Starbucks Brand Fact Book Report: Business Development Analysis

This comprehensive report provides a detailed analysis of the Starbucks brand, encompassing both external and internal factors. It begins with an executive summary outlining the report's objectives and structure. Part 1 delves into the external and internal environments, utilizing PESTLE analysis, Porter's Five Forces, and SWOT analysis to assess political, economic, socio-cultural, technological, and legal impacts, as well as competitive dynamics, strengths, weaknesses, opportunities, and threats. Part 2 explores Starbucks' strategic approach, including its mission and vision statements, application of the Ansoff Matrix, and Porter's Generic Strategies, with a focus on differentiation and intensive strategies like market penetration and product development. Part 3 examines the target market, segmentation, targeting strategies, and positioning strategy. Part 4 then outlines the marketing mix, including product, price, place, and promotion strategies. The report concludes with an overview of the brand's overall performance and strategic direction, supported by relevant references.

Running head: STARBUCKS BRAND FACT BOOK
Starbucks Brand Fact Book
Name of Student:
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Author’s Note:

1STARBUCKS BRAND FACT BOOK
Executive Summary:
The aim of this report is to provide a Starbucks brand facts book which provides a
detailed review of all the aspects of the Starbucks Company. The detailed external and internal
analysis of the company including the SWOT analysis, PESTEL Analysis and Porter’s Five
Forces has been mentioned. The mission and vision statement of the company are discussed in
detail. The Ansoff Matrix and the Porter’s Generic Strategies have been discussed in detailed.
The target market and the marketing mix has been discussed which have been explained clearly.
The conclusion states the overview of the brand as a whole.

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Table of Contents
Introduction:....................................................................................................................................5
PART 1: External and Internal Analysis:........................................................................................6
PESTLE Analysis:...........................................................................................................................6
Impact of Political factors on Starbucks:.....................................................................................6
Impact of Economic Factors on Starbucks:.................................................................................6
Impact of Socio-Cultural Factors on Starbucks:..........................................................................6
Impacts of Technological factors:...............................................................................................7
Impact of legal factors:................................................................................................................7
Porter’s Five Forces:........................................................................................................................7
Threats of new entrants: Moderate:.............................................................................................7
Threat of substitutes: Moderate to high:......................................................................................8
Bargaining power of buyers: Moderate to low:...........................................................................8
Bargaining power of suppliers: Low to moderate:......................................................................8
Competitive rivalry: moderate to high:........................................................................................8
SWOT Analysis:..............................................................................................................................8
Strengths:.....................................................................................................................................9
Quality profitability and ethicality:.........................................................................................9

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Efficiency and strategy for reinvestment:................................................................................9
Employee treatment:................................................................................................................9
Weaknesses:...............................................................................................................................10
High Price point:....................................................................................................................10
Lack of products that are too unique:....................................................................................10
Opportunities:............................................................................................................................10
Global expansion:..................................................................................................................10
Introducing new products and co-branding:..........................................................................11
Threats:......................................................................................................................................11
Fierce competition from other cheap alternatives:................................................................11
A specific market:..................................................................................................................11
PART 2: Strategy:..........................................................................................................................12
Mission and Vision:...................................................................................................................12
Starbucks’ Vision Statement:................................................................................................12
Starbucks’ Vision Statement:................................................................................................12
Ansoff Matrix:...........................................................................................................................13
Existing product and existing market (Market penetration):.................................................13
Existing market and new product (Product Development):..................................................13
New Market and existing product (Market Development):...................................................13
New Market and New Product (Diversification):..................................................................13

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Porter’s Generic strategies:........................................................................................................14
Differentiation for competitive advantage:............................................................................14
Quality based differentiation at Starbucks:............................................................................14
Ethical and customer friendly brand image:..........................................................................14
Intensive Strategies:...................................................................................................................15
Market penetration:................................................................................................................15
Market development:.............................................................................................................15
Product development:............................................................................................................15
PART 3: Target Market:................................................................................................................15
Segmentation:............................................................................................................................15
Targeting:...................................................................................................................................16
Positioning strategy:..................................................................................................................16
PART 4: Marketing Mix:...............................................................................................................17
Product:......................................................................................................................................17
Price:..........................................................................................................................................17
Place:..........................................................................................................................................17
Promotion:.................................................................................................................................18
Conclusion:....................................................................................................................................18
References:....................................................................................................................................20

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Introduction:
Starbucks is the largest coffee house chain of the word. It operates in more than 20000
locations all over the world. Since the time of the foundation of the chain in the year 1971, in
Seattle, Starbucks has been providing hot and cold beverages in addition to the snacks. This
conglomerate organisation has lengthened into the selling of branded products like packaged
coffee, other gifts like mugs and coffee machines. The analysis of Starbucks clearly shows that
there is much more prosperity in future for this famous corporation.
The Company is not just a passionate purveyor of coffee but everything else which is
inclusive of a complete coffeehouse experience. The company also provides a choice of premium
teas, tasty pastries and other treats which are pleasing to the person. The music in the store is also
appealing and artistic. It is very likely for people to come to the store to chat meet up or even
work. The company makes sure that that everything is done on humanitarian grounds. This is the
way engagement is done with customers and communities for performing business responsibly
and effectively. From the beginning the Starbucks started out as a very different company. The
innovation and the continuous efforts of the people at Starbucks is responsible for the brand
value of the company.
Despite the inflated prices the brand has been capable of creating create a sense of brand
loyalty and variety of followers who are loyal. Coffee is a more or less homogeneous item where
Starbucks have been capable of marketing their standards well. They have been successful of
portraying a lifestyle of luxury. The operation of Starbucks is in a monopolistically competitive
environment and market structure were they were successful in maintaining a control over the
inflated prices. With the usage of the Starbucks logo, quality and other trademarks, the company

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differentiates its coffee with that of its competitors. The strategy of the company to focus on the
core competencies and to establish the brand as a powerhouse of coffee is important.
PART 1: External and Internal Analysis:
PESTLE Analysis:
Impact of Political factors on Starbucks:
The major factor is the sourcing of raw materials and there is also the need to abide by
rules and regulations in the countries from where the company sources its raw materials. There
are certain authoritarian pressures within the home market in the United States as well. Some
other factors worth considering are the tax policy and laws of employment (Tu, Wang, & Chang,
2012).
Impact of Economic Factors on Starbucks:
The financial recession world is the major external financial drive for Starbucks. This
factor has reduced the profitability of Starbucks and has convinced the buyers to shift to other
cheaper alternatives. The rising labour and economic factors have also to be looked into. Other
economic factors are local exchange rates, the local fiscal environment in different markets and
the taxation level (Burkitt, 2012).
Impact of Socio-Cultural Factors on Starbucks:
The major socio cultural challenge that the company faces is the sacrifice of the quality in
case it has to offer cheaper products. The social and environmental costs of the brands are also
facts of concern. Other factors are the change in the family patterns in USA and Europe, the
preferences of the customers, the changing patterns of work, the changes in the lifestyles or

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population, the education level in the domestic markets and the changing values among the
population (Burkitt, 2012).
Impacts of Technological factors:
The company has introduced Wifi capabilities in the outlets. The importance of internet
to the customers is extremely important in the present world of technological advancement.
Some other technological factors are emergence of innovative technology, the biotechnological
developments as well as the developments in agriculture.
Impact of legal factors:
Starbucks must not forget to ensure that no laws and regulations are violated. The other
legal factors that might impact the organisation are the introduction of much more strict custom
and regulations of trade and also the license of regulations which are linked to the industry
concerned.
Porter’s Five Forces:
It is an easy yet suitable tool for the analysis of the competition level in the industry
which helps in the analysis of the forces which influence the competitive positioning of a
business firm.
Threats of new entrants: Moderate:
The threat of new entries for Starbucks is more or less insignificant. The barriers are not
very high and it is to be understood that the initial investment for the starting of a coffee brand is
not high either. There is the access to suppliers and access to raw materials for Starbucks. These
contribute to moderate threat level due to new entrants.

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Threat of substitutes: Moderate to high:
The substitutes for the Starbucks coffee brand is quite high. There are several substitutes
available in the market including juices, tea and alcoholic beverages. The homemade products
that consumers make are also substitutes to the products of the company.
Bargaining power of buyers: Moderate to low:
The suppliers can exert only a moderate amount of pressure on Starbucks. It is because
the own diversity policy utilized to select the suppliers is possessed by the brand. The great
relationships established by the company with the tea and cocoa farming companies can reduce
the mediators and suppliers (Haskova, 2015).
Bargaining power of suppliers: Low to moderate:
The suppliers can exert moderate to little pressure on Starbucks. There is the brand’s own
supplier diversity policy which is used to select the suppliers. The excellent supply chain
management has improved the bargaining power of the suppliers and gave it as a low amount.
Competitive rivalry: moderate to high:
The intensity of the competition in the industry is comparable as moderate to high. There
is monopolistic antagonism in the industry and the brand of Starbucks possesses the highest
market share. There is always industry room for new players which is responsible for the
intensity of competition.
SWOT Analysis:
The analysis of Starbucks Company is presented below:

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Strengths:
It can easily be said that Starbucks has been doing the basics right since they manage to
create a great brand image for themselves and take home millions of dollars every year. The
profits also grow at high rates from year to year.
Quality profitability and ethicality:
Starbucks is responsible for establishing themselves as a premium coffeehouse chain in
the world. This has been established despite their presence in comparison to that of other existent
fast food chains. The products of the company are of excellent quality, seemingly friendly as per
environment standards and also maintain consistency between each of these locations. Because
of all these reasons they can charge the customers high prices which maximum of the people are
even willing to pay. Not only does this mean there are high profits for the company but they are
also globally understood as the most famous coffee shop chains in the world.
Efficiency and strategy for reinvestment:
Majority of the profits that the company makes is responsible for going straight to the
expansion of the business. This is clear from the continually increasing number of locations
which the company boasts about. It is extremely clear that there is a well planned growth
strategy with the company which is seemingly well working for them (Thompson, 2017).
Employee treatment:
The most important factor for any company is the way in which it treats its employees.
Starbucks is all the more well known as the company treats its employees extremely well being
listed as the Fortune’s Top 100 places to work for.

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Weaknesses:
It is natural for every company to have some weaknesses. Just like other top companies
of the world, Starbucks also has certain weaknesses. The weaknesses are discussed as follows:
High Price point:
The high price point of the company is more of a weakness than a strength. The huge
price tags on certain products are responsible for deterring several customers which might
otherwise make the Starbucks Company a part of day to day activities. Though the high quality
and proper ethical values of the company might be striking some people just do not have that
much of money for spending on a cup of coffee (Taecharungroj, 2017).
Lack of products that are too unique:
The frappucinos, pumpkin spice lattes and big chocolate chip cookies that the company is
famous for do not possess the most unique market. Several other coffee shops, chains, give
similar products but lose out only to Starbucks’ big name.
Opportunities:
The global coffee chain does have huge number of opportunities for the future which are
explained as follows. The opportunities are:
Global expansion:
Starbucks has several coffee houses around the world most of which are situated within
the United States. There are several regions which keep profitably branching out as a chance
considering India, central Europe and certain regions in Africa.