (Wang, 2012).
References
Hitt, M.A., Ireland, D. & Hoskisson, R.E. (2014). Strategic management: Concepts: Competitiveness and
Globalization. Ohio: Cengage brain.
Rein, S. (2012). Why Starbucks succeeds in China and others haven’t. USA Today.
Wang, H. (2012). Five Things Starbucks Did to Get China Right.
