Starbucks Market Conditions – Present and Future

5376 words 22 pages
Starbucks Market Conditions – Present and Future
Starbucks is a multinational coffee and coffee house chain company founded in 1971 and based in Seattle, Washington. Starbucks is the largest coffeehouse company in the world, with 15,011 stores in 42 countries. Starbucks sells drip brewed coffee, espresso-based hot drinks, snacks and items such as mugs, and of course their well renowned coffee beans. This analysis will provide an overview of Starbucks and its industry; examine the current market and future market conditions and suggestions for maximizing the organization’s future profits and growth.
Starbucks has expanded rapidly over the years, opening a new store every workday during the 1990’s. The first Starbucks location outside of
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The success comes down to consumer brand preference and loyalty, which Starbucks has a strong advantage with.
Starbucks’ primary competitors are Dunkin Donuts, McDonald’s and Krispy Kreme. Due to the success that Starbucks has enjoyed, many different independent coffee shops have also been created to try to tap into the market and compete with Starbucks. Entry into the market is not very difficult because there are very few barriers.
There is no denying that the price of a cup of coffee at Starbucks is much more expensive than a cup of coffee at McDonalds. On average, a drink at Starbucks is $3 to $4, but a large coffee at McDonald’s costs less than $1.50. So, why does Starbucks get more customers? It’s the other elements that the company offers; the atmosphere of the store, the Wi-Fi service, the couches and over-stuffed chairs and the wide offering of bakery products to accompany the cup of coffee. This is much more pleasing to a consumer rather than sitting in a hard plastic booth with a clown face on the red and yellow walls.
One of the most influential factors in Starbucks success can be attributed to the technological advantages it has over other coffee chains and shops. It has Information Technology (IT) systems in place equivalent to what you would see with large companies like IBM or Bank of America. In 2002 Starbucks introduced a prepaid Visa debit card that can be used to pay for purchases


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