Competitive Strategy and Starbucks
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Before any suggestions can be made to Starbucks concerning what they should do to remain competitive, it is essential to determine where they are at the current time. According to its annual report, its web site and Hoover's Online, the company's chairman Howard Schultz, estimates the coffee company will hit 20,000 stores before its reign is over. "It is the US's #1 gourmet coffee purveyor with nearly 4,000 locations in the US and about 20 other countries" (Hoover's Online). The coffee shops are ubiquitous and are located almost wherever there is free space in office buildings, shopping centers, airports, and bookstores. "Starbucks' strategy is simple: Establish its name everywhere. Having conquered the US, the company is invading Europe, where it plans to enter at least six new countries and open an additional 650 stores by 2004" (Hoover's Online). Here is a summary of its sales for the year 2000. These sales results give one benchmark of the company's competitive advantage. Almost 90 percent of its revenues come from the US, a market that it basically created, and one that is now being exploited by strong competition. It's desire to open overseas, seeing the Non-US territories as conducive to profits suggests that this is the area in which a competitive strategy can be instituted. Before
. . .
he Best of Ken Burns JAZZ CD
Low
Very High
Blending the Blues II CD1
Low
Very High
Songs of the Siren CD
Low
Low
Sweets
Chocolate caramels
High
Very High
Fontana flavored syrups
High
Very High
Quaresimali
Low
Low
Sugar cubes
Average
Very High
Teas
Tazo
Low
Very High
Finally, we must build our strategy based on the competition, and the resources available to them to compete. The resources will include Capital, Distribution, and Market Penetrations.
Competitor
Capital
Distribution
Market Penetrations
ABP
High
Solid
Europe, US
Nestlé
Very High
Good
Europe, US, Asia
AFC Enterprises
High
Good
Europe, US, Asia
New World Coffee
Very High
Solid
Worldwide
Allied Domecq
Weak
Solid
US, Europe
Panera Bread
Weak
Weak
US
Diedrich Coffee
High
Solid
US, Europe
Peet's
Medium
Good
US
Farmer Bros.
High
Solid
US
Planet Zanett
Weak
Weak
Southeast US
Green Mountain Coffee
Weak
Weak
West Coast
Pret A Manger
High
Solid
US, Europe, Asia
Kraft Foods
Astounding
Solid
Worldwide
Procter & Gamble
Astound
. . .
Some common words found in the essay are:
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Approximate Word count = 1259
Approximate Pages = 5 (250 words per page)
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