STARBUCKS COMPANY DIAGNOSIS 1 Essay Example

  • Category:
    Business
  • Document type:
    Research Paper
  • Level:
    Masters
  • Page:
    1
  • Words:
    507

Starbucks Company Diagnosis

Major Problems facing Starbucks Company

Financial Crisis

Currently Starbucks company is encountering financial crisis as a result global economy hence closure of huge number of stores across different states. Based on the press release, Starbucks had to close 23 of its stores in La Boulange location indicating that the stores are not sustainable for the Starbucks long-term growth. Additionally, on a similar argument, the Evolution Fresh Starbucks store was closed in San Francisco among other locations.

Starbuck problem on the tax backlash led to the annual sales dropping of sales to below £400million with a £14 million drop last year in Britain. Such an outcome was spearhead by public boycott indicating that the company has been using labyrinth of payments money overseas to countries such as Netherlands and Switzerland.

Intense Competition

Currently, the market indicates a rising number of numerous coffee shops such as McDonald’s, Costa Coffee and Caffé Nero. The new entrant’s products at a cheaper price hence affecting the standard prices set at the Starbucks company. Additionally, Starbucks tend purchase high quality coffee beans for the products at an expensive price, positioning the company to offer products and services at a higher price hence shifting the attention of customer to new entrants that offer their products and services at a cheaper price. Majority of the countries have different taxation policy on farmers producing coffee beans hence any fluctuations at coffee purchase price would certainly be passed to the customer, reducing customer’s loyalty to the company thus shifting to different companies.

Opportunities facing Starbucks Company

Expansion

Based on Analysis, Starbucks is facing the opportunities to expand its business across countries where the firm has minimal presences. Areas for the expansion are Middle East, Africa and Asia where the economy is currently thriving at a higher rate. Additionally, the company has the opportunity to advocate for new product mix while franchising the products into market hence diversifying on its products.

Technology

Due to the massive technology while consumers prefer in engaging with technological services for efficiency and effectiveness, Starbucks faces the opportunity to embrace technology for its business. As such, the company has the potentiality to advocate for Mobile Order and Pay application for its clients.

Market Potentiality

With an increasing number of population through income development, the consumption of coffee product is expected to be on the rise. As such, the market size will increase hence an opportunity for Starbucks company. Additionally, organization advocating for corporate sustainability towards coffee farmers showcase the likely opportunity for the production of coffee to be on the rice hence fair purchase price that both benefits Starbucks and coffee consumers.

Branding

Starbucks faces the opportunity of branding its name to new products into the market. The technique will be as a result of new product mix from the company, endorsement of its product and through new joint partnership with an already existing company or newer company. Additionally, the company can diversify its services to much more than food items tapping industries such as clothing and technological industry.