Starbucks Corporation is a highly profitable organization, earning over $600 million in 2004. The company generated revenue exceeding $5000 million in the same year. It is a globally recognized coffee brand known for its exceptional products and services. With nearly 9000 cafes spread across almost 40 countries, Starbucks was named one of the Fortune Top 100 Companies to Work For in 2005. Moreover, it is widely respected as an employer that values its workforce and upholds strong ethical values. Their ethical mission statement states, ‘Starbucks is committed to a role of environmental leadership in all facets of our business.’
However, Starbucks has a reputation for new product development and creativity and remains susceptible to potential challenges in sustaining their innovation. While the organization possesses a significant presence in the United States, with the majority of their cafes located within their home market, there is a suggestion that they should seek opportunities in different countries to mitigate business risk. Currently, Starbucks heavily relies on their main competitive advantage—coffee retail—and this could hinder their ability to quickly diversify into other sectors if necessary.
Opportunities
Starbucks has a talent for taking advantage of opportunities. Working together with Hewlett Packard, they launched a CD-burning service at their Santa Monica, California café in 2004, where customers could make customized music CDs. Moreover, Starbucks is constantly seeking new products and services to provide at their cafes, including Fair Trade items. The company has the capability to grow internationally by entering markets such as India and nations in the Pacific Rim. They also have the chance to collaborate with other food and beverage producers by co-branding and franchising their brand to manufacturers of various goods and services.
It remains uncertain whether the coffee market will continue to grow and appeal to customers, or if another beverage or leisure activity will take its place in the future. Starbucks faces potential challenges due to increased costs of coffee and dairy products. Since its establishment in Pine Place Park, Seattle in 1971, Starbucks’ triumph has attracted numerous competitors and imitators, which may pose threats to the company.
