Business Management: Analysis of Business Positioning Strategy of Starbucks

Running head: Business management
Business management
Name of the student
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Author note

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Part – 1
Introduction
Operational concept of the business
Based in United States, Starbucks is one of the largest coffee house companies across the
globe. Founded in the year of 1971, the company opened its first outlet at Western Avenue of
Seattle and later shifted in Pike Place. The company started expanding its business outside of
North America in the year of 1996, in Tokyo, Philippines and Mexico respectively
(Starbucks.com, 2018). Beside of coffee, during late 1990s, the company also had started
experimenting with eateries and achieved success in conquering international markets. Presently
Starbucks is spread among 20891stores over 64 different countries across the world. Starbucks
holds the leading position among the coffee houses all over the world. The company has gained
reputation of the premium coffee house for its quality product delivery at a premium price range
since it founded.
Product/s and service/s offered to guests/customers
The Starbucks is mainly well known for serving coffee. However, the company offers
other hot and cold beverages, whole bean coffee, instant coffee which is well-known by
espresso, caffe latte, full and loose leaf teas, Teavana tea, Frappuccino beverages, Evolution
fresh juices and snacks. La boulange pastries are the most popular among snacks offered by
Starbucks. Apart from that, Starbucks also serves different types of crackers, chips, sandwiches,
ice-cream and so on (Starbucks.com, 2018).The most attractive part is that the coffee mug in
which the company serves coffee is incripted with the customer’s name.

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Geographical location/s of operation/s
The oldest and main retail outlet of Starbucks is in Seattle in the United States of
America. As of 2017, there are more than 13000 retail outlets of Starbucks in United States of
America, out of which 8222 stores are owned by the company and rest 5708 stores are company
franchise (Starbucks.com, 2018). Apart from that, Starbucks has stores in every metro city across
the world. The company designs its product range keeping geographical locations of the stores in
mind (Statista.com, 2018). For example, the company’s outlets in the Asian countries have
designed their menu keeping the taste of the Asian people in mind. However, some signature
dishes are same in each outlet.
Key market/s and segments
Type Criteria Segment
Geographic Region
Density
United States, Asia,
Middle East, Europe, L. America
and Asia Pacific.
Urban
Demographic Age
Gender
Occupation
18 – 60
Both male and female
Students and
professionals, mainly the target
customers are from the affluent
class.
Key markets US, China, Japan, Canada, United Kingdom, Thailand, South
Korea, Mexico, Philippines and Turkey.

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Source: (Created by author; Starbucks: international and U.S. stores, 2017 | Statistic,
2018)
Part - 2
Business positioning strategy
The study aims to give thorough analysis of the business positioning strategy of
Starbucks. Thus, in order to discuss that the paper sheds light on the existing market
segmentation of the company inclusive of market size, location, customer base and trends. The
study further elaborates on the marketing, promotional strategy and sales technique of the
company. The study also additionally highlights the existing capabilities of the company and
other aspects related to positioning strategy like leadership, competitive advantages, competition
and so on. Finally, the study concludes by summing up the whole discussion.
Existing markets and segment
Starbucks mainly targets the premium customers by offering quality products as well as
service. By discussing the segmentation and market in which the company operates in, it can be
understood that who are the target customers of the company and how the company positions its
products in the global market. The positioning strategy and target market of Starbucks is as
follows (Martinroll.com, 2018):
Demographic segmentation
Age
25-40 years – 49%

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18-24 years – 40%
13-17 years – 2%
As per the annual report of the company, the target audience rate increases by 3% every
year (Annual reports, 2018).
Gender
Both male and female customers are the target customers of company (Starbucks.com,
2018).
Occupation
The company targets the students as well as professionals and the white collars as it
offers products at a premium price. 12-ounce “tall” brewed coffee costs around
$1.75 and $2.15which are not affordable by the customers of lower middle class in a regular
manner (Starbucks.com, 2018). Thus the people of affluent class are the major customer of the
company out of which business professionals are the primary target customers of the company.
Geographic segmentation
Starbucks holds 33% market share from Unites States of America solely (Statista.com,
2018). However, more than 13000 coffee shops under the brand name are scattered in more than
30 countriesall over the world (Starbucks.com, 2018). Aiming to become one of the most
recognized coffee shop brands across the world, Starbucks uses effective positioning strategy
(Statista.com, 2018). The company presently relies on the expansion strategy in addition with the
strategy of innovation in terms of service and products in order to achieve further growth and

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success of the company (Forbes.com, 2018). Presently, the company is focusing on Asian
markets seeing the potential of the Asian market (Pinto, 2018).
However, in terms of positioning, there types of positioning are followed by the
company: mono segment positioning, adaptive positioning and standby positioning.
Mono segment positioning: The coffee house company exclusively targets the affluent
people so that they will be able afford to pay for their premium priced products in a regular
manner (Rothaermel, 2017).
Adaptive positioning:Since health trend is one of the major concerns for food and
beverage industry, Starbucks gives special attention to that. Thus, keeping in mind the health
trend in mind, the giant coffee chain company added less calorie products in its menu like Café
Misto does not contain more than 63 calories, Chai Tea Latte containing 103 calories and
Americano is the beverage that contained least amount of calorie (Rothaermel, 2017).
Standby positioning strategy: Starbucks considers the demand in market and then adds
new products to its menu. The demand of the customers or the product customers want the
company to introduce in market is researched before a product is launched by the company
(Rothaermel, 2017). For example, the product called Frappuchino had to wait for too long before
it was launched in the market. Even after it was launched it had been gone through many changes
and innovations to meet the demand of the market.
Marketing and promotion strategy i.e. marketing mix; promotional tools; distribution
channels; use of intermediaries