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).

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omer-friendly service, the quality of its products, the variety of products offered, and link television advertising in prime time to its Internet site. The Third Step for Starbucks is to develop a series of catch phrases or slogans that are then incorporated into its television advertising. Kim (2000) has reported that Starbucks introduced a grab-and-go lunch menu in an attempt to capture market share. The firm does 50 percent of all sales prior to 11:00 A.M., and the grab-and-go lunch program should be expanded beyond the initial 400 stores that offered the service at the end of 2000. Linking television advertising to a "let's do lunch at Starbucks" promotion could increase business in the Starbucks stores. A related Fourth Step is to expand the lunch promotion from major markets into smaller markets, including locations in suburban grocery stores with high traffic volume. Kim (2000) notes that this effort allows the firm to augment its early morning coffee sales while also refining the program by incorporating local tastes and local flavors. A synergistic Fifth Step would include promotional couponing in local Sunday newspaper supplements and regional/city magazines. Starbucks' print presence has largely been limi
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Approximate Word count = 1832
Approximate Pages = 7 (250 words per page)