Planet Starbucks — Case Study
Planet Starbucks – case study questions
1. Identify Starbucks strengths and weaknesses in the American marketplace. What are the critical challenges of marketing for Starbucks?
Starbucks strengths lie on the efficient management team that is talented, educated and eager to pass the information regarding the company products to the consumer (Jain & Haley, 2009). The loyal and dedicated employees resulted in excellent customer service and satisfaction. As one of the fastest growing brand, Starbuck developed a unique branding name that led to the popularity of its fine products and services. The outstanding performance in customer service provided the company with a solid reputation.
Despite having a variety of strengths, there were points of weakness that are worth being noted. The company had a less special place for the workers (Jain & Haley, 2009). As a result, there was reduced employee morale among the company’s store managers and baristas. The company conducted dynamic innovations, but there was a possibility that these innovations would fail with time.
Starbucks was faced with various challenges in the American market. One major challenge was winning the future consumers. Most of these individuals were discouraged by the power and image of the company’s brand. Increased competition and insufficient knowledge in conducting business in a market where consumers are price sensitive are among the challenges the company faces during marketing.
2. Match Starbucks relative strengths with the opportunities that present themselves in the Australian market.
Starbucks is presented with a variety of market opportunities from numerous sources. As a strong and popular brand, Starbucks has the opportunity of becoming a successful coffee chain in the Australian market. Partnership with the Australian local businesses would be a great way of achieving the company’s vision. The strategic alliances and partnership would enhance Starbuck’s competitive position. Introducing the new products and services would be a way of boosting the company’s sales in Australia. Adding energy drinks to the company’s main menu would diversify the product portfolio and diversify risks in case coffee sales start dropping. As a company that is good at taking opportunities and filling gaps in the market, the company would think of venturing into the production of DVDs and proprietary food products alongside providing coffee to the customers, Starbuck would venture into the production (Jain & Haley, 2009). Despite the fact that Starbucks have a considerable product mix, diversification would enhance its competitive advantage. Technology is continuously improving. Technological advancement will make business operations within the company to be quicker, faster and improved. As a result, the technological advancements will help towards achieving a concrete coffee business in Australia.
3. Critically evaluate and enhance Starbucks’ current marketing strategy in the Australian and New Zealand markets.
Starbucks applied the customer driven marketing strategy in the Australian and New Zealand markets. Starbucks understands what the consumers need. The focus on what customers need led the company to earn more clients who visit Starbuck outlets. By developing the Starbucks Express, Starbucks eased the ability of customers to shop from wherever they are. The website assisted the customers to pre-order and pre-pay for products. The company also used the marketing mix strategy that enabled the company to achieve the position of being a leading coffee store. Starbucks utilized this strategy to develop its image and gain more popularity. Starbucks focused on the production of Coffee, Tea, Pastries, Smoothies and Frappuccino as the major products. Starbucks ensured that consumers could access their products and services through cafes, online store, Starbucks app, and retailers. Starbucks communicated and promoted its products and services through advertisement, public relations, and sales promotion. The company considered the behavioural tendency of the consumers when implementing the premium marketing strategy. The company offered its consumers coffee products that are expensive compared to other competitors such as MC Donald. The pricing strategy ensured that the company maintains its high-end brand image.
4. How is Starbucks strategy comparable to that of their major competitors? What are the key differences and how do these differences enable both firms to coexist?
There are various companies which are close competitors to Starbucks. Most of these competitors design their pricing strategy to make customers perceive the products to be of high quality that comes with reasonable prices. On the other hand, Starbucks’ products are expensive to maintain its image of being a high-end brand. Drinks are the main product line for Starbucks while other competing firms involve in multiple segments such as breakfast, lunch and evening dinners. For instance, McDonald caters for families and has well-established menus while Starbucks is for the affluent. Despite these remarkable differences, these firms coexist. This is because competitors have different optimum price levels for a specific end product for a particular group of consumers. Consumers have the habit to search for possible substitution. The competitors have to coexist to offer the substitutes that may be needed by the consumers. Also, competitors have different capabilities that are unique and inimitable. These capabilities help in the efficient production of goods and services where other companies are inefficient. Moreover, the competitive business environment assists competing firms to exist and succeed in their chosen product areas.
Jain, S. & Haley, G. (2009). Marketing planning and strategy. Mason, Ohio: Cengage Learning.