Starbucks Corporation is a well-established retailer of specialty coffees, primarily selling fresh, rich brewed coffees, Italian style espresso beverages, pastries and confections, coffee related accessories and equipment, and a line of premium teas. Products are sold through company operated retail stores, specialty operations, and an online store. Operating primarily in the United States, Starbucks is headquartered in Seattle, Washington and until recently employed 172,000 individuals (Data Monitor, 2008a).
Starbucks is positioned in what Data Monitor (2008b) characterizes as the domestic hot drinks market although it also retails a variety of products and accessories that are not directly related to this market segment. Data Monitor (2008b) reported that the hot drinks market in the United States grew by 0.6 percent in 2007, reaching a value of $9,120.5 million. It is expected that by 2012, the domestic market will have a vale of $9,711.4 million, up 6.5 percent over 2007.
The purpose of this analysis is to examine the environment in which Starbucks functions, including the social, cultural, political, technological, and demographic aspects that impact upon the company. Next, a competitive analysis of Starbucks from a microeconomic perspective will be presented, followed by a summary of the organization's current situation and the identification of three to four strategic long-term objectives that should be integrated into a companywide strategic plan.
The Remote Environment of the Firm
Data Monitor (2008b) identified the hot beverage sector as dominated by the sale of coffee, which accounts for 70.4 percent of the market's total value. Supermarkets and hypermarkets form the dominate distribution channel in the domestic hot drinks market, accounting for 76.6 percent of the market's volume. The largest players in this market will be discussed in detail below, but Starbucks owns an 11.5 percent share of...