Starbucks Operation Strategy

1499 words 6 pages


I. Expand its product offerings and enter new market segments * Starbucks expanded to pursue sales of products in a variety of distribution channels and market segments. Products were marketed to restaurants, airlines, hotels, universities, hospitals, business offices, country clubs, and select retailers. In the airline industry, Starbucks coffee was served in flights United Airlines and United Airlines. Packets of Starbucks coffee along with coffee making equipment were made available in each room in Hyatt, Hilton, Sheraton, Radisson and Westin Hotels. Coffee service was also provided in several Wells Fargo banks in California. Foodservice distributors such as Sysco Corporation
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* For coffee lovers, Starbucks introduced the new Pike Place Roast coffee blend and the VIA Ready Brew. The Pike Place Roast returned the company to the practice of grinding the beans in the store and it was brewed in small batches every 30-minutes to ensure that customer would be given the freshest coffee possible. VIA Ready Brew are packets of roasted coffee in instant form. It was instant coffee that embodied the taste, quality and flavor of freshly brewed coffee. It enabled Starbucks to enter the instant coffee market and attracted a large part of the on-the-go and at-home coffee drinkers.

* “Third place” (apart from home and work) where people could meet friends and family, enjoy a quiet moment alone with a newspaper or book, or simply spend quality time relaxing.

* One of Starbucks’ core competencies was identifying good retailing sites for its new stores. The company was regarded as having the best real estate team in the coffee bar industry and a sophisticated system for identifying not only the most attractive individual city blocks but also the exact store location that was best; it also worked hard at building good relationships with local real estate representatives in areas where it was opening multiple store locations. *

Analysis: In 2009, Starbucks’ overall retail sales mix was composed of 76 percent beverages, 18 percent food items, 3 percent coffee making equipment and other merchandise, and 3


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