Starbucks Analysis - Starbuck's Mission and Strategy

Starbucks Analysis

* Starbuck's Mission and Strategy:

Starbucks Company, headquartered in Seattle, WA has experienced increasingly significant growth since its initial opening in 1971, and becoming a publicly traded company in 1992. This growth can be attributed in part to its mission. Starbuck's strives is to establish the company as the premier provider of the finest coffee in the world, while simultaneously maintaining their values, and continuing growth, and providing the "Starbucks Experience". Starbucks also focuses on maintaining loyalty and repeat business from its target market.

Their original strategy was to educate their customers about superior coffee. This has been something they have been very successful in, almost too successful in the fact that they have lost customers to the pursuit of finer coffee. And since hitting a major slump in 2007-2008, Starbuck's has started to change their focus and strategy. And with many other companies in the market and fierce competition, this is exactly what Starbucks needs to do. An article from The Seattle Times reports on how Starbucks has changed their strategy, and put more focus into diversifying and "expanding the number of foreign stores, introducing new Starbucks products like Via instant coffee in grocery and convenience stores all over the world, and reinvigorating Seattle's Best Coffee (a secondary brand that for years was an afterthought." So their strategy has not only focused on international expansion, but also on their product line, and creating a variety of products.

* Challenges that Starbucks are currently facing:

Starbucks is facing many potential challenges from increased competition, in such a price sensitive market. Not only does Starbucks face competition from other specialty coffee shops such as Caribou Coffee and Tully's Coffee, but has recently seen a surge in competition from other retailers such as Dunkin' Donuts and McDonalds. Not only does Starbucks face challenges when it comes to retail competition, but has also seen challenges because of people brewing high quality coffee in their own homes; just to save a buck. Starbucks had problems adapting to changes in the environment and changing their strategy when the recession hit. But when it comes to this industry, Starbucks is the first. I think that competition may have some difficulty catching up with lead that they have over their competition.

* Ratios/Statistics:

The July 28, 2011 financial release of third quarter 2011 results of Starbucks Corporation are looking stronger than expected, with an increase in total net revenues of 12%. As well as an increase 33% increase in EPS.

* Third-quarter profit increased 34% to $279.1 million.

* Sales rose 12% to $2.93 billion.

* Starbucks: $10.7 billion in sales for the year ended Oct. 3, 2010. Dunkin' Donuts: $6 billion for year ended Dec. 25 2010 (this figure is sales by Dunkin' Donuts franchisees not Dunkin' Brand revenue).

* About 21% of Starbucks total revenue in its most recent fiscal year comes from its international segment.

* Starbucks has listed the following fiscal 2011 targets;

o Growth of revenue of approximately