Starbucks Company proved to be the most successful chain of coffee houses in recent years. A great number of people all over the world go to Starbucks coffee houses every day. However, the success of Starbucks may be explained not only by a wide range of coffee, bagels, muffins and other products, but also by the friendly atmosphere and excellent customer service. Starbucks Company is known for its national and global success. But the question is whether this business will be as flourishing and profitable in future. The following research analyzes the way of Starbucks Corporation to success starting from early 2008 as well as the threats it encounters or may encounter in the nearest future. The research also gives a brief overview of the opportunities for further development of the company.
Starbucks aims to create a network of coffee shops in the USA as well as in many other countries of the world. It reached its greatest success in early 2008, by which time the initial public offering grew up to six thousand percent (Batsell, 2001). However, in recent years the market has demonstrated certain decline of Starbucks Company. So the question is whether Starbucks coffee houses will be further maintained on a steady level or whether the business will remain under threat of losing its prosperity. In this regard, it is important to consider possible options of Starbucks Company to prevent its further decline.
The starting point would be the analysis of current market for coffee in relation to the range of products provided by Starbucks coffee houses. It will help to find out whether the demand for coffee is declining, and how to maintain prosperity of business in this situation. Starbucks has been on a gradual and steady decline since 2007. During this time its stock shares dropped by fifty percent of their value. The last increase of stock value has been seen in early 2008 (Roby, 2011). In such a way, Starbucks has evidently been declining in comparison with its major rivals. It may be explained by the economical slowdown that has changed customers’ spending habits. Coffee houses with a wide range of products are among the main spheres where customers spend their money.
Starbucks considers itself to be the main coffee provider. However, it has certain weaknesses. Despite the fact that Starbucks coffee is considered to be a high-quality product, most customers consider that the coffee houses charge too much. Starbucks is also inflexible in regard to location charging the same price within the USA and all over the world. Besides, Starbucks provides only one kind of coffee, unlike its rivals which offer a wide variety of coffee suitable for any taste. It makes Starbucks unappealing for many customers.
Having analyzed the weaknesses of the company, it is important to proceed to certain threats to the future of the business. The main threat for Starbucks Company in 2012 is increasing competition. Recently, such companies as Dunkin’ Donuts, McDonalds, Peet’s and others have grown so much that they represent serious rivals of Starbucks (Grewal & Levy, 2008). One more possible threat is that coffee is popular only nowadays, and it may go out of fashion in the nearest future. In this regard, the only way out for Starbucks is to spread its business in other industries which would be more secure and safe in the global market. However, Starbucks Company is so specialized that it might be difficult to move to another business sphere.
Finally, it is important to discuss the opportunities of Starbucks Company. First of all, Starbucks offers a wide range of goods which are sold to other companies. It expands the market at a much lower cost than opening new branches (Thompson et al., 2007). Furthermore, Starbucks Company used its multiple resources to open an international business. It greatly contributed to the development of their brand image. Moreover, one of the greatest opportunities of Starbucks in 2012 still lies in further expanding of their business and making it even more diverse. It leads to a conclusion that all these opportunities will help Starbucks to maintain a leading position among other coffee chains in future.