A Competitive Strategy for Starbucks
In short order, Starbucks Corporation has become a premier purveyor of coffee and related beverages along with selected merchandise and has acquired almost universal domestic brand name recognition (MacArthur, 2001). Currently, Starbucks is engaged in a number of activities designed to expand its presence in the new global beverage market. Starbucks' growth strategy thus far has tended to emphasize positioning its stores in high traffic areas, including mini-stores located in hotels, upscale grocery stores, shopping mall food courts, and other ventures which are not free-standing (Kim, 2000).
The company has also adopted a highly aggressive globalization strategy to capitalize upon European tastes and interest in American coffee products (Moran, 1999). Equally significant, according to Moran (1999), is the company's emphasis on Starbucks' in-store experience of customer service. Company executives believe that this orientation has been the key to the firm's success, moving sales from a 1994 level of $284 million to over $1.3 billion in 1998. While Starbucks has also entered into joint ventures or alliances to penetrate the grocery market with its whole bean and ground coffees and Frappuccino, it is also using a new Internet presence to provide customers with online opportunities to purchase coffee and other food products as well as a growing range of kitchen and beverage accessories (Kramer, 1999).