starbucks essay introduction

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Strategic and competitive advantages

The early years, the howard schultz era, schultz steps down, but not for long, revolving door of ceos.

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Starbucks is an American company that operates the largest coffeehouse chain and one of the most recognizable brands in the world. Headquartered in Seattle , Washington, the company operates more than 35,000 stores across 80 countries (as of 2022).

Although Starbucks was not the first major coffeehouse chain in the U.S., it was the first to both popularize and mass-distribute a particular brand of café culture . Starting in the 1990s, Starbucks began promoting coffee as a holistic experience that combined ambiance, community, function, and lifestyle. By transforming people’s perception of coffee and coffeehouses, Starbucks achieved outsize growth and established itself as one of the most dominant names in the coffeehouse industry.

Starbucks’ dominance among coffee retailers can be traced to several key strategic initiatives and competitive advantages, including:

• Promotion of coffee as a social and cultural experience. By focusing on the quality of its coffee beverages and the ambiance of its coffeehouse environment, Starbucks was able to reframe coffee as an affordable luxury that can be enjoyed in a social space, or a “third place” away from home and work. Starbucks cafés became a popular space for social gatherings, small business meetings, studying, and working. Starbucks gained a first-mover advantage in the café market by being among the first to curate, define, and mass-distribute its own brand—of coffeehouse culture.
• Saturation strategy. Starbucks deployed a saturation strategy based on factors such as population density, income levels, proximity to other businesses, amenities, and competition, and overall foot traffic patterns. This helped Starbucks achieve geographical dominance without market cannibalization (i.e., new Starbucks outlets taking business from existing outlets).
• Product innovation. Starbucks has consistently experimented with new product offerings and flavors. The company’s Tryer Center, located in Seattle, Washington, is its main “innovation lab,” where it develops and tests new products and services.
• Vertical integration. Unlike many of its direct competitors, Starbucks’ coffee supply chain is vertically integrated from coffee estate, to roasting, and into a beverage cup. This allows Starbucks to exercise greater control over costs, processes, and quality. It also helped establish the company’s global economies of scale .

Starbucks was founded by Jerry Baldwin, Gordon Bowker, and Zev Siegl, opening its first store in 1971 near the historic Pike Place Market in Seattle . The three Starbucks founders had two things in common: they were all coming from academia, and they all loved coffee and tea . They invested and borrowed some money to open the first store in Seattle and named it “Starbucks” after the first mate, Starbuck, in Herman Melville ’s classic novel Moby Dick .

Alfred Peet, a coffee-roasting entrepreneur, was a major inspiration to the founders of Starbucks. Peet was a Dutch immigrant who had begun importing fine arabica coffees into the United States during the 1950s. In 1966 he opened a small store, Peet’s Coffee and Tea, in Berkeley , California, that specialized in importing first-rate coffees and teas. Peet’s success encouraged the Starbucks founders to base their business model on selling high-quality coffee beans and equipment, and Peet’s became the initial supplier of green coffee beans to Starbucks. The partners then purchased a used roaster from Holland, and Baldwin and Bowker experimented with Alfred Peet’s roasting techniques to create their own blends and flavors.

By the early 1980s Starbucks had opened four stores in Seattle that stood out from the competitors with their top-quality fresh-roasted coffees. In 1980 Siegl decided to pursue other interests and left the two remaining partners, with Baldwin assuming the role of company president.

In 1981 Howard Schultz , a sales representative for Hammarplast, a Swedish company that made kitchen equipment and housewares from which Starbucks bought drip-coffee makers, noticed how large the company’s orders were, which prompted him to pay it a visit. Schultz was so impressed that he decided to pursue a career at Starbucks, and he was hired as the head of marketing in 1982. Schultz noticed that first-time customers sometimes felt uneasy in the stores because of their lack of knowledge about fine coffees, so he worked with store employees on developing customer-friendly sales skills and produced brochures that made it easy for customers to learn about the company’s products.

Schultz’s biggest idea for the future of Starbucks came during the spring of 1983 when the company sent him to Milan to attend an international housewares show. While in Italy , he was impressed with the country’s cafés and discovered that Milan alone boasted 1,500 coffeehouses. Inspired, he thought of doing something similar in Starbucks and envisioned turning a tiny regional operation into a national coffeehouse chain via rapid store expansion. However, Baldwin and Bowker were not enthusiastic about Schultz’s idea, as they did not want Starbucks to deviate much from its traditional model of business. They wanted Starbucks to remain strictly a coffee and equipment seller and not turn into a café that served espressos and cappuccinos.

Essentially, while Baldwin and Bowker homed in on coffee as an artisanal “product,” Schultz envisioned it as a medium for social connection and interaction (i.e., “coffee culture”). This distinction bore profound implications from a market perspective: Branded products can engender loyalty, but the appeal for branded experiences can be localized, customized, and ultimately, self-generated or customer-driven (what would later be referred to as “brand tribalism”).

Seeing that he would not be able to persuade Baldwin and Bowker to embrace the café idea, Schultz left Starbucks in 1985 and started his own coffee chain, called Il Giornale, which was an immediate success, quickly expanding into multiple cities.

In March 1987 Baldwin and Bowker decided to sell Starbucks, and Schultz was quick to use Il Giornale to purchase the company with investor backing . He combined all his operations under the Starbucks brand and committed to the café concept for the business, with additional sales of beans, equipment, and other items in Starbucks stores.

Under Schultz’s guidance, in four years the coffeehouse chain grew from fewer than 20 stores to more than 100. Starbucks entered into a meteoric period of expansion that continued after the company went public in 1992. In 1996 it began opening stores outside North America , and Starbucks soon became the largest coffeehouse chain in the world. By the end of the decade, Starbucks had some 2,500 locations in about a dozen countries.

Schultz announced in 2000 that he was stepping down as CEO but would remain as chair. By 2007 the chain boasted more than 15,000 locations worldwide, but it also began foundering with regard to customer satisfaction, brand focus, and employee morale. This prompted Schultz to return to the helm as Starbucks’ CEO in January 2008.

Several factors contributed to Starbucks’ continuing decline in 2008. The most prominent were likely the economic environment leading up to and following the Great Recession , over-expansion leading to cannibalization, and increased competition from other coffeehouse chains and fast food restaurants, such as McDonald’s , which began serving a more diverse range of coffee beverages.

In response to the company’s challenges, Schultz oversaw the closure of 900 stores and implemented an ambitious strategy to secure new avenues of growth, which included acquisitions of a bakery chain and the makers of a coffee-brewing system as well as the introduction of an instant-coffee brand. He also oversaw changes to menu offerings at Starbucks stores; Starbucks had begun selling food in its cafés in 2003. These moves were largely successful, and by 2012 Starbucks had rebounded financially.

Schultz again stepped down as CEO and was replaced as CEO by Kevin Johnson in 2017. Schultz continued to be active in the company, serving as executive chairman until 2018, when he was replaced by Myron Ullman.

Meanwhile, the company’s global growth strategy continued. The world’s largest Starbucks, a Starbucks Reserve Roastery, opened in Chicago in 2019. By 2021 Starbucks had a presence in dozens of countries around the globe and operated over 32,000 stores.

During this time, however, Starbucks began to face various challenges. Notably, workers at several of its stores began to unionize, despite opposition from the company. In addition, the COVID-19 pandemic and related supply-chain issues had a negative impact on sales, especially in China , one of the company’s key markets. In 2022 Johnson abruptly departed, and Schultz returned as interim CEO.

Later that year Starbucks announced that it had hired Laxman Narasimhan, who would replace Schultz in 2023. Although Schultz had handpicked Narasimhan as his successor, after a period of languishing sales and challenges with speed of service, particularly among mobile order pickup customers, in May 2024, Schultz sent an open letter to the board, highlighting the need to fix certain customer service practices in order to “win back customers.”

In August 2024 Narasimhan was ousted as CEO and by the following month would be replaced by Brian Niccol, who was at the time CEO of Chipotle Mexican Grill (CMG). Shares of Starbucks rose 24.5% on the announcement, the largest one-day move in company history.

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The History of Starbucks: From Founding to 2024, A Complete Guide

To say that Starbucks is a household name is a hilarious understatement. Starbucks is not just one of the world’s most well-known coffee brands; it’s one of the most well-known brands, period. It’s hard for younger people to imagine a world without Starbucks, and even some older folks might not remember what it was like before there was a Starbucks on every major corner in town.

In this article, we’re going to walk through the history of the coffee giant Starbucks. How did Starbucks get started? Who owns Starbucks? Is it a chain, or not? We’ll answer all these questions and more in this complete Starbucks history.

• When Was Starbucks Founded?

Starbucks was founded in 1971 in Seattle, Washington, by Jerry Baldwin, Zev Siegl, and Gordon Bowker. The three founders met as students at the University of San Francisco. The history of Starbucks is inextricably linked with another coffee company. Baldwin, Siegl, and Bowker were taught how to roast coffee by Alfred Peet, founder of the world-famous Peet’s Coffee & Tea .

The name Starbucks was agreed on by the three founders after a brainstorming session focused on coming up with as many words starting with the letters “st” as they could. Gordon Bowker owned an advertising agency and wanted to focus on “st” names since he thought they were particularly prevalent in successful brands and companies. Among the “st” names was Starbuck, a character from the Herman Melville novel Moby-Dick. The rest, as they say, is history.

• Rise of an Empire

From humble beginnings in Seattle’s Pike Place Market, Starbucks grew to a total of six stores in the Seattle area by 1986. In 1987, the original owners sold the Starbucks brand to a coffee business owner Howard Schulz who piggybacked on top of his existing brands to expand the company aggressively.

In the same year, the first Starbucks locations opened outside of Seattle in Vancouver, British Columbia, and Chicago, Illinois. A mere 2 years later, in 1989, there were a whopping 46 Starbucks locations spread across the western United States and Canada. This was only the beginning of Starbucks’ rise to prominence, and 3 years later, in 1992, Starbucks went public with 140 locations and an impressive $73.5 million revenue.

• Global Presence

The Starbucks we know today is a worldwide phenomenon filling every corner of the globe. In 1996, however, there were no Starbucks outside of North America until July, when the first location opened in Tokyo, Japan. Soon after, in December 1997, the second Starbucks outside of North America opened in the Philippines.

With its foot in the door of the international coffee market, Starbucks continued to expand , and soon there were locations in the United Kingdom, Mexico, and Australia. At this stage, in the early 2000s, Starbucks began acquiring other coffee companies to increase their reach and means of production. Seattle’s Best Coffee, Torrefazione Italia, and Peet’s Coffee were all part of the Starbucks brand by April 2003.

As of 2004, there were approximately 7,000 stores worldwide in over a dozen countries.

• A Brief Interruption

Despite the meteoric rise, the global recession in 2008 put Starbucks’ Cinderella story on pause while the world’s economies sputtered and crashed. Starbucks announced in July that they were closing 600 Starbucks locations, a staggering number considering that 10 years prior, 600 stores would have been about half of all their locations.

Although the recession ultimately cost Starbucks a sizable chunk of its stores and a large number of its worker’s jobs, it proved to be little more than a speed bump. Starbucks began to recover and thrive as the recession eased and economies kicked back into gear.

• Starbucks Today

It’s easy to lose sight of the mind-boggling fact that Starbucks is not franchised. Unlike another global giant McDonald’s, each Starbucks is owned by the parent company. Individuals cannot own and operate a Starbucks in the way a McDonald’s franchise owner can. Instead, Starbucks operates under a license agreement.

As of September 2020, there were 32,660 Starbucks around the globe in 83 countries. Starbucks’ growth over time shows a clear exponential curve indicative of the explosive impact they’ve had on the coffee industry. It is infeasible to expect the growth rate to continue at this level, with Starbucks themselves targeting 55,000 locations worldwide in the next decade. Starbucks has already reached over a billion dollars in annual revenue, posting an astronomical $2.3 billion in revenue in 2020.

Starbucks continues to innovate and adapt to the changing times and push the boundaries of what it means to be a mainstream coffee chain. From vegan-friendly choices to an extensive array of tea and snacks, Starbucks has grown beyond its purely coffee origins to be a one-stop shop for coffee and snacks for people on the go, wherever they may be.

The coffee industry faces new challenges every day. From climate change affecting growing conditions to unsustainable farming practices, the future of coffee has never been more uncertain. One thing is certain, however. Wherever the coffee industry goes in the next several decades, Starbucks is sure to be there, leading the way as the de facto face of coffee.

You may also be interested in: 

• Starbucks Caffeine: What’s in Your Favorite Drink?
• How Much Caffeine in Starbucks Grande Coffee? What to Know!

Featured Image Credit: Natalie Kim, Unsplash

Table of Contents

Sean Brennan

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Starbucks - Essay Samples And Topic Ideas For Free

Starbucks is a global coffeehouse chain known for its modern cafe culture, specialty coffee drinks, and significant impact on coffee retailing. Essays on Starbucks could explore the company’s history, business model, and the strategies that contributed to its growth and market dominance. Discussions might delve into Starbucks’ marketing techniques, its emphasis on creating a unique customer experience, and its impact on coffee culture globally. Additionally, analyzing the challenges faced by Starbucks such as market saturation, competition, and its responses to various controversies can provide a comprehensive insight into this influential coffeehouse giant. Furthermore, exploring the impact of Starbucks on local coffee businesses and its efforts towards sustainability and community engagement can contribute to a nuanced understanding of its role in modern consumer culture. We’ve gathered an extensive assortment of free essay samples on the topic of Starbucks you can find at Papersowl. You can use our samples for inspiration to write your own essay, research paper, or just to explore a new topic for yourself.

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History of Starbucks

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The Secret to Starbucks’ Brand Success

The concept of the world being flat has extended beyond geographical boundaries to the rapid blurring and demolition of economic ones. Globalisation is not an expansionary mindset anymore and in many cases, a strategic imperative to identify growth opportunities. Organisations are increasingly looking beyond their national markets. E-commerce and the emergence of digital and social marketing practices have led to a level playing field for organisations and customers and have redefined competition. Price wars have become increasingly common. Established brands are increasingly under threat from emerging private label brands.

Given the massive interconnectedness of the business world and emerging models of competition and growth, how can organisations maintain their core underlying brand identity? In addition to competitive market factors, worldwide external shocks like the global recession have also severely impacted businesses at both local and global level. The key question that emerges is that whether there is now a continual need for brands to adapt or face the threat of extinction if they practice consistency.

Introduction to Starbucks

To find answers to some of these questions, let us look at one of the world’s most iconic brands – Starbucks. Founded in 1971 in the city of Seattle, USA, the brand has changed the way the world drinks coffee outside home and work. Starbucks has been responsible for creating the concept of a third place between home and work where people can relax, enjoy a cup of coffee and experience the inviting ambience. It is often said that Starbucks taught America how to drink coffee and is now continuously teaching the world.

The global expansion of Starbucks has been rapid and strategic. It opened its first international store in Tokyo in 1996, entered UK in 1998 and opened its first Latin American store in Mexico City in 2002. The footprint of the brand increased to cover Russia in 2007 and it opened its first store in Ho Chi Minh City, Vietnam in 2013. In February 2014, it entered Brunei, the 15th market in the Asia Pacific Region and the 64th market globally for the company. In 2015, it opened stores in Panama and reached the milestone of achieving 99% of ethically sourced coffee. The company has more than 30,000 stores in 80 countries worldwide as of June 2019, and is expected to maintain a strong growth momentum.

On 3 April 2017, Starbucks’s former CEO Howard Schultz passed the leadership baton to Kevin Johnson, who will be the president and CEO moving forward. Kevin Johnson served the company in its board of directors since 2009 and has been the COO of Starbucks since 2015. Since Kevin Johnson took over as CEO, the company has successfully executed on its strategic plans, including innovation in coffee, elevated food options and innovation in premium craft iced teas.

Starbucks brand philosophy

Since its founding days in the early 1990s, Starbucks has strived to build its brand identity by offering customers a relaxing and enjoyable experience. From the very beginning, the experiential aspect of the brand has been consistently and effectively implemented in all its stores across the world. In addition, Starbucks has also built its brand on things that tend to be out of the box, by consistently defying conventional wisdom.

When companies were aggressively advertising, Starbucks decided not to advertise. When cost cutting was the dominant paradigm of the industry, Starbucks chose to emphasize non-routine procedures to create excitement among the baristas instead of streamlining procedures to minimize cost. Unlike most other companies, Starbucks made its employees its partners, by offering them stock options and health insurance. In 2014, it announced that it would pay for its US employees to complete an online bachelor’s degree at Arizona State University. Although the pros and cons of this employee benefit and Starbucks’ motivation behind the offer were widely debated, it again defined the organisation’s intent to go against the norms.

Starbucks’ approach towards gathering customer insight is also quite unique and different compared to multi-million dollar marketing research budgets utilised by global organisations. Going against rigorous and complex customer surveys, Starbucks chose casual and informal chats with customers to capture overall mood, understand experience with the store and gather valuable feedback. It is not that Starbucks does not conduct quantitative market research. It has in fact successfully used research findings to shape its market entry strategies in many countries. The key aspect to highlight here is the fact that the organisation does not have a rigid, compartmentalized view of understanding customers. These clever and innovative ways of understanding its customers has enabled Starbucks to build an iconic global brand that has resonated with customers across the world for almost 50 years now.

By offering a pleasurable and relaxing customer experience, Starbucks has been successful in focusing the customers’ attention on the quality of the experience, the enjoyable memories that can be woven together in its stores and not on the pricing of its products. An interesting piece of research conducted in 2013 using neuroscience research techniques in Germany suggested that customers would be willing to pay more for a Starbucks coffee, if the brand decides to charge it. Because neuroscience research looks at changes in brain activity when exposed to brands and price points, the results were considered more believable than traditional market research. The real-world evidence of this power in the mind for the brand is the popularity level it enjoys even though the pricing is higher than many of its competitors.

The Starbucks mission statement reads as “To inspire and nurture the human spirit – one person, one cup and one neighborhood at a time”. In his book Onward, former Starbucks President and CEO Howard Schultz says, “Success is not sustainable if it is defined by how big you become. Large numbers that once captivated me – 40,000 stores – are not what matter. The only number that matters is ‘one’. One cup. One customer. One partner. One experience at a time”. The company operates with a strong sense of attention towards details, and replicating a consistent customer experience across all its stores and its products is a critical focus area. In February 2008, it closed more than 7,000 stores across the United States for “Espresso Excellence Training”, where it worked with around 135,000 baristas to enable them to pour a perfect espresso shot and steamed milk properly.

In addition, another pillar of Starbucks’ brand philosophy is to be a responsible and socially ethical company. This includes responsible purchasing practices, including supporting farmer loans and forest conservation programs; as well as creating opportunities through education, training and employment. Starbucks also initiates many programs to reduce its environmental footprint through energy and water conservation, recycling and green construction.

For example, it sources 99% of its coffee ethically through Coffee and Farmer Equity (CAFÉ) practices thus halving its carbon footprint, partners with the U.S. Green Building Council to apply Leadership in Energy and Environment Design to its stores, and publishes its annual Global Social Impact Report. In its latest 2019 letter to shareholders, it has announced its aspiration to be resource positive – storing more carbon than the company emits, eliminating waste, and providing more clean freshwater than it uses. It plans to do this through:

• Expanding plant-based options on its menu
• Shifting from single use to reusable packaging
• Investing in innovative and regenerative agricultural practices, forest conservation and water replenishment in its supply chain
• Investing in better waste management practices to ensure more reuse and recycling, and eliminate food waste
• Developing more eco-friendly stores, operations, manufacturing and delivery

These are examples of consistency, attention to detail and a strong customer orientation in practice.

Brand strategy

Branding has been one of the pivotal elements of Starbucks strategy over many years. The company has invested significantly in creating a standardised look and feel of its stores, merchandise and food and drinks. The Starbucks Siren logo is one of the most recognisable logos in the world. The global expansion strategy has a key objective of recreating the Starbucks experience in every new country the company enters. This essentially results in a similar kind of experience in its stores, whether it is located in New York, New Mexico, Moscow, Tokyo or Shanghai.

The brand strategy, as mentioned before, focuses in detail on the experience the store creates. This has always been the cornerstone of the company’s philosophy and values. In the United States, where the company estimates that majority of its stores will become drive through, it has embraced stunningly appealing design principles to create stores out of unused shipping containers. Interiors of stores are continuously spruced up through clever and artistically appealing ways of using definite materials, lighting arrangements etc. In its international stores, the strategy is around localising some of the store elements but still staying true to the Starbucks experience.

The first strong indication that Starbucks is planning to move its focus beyond coffee and into other beverages and food products was when the company logo was redesigned in 2011 to remove the words “coffee” and “Starbucks”. This logo is in use till date and is one of the most visual and recognisable elements of the company.

The company’s brand strategy has kept pace with time and has evolved to take advantage of new and emerging customer engagement platforms. The company operates a website called ideas.starbucks.com, where customers can leave ideas for the company to expand and improve its products and customer experience, improve engagement with the community and enhance social responsibility. This is akin to the emerging methodology of “crowd-sourcing” in the field of innovation.

The brand has a sizable social media and digital presence, which has received renewed focus in recent years. This has been driven by the need to better engage with customers and also be visible on platforms where target or future customers spend time online. The brand has an active Facebook page, a Twitter account, Instagram page, a Google+ community, a Pinterest page and a video channel on YouTube. In 2015, Starbucks collaborated with Duracell Powermat to roll out wireless charging in its UK stores, thereby adding to the customer experience and bringing digital innovation into its stores.

The brand invests heavily and believes strongly in mobile marketing. It has embraced digital innovation by developing and rolling out a Starbucks app for paying for products, tipping baristas, earning and redeeming rewards. As at December 2019, it has 17 million Starbucks Rewards members in US and 10 million members in China. In April 2019, it responded to customer feedback and tweaked the Rewards program mechanics to enable occasional customers to redeem their stars more quickly for beverages. Besides its success in using technologies like QR codes, coupon downloads and virtual gift cards in its promotional campaigns, Starbucks has leveraged on Artificial Intelligence to allow customers to place their orders via voice command or messaging interface through the mobile app. This has resulted in a tangible increase in customer engagement, reflected by a 20% increase in Starbucks Rewards member spend.

Brand communication

The Starbucks Siren and its iconic green is synonymous with its quality coffee beverages and relaxing coffeehouse experience all over the world. This would not have been possible without consistent communication of its brand elements, which are one of Starbucks’ most valuable intangible assets. In October 2019, the brand’s internal creative team published its full branding guidelines on its website. Through its refreshed design principles which emphasizes legibility and clear communication, as well as expressiveness and emotion, the brand demonstrates its unwaveringly clear and consistent positioning.

A brand campaign has the purpose of developing a brand with the aid of communication. In 2014, Starbucks launched its first global brand campaign titled “Meet me at Starbucks”. The campaign chronicles a day in the life of Starbucks through a mini-documentary format. The campaign was shot in 59 different stores located in 28 different countries, using 39 local filmmakers, 10 local photographers and one director coordinating all the people involved.

Starbucks is not a stranger to brand and marketing campaigns and has spent significant amounts of money in various campaigns. During the low growth phase of the company in 2008, it invested around USD 200 million on campaigns. The first global brand campaign in 2014 is a deviation from its existing brand promotion and communication strategy, where the focus has always been on its products. But the key thing to note is that the campaign still focuses on the customer experience, which is a direct link with the core values and philosophy.

Starbucks’ brand promotion strategy is still unique, unconventional and does not follow tried and tested advertising models. Starbucks rarely advertises on billboards, newspapers, and magazines and through posters. The company’s few television ads generally focus on specific product offerings highlighting the Starbucks way of preparing them and for promotional campaigns (e.g. free latte till noon on 14 March).

The company has strongly believed in developing and building the brand through word-of-mouth channels and by being visible in a consumer’s life. This brand building principle is clearly reflected in the company’s brand promotion and communication strategies.

Future challenges for Starbucks

Starbucks has had its fair share of challenges in its history. In 2008, the company was on the verge of bankruptcy when Howard Schultz came back as a CEO. He is credited to have successfully turned around the company into a global powerhouse of today. When he came back during those difficult phases, cost cutting and gaining efficiency in operations were made the primary focus areas. More than 800 Starbucks stores were closed in the United States alone over 2008 and 2009. The global recession also made it difficult for the company to come out of its low growth phase due to continuous cutback on customer spending. This experience of Starbucks raises some fundamental questions about the future of the brand and the strength of its brand equity.

Despite the popular notion supported by hard facts and latest research, which argues that brand equity is the surest way to protect competitive advantage, the global recession and the consequent focus on pricing to win customers did erode Starbucks’ equity at that time.

These events beg the obvious question – when fundamental changes happen in the macro environment, should an iconic brand like Starbucks stay true to their strategic vision or continually adapt to regain competitive advantage? Another important question, in light of the vulnerability of brand equity to major external shocks, is whether iconic brands should continue to invest, build and maintain their brands in phases of long-term uncertainty, low growth, deep recession and sustained cutback in customer spending?  Answers to these questions will lay the foundation for how Starbucks wishes to address future challenges in its growth path.

Increased competition: As Starbucks continues to expand into new markets and consolidates its position, it will increasingly come across different levels of local and regional competition. Some of these has and will come from local chains or independent coffee shops and some from Starbucks’ global competitors.

The experiential aspect of the brand has always been the key differentiator for Starbucks. But the same consumer, who Starbucks educated in drinking coffee, has a much more evolved, finer and sophisticated taste for outside coffee drinking. These developed and refined preferences increases the propensity of switching and puts the Starbucks brand loyalty at risk. Local coffee chains with strong heritage or those who position themselves as gourmet and unique can easily replicate the experience through offering superior products. Starbucks customers, who are used to paying a premium for higher quality, will be open to switching wherever the same levels of quality and experience can be recreated.

Additionally, Starbucks needs to be aware of local competitors. For example, founded in 2017, Luckin Coffee is a fast-growing coffeehouse brand in China which is built on the same differentiation strategy as Starbucks. By May 2020, Luckin Coffee had aggressively expanded to 6,912 stores, exceeding the 4,700 Starbucks stores in China but later shut down unprofitable and under-performing locations, leaving it with 4,792 stores in February 2021. In July 2020, Luckin Coffee was found to have overstated revenue and understated net loss in 2019, which resulted in a USD 180 million SEC penalty, de-listing from the Nasdaq and subsequent filing for bankruptcy protection under Chapter 15 to allow restructuring of its financial obligations.

While the consequences of the exposed scandal are still evolving, the brand is still undeniably a strong competitor in the Chinese market. The main reasons for its popularity are freebies, 1-for-1 promotions, 50%-off discounts, and delivery service offering convenience to customers. In order to win over a greater pie of the market, Starbucks needs to be sensitive towards local preferences and constantly provide the customer with a value-adding experience. One way it has done so is to offer larger spaces for community meetups to facilitate the Chinese communal culture, as opposed to individual spaces in the West.

Constant need for innovation: The Starbucks Idea portal is a nice start, but Starbucks needs to have a strong innovation strategy in place to compete effectively in international markets.

Innovation seems to have become a buzzword that is as much misused by the popular press as it is by many brands. Although innovation can be conceptualized in myriad ways, in this context it is used to mean a continuous, organization wide process that allows companies to simultaneously make incremental improvements to existing products and/or services, while investing in the development of breakthrough and significant inventions.

Given such a nature of innovation, it is a fundamental building block of iconic brands. Leading brands create their corporate strategies with an inherent strategic element encompassing innovation. Brand strategies that are envisioned with innovation as one of the core elements affords the brand a long lasting competitive advantage that would even withstand system level shocks such as recession.

Competitors easily copy the innovation concepts in the coffee drinking industry, which include different origin espressos, season specific drinks, new flavors and additives and promotions. For Starbucks, innovation should not be limited to bringing new products to markets, but should be extended to encompass many internal functions such as innovation in channel communication (with customers and other stakeholders), innovation in organizational cultures (work practices and internal brand practices) and innovation in implementing cost-cutting and efficiency-enhancing strategies. Such an inclusive notion of innovation facilitates achieving dual purposes that eventually supports a brand’s competitive advantage. Most of these are not new processes for Starbucks to administer but there is a need for consistent implementation across their global operations.

One very good innovation in channel communication is the launch of the social gifting feature ‘Yong Xing Shuo’ (Say it with Starbucks) in Feb 2017 on Weixin, a sister product of WeChat targeting Chinese domestic users. It encourages everyday acts of kindness and appreciation among family and friends, by enabling users to instantly and conveniently gift a Starbucks beverage or digital gift card.

First, innovation will allow Starbucks to refine and redefine its core brand philosophy in line with changing customer needs. The core brand promise can easily get lost in the competitive clutter in the marketplace. Such a scenario will become even more plausible when the brand experiences an external shock. In such cases, the brand has to reach out to the customers to reinforce that aspect of the brand that earned the loyalty of the customers in the first place.

Second, innovation will allow Starbucks to continually adapt to the changing needs of customers, thereby protecting its competitive advantage. Whenever competitors challenge with either lower priced products or imitation of the overall branding experience, innovation will allow Starbucks to reach out to its customers in novel ways that would reiterate the core brand promise.

Need for diversification: Starbucks placed the strongest possible hint of its future diversification strategy by redesigning its logo in 2011. In 2014, it formally announced the launch of a programme titled Starbucks Evenings, which will see thousands of the company’s stores selling alcoholic beverages over the next few years. So, there are sure signs that the brand is taking diversification as a strategy to identify and unlock growth opportunities seriously.

In addition to expanding the beverage portfolio to include alcoholic beverages, the next opportunity lies in innovation of the food products served in its stores. Many of Starbucks’ global competitors position themselves as not only coffee outlets but also more like cafes. Innovation in food is specifically important for Starbucks to establish foothold in emerging markets or where the coffee drinking culture is in its nascent stage. In many Asian and Latin American countries, coffee drinking is a mealtime ritual, where the importance of food consumption is high. To consolidate in such markets, having a differentiated food offering in its stores will be critical for Starbucks.

Consistency in the brand experience: Starbucks puts a lot of emphasis on recreating similar levels of brand experience in each of its stores across the world. The attention to detail to achieve this is commendable. But, recreating the brand experience needs to tie-in strongly with the specific country’s culture and practices.

Starbucks is not a stranger to creating a coffee drinking experience or even educating a consumer segment in how to drink coffee outside home and work. But the concept of cultural differences in terms of how time is spent outside and for what activities need to drive the local marketing strategies for the brand. So, if the core brand values is to create a third place to have a coffee, meet and greet your friends and have a relaxed experience, then these experiences should match with the local culture.

One good example is its expansion into China – how did it manage to launch so successfully in a culture of primarily tea drinkers? The key was market research. To make its menu more relevant to Chinese consumers, Starbucks introduced beverages that included local tea-based ingredients. Market research revealed that the Starbucks experience appealed to those aspiring to Western standards or those climbing the social ladder in their own culture. Additionally, the company also found out that the Chinese market was not a homogenous one especially in terms of spending power. Responding to this, Starbucks initiated partnerships with local coffee companies to better understand the intricacies of local tastes and preferences.

Pricing and targeting: Just like the McDonald’s Hamburger Index, there seems to be a need to develop a Starbucks Latte Index. Pricing of its products, especially for the hot and cold drinks on offer should be a crucial part of Starbucks’ country strategy. Though the brand has always targeted the upmarket customer through a premium pricing strategy in majority of the markets it operates, the strategy needs to hold in new markets the brand enters. Premium pricing has its potential pitfalls in many markets due to the following reasons:

• Only a specific sub-segment of the population can be the target market, which in many instances can be very small or niche
• Younger age groups, who would tend to display behavioral patterns that match the external coffee-drinking, spending time with friends etc. type of needs may not be able to afford Starbucks products

Premium positioning may lead to a perceived image of the brand to be too upmarket, which can drive away from the core brand values of being the neighborhood’s coffee shop. In emerging markets and also in countries where the coffee drinking culture is not established, it is important to strike a balance on these two key aspects.

To be successful in its international growth and expansion strategy, Starbucks needs to have a strong innovation mindset and the ability to locally customise its product offer and positioning of its stores. The brand has taken rapid strides towards implementing an organisational wide innovation strategy by investing in new technology, redesigning store layouts and investing in new concept stores.

In addition to improving the customer experience, which has always been the primary focus area of the company, the future innovation focus areas increasingly need to be around the product offering.

The company, without doubt, is a successful global marketer with significant experience in entering and establishing themselves in new markets. But as it expands and grows, it needs to reassess constantly and keep its ears close to the ground to understand consumer preferences. Innovation and operational efficiency would be the bedrock for Starbucks to continue to gain success internationally and also in existing markets.

Last but not the least, it needs to evolve and elevate the customer experience of drinking coffee in its stores continuously. This is important because customers get educated very quickly in today’s inter-connected world and their levels of expectation around basic and hygiene customer experience is constantly being elevated. So, a brand experience that is superlative today may just become a regular one tomorrow. Starbucks has to stay on top of this curve to be continuously competitive and differentiated in the eyes of the customer.

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Starbucks - Free Essay Examples and Topic Ideas

The Starbucks brand started in 1971 by opening its store area in Seattle, Washington. Within the 1970s and 1980s, Starbucks Corporation experienced victory within the U.S. market. By 1987, Howard Schultz purchased Starbucks after serving for 5 years within the operation division at Starbucks Corporation. By the conclusion of the year 2000, Schultz had expanded from 17 coffee shops to the number of 4,000 coffee shops. Additionally, until the year 2000 Schultz expected the obligation as CEO, chairman, and chief worldwide strategist.

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Starbucks Corporation History

As before long as Schultz took command of Starbucks Corporation the company was driven in a modern road within the coffee market. Schultz moved Starbucks Corporation into a modern brilliant business era not fair locally but globally (Loyd, Jackson, & Gaulden, 2001). In 1971, Starbucks Corporation was established by Gordon Bowker, Jerry Baldwin, and Zev Siegl in Seattle, Washington. In 1972, driven by the victory of the primary store, they opened a second store in College Town, Washington. Starbucks started offering and conveying coffee at wholesale businesses. Within the another decade, pioneers made the choice for Howard Schultz to buy the company and oversee the deals of the retail stores as well as to back the promoting campaign. Starbucks Corporation started to experience the soul of victory that was show when the organization was established in 1971 (David, 2013). By 1993, Starbucks extended its skylines by entering into a business venture with Barnes and Noble on the East Coast of Washington.

The objective was to offer Starbucks coffee in bookstores where individuals came to spend quality time perusing books. At that time, Starbucks Enterprise had authorized 12 stores and was working 260 company owned facilities with revenues of $176.5 million and reaching net earnings of $8.3 million. Furthermore, in the year 2000, leaders at Starbucks Corporation chosen to extend the business concept out of the United States by opening a add up to of 200 new store areas. As before long as the concept was presented abroad, 150 modern stores were opened within the Asia-Pacific region by opening the first stores in Dubai and Hong Kong, and the remaining population of stores in both Japan and the United Kingdom. Starbucks Corporation found a unique market specialty in mainland Europe by opening the primary store in Zurich, Switzerland. A new verifiable precedent marked an critical position for Starbucks Corporation securing more holding value within the coffee industry.

Starbucks Corporation, in 2002, experienced its first major loss (i.e., $3.9 million) within the advertise from its Japanese operation extension. This misfortune did not dishearten pioneers from proceeding to foster new openings within the market. As a result, Starbucks Corporation opened its first store in Turkey and as a vital collusion procured 129 Seattle’s Best Coffee houses. Additionally, by 2004, Starbucks Corporation declared plans to open 15,000 new stores locally and 30,000 globally. By 2007, the economic recession hit the Anglo-Saxon market and in conjunction with the financial recession McDonald’s entered into the coffee business. In any case, the financial recession constrained Starbucks Corporation to shut 600 stores since of terrible performance within the U.S. showcase.

In 2009, Starbucks Corporation started a new business wander by opening 200 modern stores and launched the new Starbucks card iPhone app to draw in more clients, as well as opened new stores in Aruba, Poland, and East Africa. By 2010, Starbucks extended its digital network to supply unlimited Wi-Fi and reinvested within the company’s brand name by extending its line of business to El Salvador, Hungary, and Sweden. By 2011, Starbucks Corporation celebrated its 40th anniversary, supporting the outreach of the global community by opening new stores in Guatemala. The entire number of stores that Starbucks Corporation had in put as of 2012 was 17,651 (David, 2013) within the following nations: Argentina, Aruba, Australia, Austria, Bahamas, Bahrain, Belgium, Brazil, Bulgaria, Canada, Chile, China, Costa Rica, Curacao, Cyprus, Czech Republic, Denmark, Egypt, El Salvador, England, Finland, France, Germany, Greece, Guatemala, Hong Kong/Macau, Hungary, Indonesia, Ireland, Japan, Jordan, Kuwait, Lebanon, Malaysia, Mexico, Morocco, New Zealand, Netherlands, Northern Ireland, Oman, Peru, Philippines, Poland, Portugal, Qatar, Romania, Russia, Saudi Arabia, Scotland, Singapore, South Korea, Spain, Sweden, Switzerland, Taiwan, Thailand, Turkey, United Arab Emirates, United States and Wales.

Leadership and Power

In 1987, after Howard Schultz obtained Starbucks Corporation he turned into the new CEO and Chairman. Also, Schultz had the creative thought in 1987 to open 125 new stores in the market and convey high outcomes to financial specialists in the organization. Schultz chose to keep the official brand name as Starbucks for rivalry purposes just, in light of the fact that the brand name previously had acknowledgment in the market. As indicated by Schultz, having a name people could recall and perceive . . . what’s more, identify with gives tremendous value’ (Loyd et al., 2001, p. 42).

The exertion of the Starbucks supervisory crew was to keep opening increasingly nearby stores as they had at first arranged and to extend their administration powers comprehensively by opening in excess of 4,000 new store areas around the world. Schultz’s vision and mission administration direction were to urge workers and speculators to drive Starbucks in a sound money related road and to keep developing its funding venture abroad (Loyd et al., 2001). Schultz was effective as a business person yet needed to concede his constraints of aptitudes in the new business period in which Starbucks Corporation was setting out. Also, senior administration at Starbucks had chosen that Schultz should venture down in light of the fact that Starbucks developed so quick that it rapidly turned into a worldwide organization and should have been overseen from a pioneering point of view. Schultz realized that senior administration could drive Starbucks toward a safe operational and money related position in the market. Senior administration and Schultz cooperated to find experts who might be suited to sufficiently oversee and convey the results of Starbucks Corporation in the worldwide field. For instance, the supervisory group was driven from a pioneering road to convey results.

By 2000, Orin Smith turned into the new CEO of Starbucks and was enlisted to pivot the business skylines of the association. Smith enrolled prepared experts in explicit territories in the organization, for example, back, lawful, inventory network activities, and the board data frameworks. Smith conveyed a transformational administration style to Starbucks Corporation by keeping an unmistakable way of the organization’s course, following the vision and statement of purpose of Starbucks Corporation, and filling in as a good example in the association (Loyd et al., 2001). Online life is a significant instrument for Starbucks Corporation since it drives the manageability of the organization’s image. Likewise, incorporating the group the board as a feature of the social part of the association is key since it hardens the business progress in the market. Chua and Banerjee (2013) decided three noteworthy imaginative advances that Starbucks had executed throughout the years: (a) conveying web based life to adequately bolster the marking and advertising position of the item, (b) understanding the job of another channel to utilize the web based life, and (c) depending on compelling techniques to secure customers’ commitment with the items (Chua and Banerjee, 2013). The development of corporate social duty (CSR) was one road of advancement for Starbucks Corporation in that it secures both the brand picture and the earth. Furthermore, CSR has given Starbucks Corporation another situation in the market by exhibiting a parity among monetary success, social trustworthiness, and ecological duty. Starbucks Corporation has demonstrated through CSR that its long haul duty and activities can be supportable and reachable (Katrinli, Gunay, and Biresselioglu, 2011).

Marques (2008) detailed that in the Fortune 100 Best Companies to work for in 2007, Starbucks Corporation was recorded as number 16 since it had implementation of spirituality the work environment as an imaginative way to deal with advance the moral estimations of the executives and representatives. Five components join the execution of implementation of spirituality at work: (a) administration position in the market, (b) money related supportability of the association, (c) workplace, (d) pledge to advancement, and (e) meeting CSR prerequisites. Investors at Starbucks Corporation reasoned that implementation of spirituality at work encouraged Starbucks to expand work profitability and representatives’ inspiration levels to take a stab at perfection (Marques, 2008).

The reason for the extension of Starbucks was to empower the organization to expand the situation of its items in various markets the world over. What’s more, opening new stores set a main way for Starbucks in the market on the grounds that the organization was represent considerable authority in progress and kept on having constructive outcomes among its rivals. Besides, Starbucks holds solid qualities identified with the supportability of workers, espresso agriculturists, and espresso developing practices. The store network of the organization’s retailing adventure has made new accomplice endeavors. The Starbucks reasoning is to connect with representatives and the board at all dimensions inside the association. Starbucks keeps on developing quickly and extend the wildernesses of the organization’s vision and mission (Koehn, Besharov, and Miller, 2008).

Starbucks gets solid monetary help from its investors. After 1992, Starbucks opened up to the world by making another impression of business esteem. Koehn et al. (2008) uncovered in their examination that Starbucks could back its worldwide development by building a strong nearness in the share trading system. Moreover, recorded deals have given an extraordinary thankfulness to the organization’s stock cost. In 2000, Starbucks subsidized the organization’s venture into the universal field by using at full limit the assets from the Statement of Cash Flows as opposed to financing the tasks through outer sources (Koehn et al., 2008).

The global development depended on new items and administrations to drive future development. Also, Starbucks could connect with imaginative roads by bringing its items into markets, distribution center clubs, and retail outlets to expand open mindfulness. Starbucks saw the chance to offer established music, books, and motion pictures. Notwithstanding, Starbucks had a more extensive goal of what the organization would move toward becoming sooner rather than later. The item extension likewise gave a wellspring of steady income that would assist the organization with continuing to live up to speculators’ development desires. Starbucks brought a change of the new business time to the espresso business (Koehn et al., 2008). The significance of imagination to Starbucks is to concentrate on people, the association, and making better approaches for intuition in the worldwide espresso industry. Imagination alludes to arranging a thought dependent on its effect on the association’s objectives and targets.

Additionally, Starbucks guarantees that authoritative achievement is met by expanding the nature of its items and continually focusing on new difficulties with contenders and representatives. Starbucks characterizes inventiveness in the association by applying the three segments of mastery, inspiration, and better approach for considering. The principal part of the inventiveness level is singular mastery that comprises of joining business related systems and item desires. The second part of the inventiveness level is inspiration that drives the energy of the association to be innovative about the organization mark name. The third part of imagination is better approaches for considering; that is, the ability to institute new plans to decide the adaptability and way to deal with the issue. In this manner, the advancement imagination of Starbucks brand can fuel the organization’s flourishing and advance the organization’s item improvement process (Certo and Certo, 2012).

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Starbucks Essay: Useful Writing Tips and Samples

If you are not used to writing essays regularly, writing one can be a daunting assignment. It can be a lot of work where you will have to research, draft, and plan in order to write an essay. The task may seem difficult if you jump into it head fast without conducting any research or planning.

Tips on how to write your Starbucks essay

Begin by researching the topic. In this case, you need to investigate this company and learn a little more about it. You can begin by visiting their company website, social media sites such as LinkedIn, Facebook, and Twitter among others. You can even consider going to one of their coffee shops to get a feel of how the company works and the type of services they offer. An essay that is well researched is fantastic. Therefore, do not be afraid to spend more time on this step.

After you have researched the company, you will need to plan the layout of your essay. Begin by crafting the message you want to put across and how you will use your researched information to support your message. You can draw a simple structure of how you would want to present your findings. At this point, you haven’t begun writing your essay but you have completed the biggest part which is the introduction part. This is after doing away with planning and research, and then proceeding to put together your ideas and create the content. Follow the structure you have made to create the body of your essay, draw on your research and within no time, you will have the writing done.

The introduction and conclusion are best written after you have completed the body of your essay. This is because it is very easy to introduce something that you have already written and it’s logical to write a conclusion immediately after you are through with the body of your content. Your introduction should give a reader the full overview of what to expect in your essay, while the conclusion summarizes your main points and propose some opinions.

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A sample of Starbucks essay and structure

• Provide a brief history and introduction

Starbucks is among the most popular coffeehouse chains in the globe and is located in more than 50 countries and has hundreds of thousands of employees. The coffeehouse is reputable for offering different types of coffee beverages which they serve cold or hot. Over the years, the company has made huge profits by providing one product which people enjoy. Despite the company offering only one main product, how has it managed to create such wealth every year?

• The thesis statement which is the last sentence of the introduction should guide you on what your body and conclusion will talk about. In this case, the body should explain why Starbucks has been very successful over the years.

The name Starbucks comes to mind when people think about a special retail coffeehouse. This close relationship between the brand of the company and the consumers’ perceptions enables the company to charge top dollar for their product, despite the high competition. Starbucks being the world’s largest coffee chain has the power to extract terms that are favorable from its suppliers. One of the major strengths of the company is the praise it gets from its role in improving the well-being of the coffee planters by paying good prices for the products they receive. 

The company’s leader Howard Shultz is also another pillar of strength in the company, since the inception of Starbucks; he has guided the company through good and bad times. The leadership has stayed well over competition and many decisions that were risky proved to be beneficial in the end.

Starbucks also has employees who enjoy doing what they do to make the company a better place. They enjoy their work because they believe the company treats them fairly. This employee satisfaction translates to better services to their customers. This is why Starbucks was named by the Fortune Magazine as one of the top 100 best companies to work in.

• Opportunities

Despite the company being recognized in the coffee industry, it only has a 7% share of coffee drinking market in the US and only 1% around the world. Therefore, there are huge expansion opportunities for the company that is emerging in China and India. 

Although Starbucks has been the leading coffeehouse chain, it has been feeling pressure from competitors like McDonalds due to their relatively low prices. Starbucks should also subsidize its prices for their product without distorting the quality. If the company does this, it will realize more and more profits and be able to expand to other areas. The experiment they performed on one of their markets in Seattle has proved that if they lower their prices, they will compete favorably with McDonald and other competitors.

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After Long Dispute, a Russian Starbucks

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By Andrew E. Kramer

• Sept. 7, 2007

KHIMKI, Russia, Sept. 6 — With the hiss of an espresso machine and a note in Russian explaining the meanings of “tall,” “grande” and “venti,” Starbucks opened its first coffee shop in Russia on Thursday in a mall in this city near Moscow.

The opening sealed a victory for the company in a fight with a trademark squatter who had kept Starbucks from coming to Russia for more than three years, just as a coffeehouse culture was emerging here. Starbucks refused to pay the squatter to yield the Starbucks name in Russia and eventually prevailed in court.

The dispute illustrates the challenges Starbucks will face as it strives to expand outside the United States, where growth is expected to slow. Starbucks intends to open 20,000 coffee shops overseas while expanding to about that number at home.

With the opening of the first Russian cafe, Starbucks, which is based in Seattle, now operates in 43 countries, said Carole Pucik, a Starbucks spokeswoman. The company plans to open a flagship Russian shop on Old Arbat Street, a prime address in downtown Moscow, later this year. “We see lots of opportunity here,” Ms. Pucik said.

The menu of basic coffee drinks is the same as in the United States, and indeed everywhere in the world, Ms. Pucik said. The sandwiches and baked goods are adapted for local tastes. The Russian shop, for example, offers a mushroom-and-cheese sandwich.

In Russia, the prices are a reflection of the oil-driven economic boom here. A tall filter coffee costs 75 rubles, or about $2.92. The most expensive item on the menu was a venti mocha, for 230 rubles, or about $8.96. A venti mocha at Starbucks in New York costs $4.71.

Starbucks first registered its trademark in Russia in 1997 but did not open any shops here because of the economic crisis of 1998. Then in 2002, as the Russian economy was picking up again, Sergei A. Zuykov filed a request with Russian authorities to cancel the chain’s trademark because it had not been used in commerce in Russia. He then registered Starbucks in the name of a Moscow company he represented as a lawyer.

Mr. Zuykov, a lawyer and a former car alarm salesman who says he has claimed many brands, defended his stake on the name Starbucks for three years, saying that if Starbucks would pay $600,000, he would abandon his registration. The company refused to pay.

He lost his case in November 2005 as Russia stepped up its bid for membership in the World Trade Organization and hewed closer to international standards for the protection of intellectual property.

Despite this setback, which allowed competitors a head start, Starbucks said it saw plenty of room for more coffee shops in Russia. Ms. Pucik, the Starbucks spokeswoman, cited data from Euromonitor International, a market research company, showing that Moscow has one coffeehouse for every 3,187 people. New York has one for every 365 people, and Paris one for every 126.

The Coca-Cola Company: A Global Beverage Giant Essay

Introduction, pestel analysis, swot analysis of the coca cola company, porter’s five forces analysis of the coca cola company, recommendations.

According to the requirement of the assignment (to chose and write about one of the global top ten brands), the Coca Cola Company has been chosen. In this paper, a short background of the Company has been included. The mission and vision statements, and goals & objectives have also been listed.

Further, the most important task for any organization i.e., the various analyses such as PESTEL analysis, SWOT analysis, and Porter’s five forces analysis have been done. A thorough research on the subject has been done and it has been the endeavour of the writer to include authentic information throughout the paper.

In 1886, when the Statue of Liberty, one of the wonders of the world, was being constructed in New York, little did the people know that eight hundred miles away, in Atlanta, another master piece was being invented that would create history. Yes, it was none other than Coca Cola, the most favoured soft drink in the world today.

John Pemberton was a pharmacist based in Atlanta. Out of curiosity and somewhat coincidence Pemberton invented the formula for Coca Cola that has become one of the most renowned soft drinks in the world. It is interesting that the style in which Pemberton wrote Coca Cola about 126 years ago has become the logo of the company.

Within three years of Pemberton’s death (he died in 1888), an Atlanta businessman named Asa Griggs Candler purchased the Coca Cola business for $2300 and became the first president of the Company. Candler took the Coca Cola brand to great heights by innovative promotions. It was in 1894 when Coca Cola was bottled by Joseph Biedenharn who had business interests in Mississippi.

In 1923, Ernest Woodruff purchased the company from Candler. After four years, Ernest’s son Robert Woodruff became the company president. It was under his tenure as the president of the Company that Coca Cola was launched worldwide.

Woodruff introduced new flavours such as Fanta in 1950s, Sprite in the year 1961, Tab in the year 1963 and Fresca in the year 1966. Today, there are more than 500 different brands of the Company and one can find Coca Cola in the remotest parts of the world. All this has been possible due to the foresightedness of the Company’s management.

Mission statement of the Coca Cola Company

“Our roadmap starts with our mission, which is enduring. It declares our purpose as a company and serves as the standard against which we weigh our actions and decisions” (The Coca Cola Company).

Vision statement of the Coca Cola Company

“Our vision serves as the framework for our roadmap and guides every aspect of our business by describing what we need to accomplish in order to continue achieving sustainable quality growth” (The Coca Cola Company).

Goal and objectives of the Coca Cola Company

“To continue to thrive as a business over the next ten years and beyond, we must look ahead, understand the trends and forces that will shape our business in the future and move swiftly to prepare for what’s to come” (The Coca Cola Company).

Structure of the Coca Cola Company

The following are the members of the Board of Directors of the Coca Cola Company:

Apart from the Board of Directors, following are the holders of different portfolios in the Functional Leadership at the Coca Cola Company:

Corporate culture at the Coca Cola Company

“Our inclusive culture is defined by our seven core values: leadership, passion, integrity, collaboration, diversity, quality, and accountability” (The Coca Cola Company). The Company has a diverse workforce from all over the world and considers operating in a multicultural world as a crucial aspect of sustainability.

PESTEL stands for the political, economic, social, technological, environmental, and legal aspects that may have an impact on the performance of any organization. This kind of analysis is generally done by organizations in order to get information on the aforementioned aspects prevailing in a specific country or area where they want to launch their products.

The analysis can also be done to have the latest trends and current information of the aspects. This analysis helps the organizations to understand the market (current or future) and the external factors that may have an impact on their performance.

The Coca Cola Company is no exception and as such it also has to undertake the PESTEL analysis. This is vital because it is important for the company to know its competitors and also the existing opportunities. This way the Company can keep pace and sustain the competitive market.

Political factors

All nations have their own laws and policies pertaining to business. Moreover, there are separate policies for foreign companies. It differs from nation to nation with regard to the extent of intervention by the government in the functioning of any company. The intervention may be in the form of taxes, trade and environment restrictions, labour laws, and/or the facilities or services available.

The Coca Cola Company comes under the Food and Drug Administration (FDA) and as such it has to follow stringent rules and regulations laid down by the governments of different nations. The Coca Cola Company has to take approval from FDA for any of its new products to be launched. Governments of nations can impose heavy penalties on the Company if the FDA standards and norms are found to be disregarded.

There are other laws that the Company has to abide by in a particular country. These laws may pertain to the accounting system, income tax, import and export duties, and excise duties.

Another important political factor that may have an impact on the performance of the Company is the political unrest. If the government of a country changes or there is any kind of protest then there are chances of the demand of the Company’s products being decreased.

Terrorist activities in any country might hamper the Company’s marketing plans in that country.

Economic factors

The performance of an organization in any country depends mainly on the prevailing economic condition. There are various factors that come under the economic condition. These are economic growth or progress of that country, the interest and exchange rates, the labour wages, and the current level of unemployment. The Coca Cola Company has been smart to have judged this aspect before venturing in any new area or country.

If the economic growth or progress of a country is good, it means that the purchasing power of its citizens is good. Due to the fluctuations in the exchange rates of a nation’s currency, the overall revenue of the Company is affected. The interest rate on the loans that the Company has taken from the government affects the profitability. The Coca Cola Company uses special financial instruments to tackle with this issue.

If the inflation of a country increases, it means that the cost of living has increased. In such circumstances, the employees expect higher wages. This factor also has an impact on the profitability.

Social factors

Social factors include the culture, attitude of people, awareness about health among people, and the rate of population growth. It is not possible for the Coca Cola Company to change the social attributes of a country.

So the Company has to adapt itself and mould its policies according to the prevailing social values and culture trends. This is very important for the Company because it is a soft drink manufacturing company and as such is a typical B2C company. In order to flourish, the Company has to consider this aspect.

Even though the Coca Cola Company manufactures hundreds of products, all of them cannot be launched everywhere. So the Company first studies the social and cultural trends and then launches the right products only.

Technological factors

Technology is of utmost importance in all walks of life and if it is a manufacturing process then it becomes all the more important to have the latest technology. Coca Cola Company has got the latest technology for its manufacturing facilities. Due to its technological advancements, the Company has introduced various new methods of obtaining a drink of its brands.

It is understood that the Coca Cola Company has bottling partners in most of the countries where it has business interests. The Company has to rely on its bottling partners for delivering quality products and at the same time it has to provide the required support and guidance.

Legal factors

The Coca Cola Company has to abide by all the laws of a country where it is doing business. The governments of all nations have the right to prosecute the Company if it violates any of the laws.

Sometimes these laws are the reason for increase in costs of production. But the Coca Cola Company is very careful about all such laws.

Environmental factors

Since the products of the Coca Cola Company are to be served chilled, the environment plays a vital role in the sales. Apart from this, there are certain environment protection laws in every country. The Coca Cola Company has to abide by them. A special mention of plastic bottles is eminent. The Coca Cola Company takes great care in using only renewable plastic for its PET bottles.

Likewise the PESTEL analysis, SWOT analysis is also a popular analysis done by organizations in order to know their Strengths, Weaknesses, Opportunities, and Threats in the global competitive market. In the following paragraphs we shall do the SWOT analysis for the Coca Cola Company.

Coca Cola is the world’s leading brand. “Coca Cola Company is the leading brand in the soft drinks marketplace and is responsible for an array of brands including MyCoke collection, Fanta, Sprite, 5 Alive, Schweppes, Powerade, Kia Ora, Dr Pepper, Lilt, Relentless, Oasis and Glaceau Vitaminwater” (O’Reilly, 2012).

The Coca Cola Company is the largest manufacturer of soft drinks (non-alcoholic). It is also the biggest distributor for soft drinks.

The Coca Cola Company has a very strong financial base. The Company has a vast infrastructure spread across the globe. Due to this, the company can penetrate the worldwide markets with ease.

The Coca Cola Company is also into the manufacturing of bottled mineral water and juices.

There have been certain events in the past that have jeopardized the image of the Coca Cola Company. Like for example, there have been instances of human rights violation against the Company. The Company came under criticism due to its stand on the Middle Eastern countries. In India also, the Company had to face negative publicity due to the fact that the Company products being sold in the country contained some traces of hazardous pesticide.

In 2008, the FDA warned the Company that Diet Coke, one of its products, was in violation of the FDA norms.

The company was unable to garner the expected sales in North America.

“Coca Cola’s Dasani brand of bottled water was found to have illegally high levels of bromated a cancer-causing chemical” (Adams, 2004).

Opportunities

During the past years, the Coca Cola Company has acquired a few companies across the globe. Some of the acquired companies are Kerry Beverages (KBL) in Hong Kong, Apollinaris in Germany, and TJC Holdings in South Africa. Apart from the mentioned companies, the Company also acquired other companies in Australia and New Zealand.

The acquisitions have helped the Company in strengthening its base in those countries and increase its revenue. This has also helped the Company in penetrating the world markets.

The incessant growth of the bottled water industry has been a boon to the Company. As the Company has also started bottled water plants, this growth is encouraging.

The Hispanics are believed to have great purchasing power and are good consumers of soft drinks. The increase of Hispanic population in the United States is encouraging since the consumption will increase.

Due to the fact that the soft drink market is flourishing, many companies have started venturing into this field. Even though many of them are small time players but it does affect the overall performance of the Coca Cola Company.

Apart from these small time players, there are the bigger companies like the PepsiCo, Nestle, Cadbury, etc., who pose a real threat to the Company. Due to the competition, the Company has to keep a nominal profit margin.

In countries where the Coca Cola Company doesn’t have its own bottling plants, it has to rely on its bottling partners. In such cases, the Company doesn’t have much control over the operations.

During recent times, people have become more health conscious and have started avoiding carbonated drinks. In future, there is a threat of the Company’s sales going down. According to an online article, “Don’t drink cola if you want to be healthy. Consuming soft drinks is bad for so many reasons that science cannot even state all the consequences” (Nutrition Researchers, 2007).

Porter’s five forces analysis is based on five points namely, threat of new competitors, the intensity of the competition, the threat of substitutes, the bargaining power of the customers, and finally the bargaining power of the vendors. It is very important for the Coca Cola Company to do this analysis.

Threat of new competitors

There are already so many players in the soft drink field that more companies entering in this business is not good for the Coca Cola Company. In order to avoid such intrusions, the Company does the following:

The Company does extensive marketing and advertisement campaigns. Billions of dollars are spent on advertising and marketing. “Coca Cola spends $2.8B a year (10% of revenue) on advertising” (Gaudet, 2008). As a result, the brand Coca Cola has entered into the minds of even the layman. It becomes very tough for new companies to replace the brand.

The Company gives good margin to the retailers such that new companies cannot offer more and cannot replace the brand.

The bottling partners of the Coca Cola Company have to sign a contract before starting the business. According to this contract, the bottling partners cannot do the bottling for any other brand.

The intensity of the competition

Apart from Pepsi, there is no other brand that can come in competition with Coca Cola in the global market. Other brands are small players and are limited to local markets.

Threat of substitutes

There can be many substitutes to Coca Cola products such as aerated water, ice tea, beer, fruit juice, cold coffee, etc. But such substitutes need a lot of advertising and marketing to reach the brand image of Coca cola. So as such, there no such threat in the near future.

Bargaining power of customers

The revenue figures are arrived at from the sales and the sales depend on the customers. Since the revenues of the coca cola Company are quite encouraging, it means that the buying power of its customers is good. The major sales of the Company are from the bulk buyers that include super markets, vending machine operators, food chains, restaurants, etc.

Bargaining power of the vendors

The raw materials used in manufacturing the products by the Coca Cola Company include essence, colour, and sweeteners. Packaging is required for packing the products. Since the raw material is purchased in bulk, there is very little profit margin allowed to the vendors.

The vendors of the Coca cola Company don’t have any bargaining power. This is because instead of more profit margins they are being compensated with huge quantity orders. Moreover, there is no dearth of suppliers of raw materials. So if any particular vendor acts smart, there is always another vendor ready to supply the required raw materials.

The most important recommendation that I would like to make is that the Coca Cola Company should try and amend the contracts with its bottling partners. The Company should have the power to intervene in the operations of its bottling partners.

Incidents like the one that happened in India where the Company was accused of mixing hazardous pesticides. Had the Company had the power to intervene, probably this would not have happened.

My second recommendation is in the financial interests of the Company. It is evident that the Company hires renowned personalities for its advertising campaigns. It is for sure that the company might be paying hefty amounts to these renowned people for their services.

Instead of showing such people in the advertisements, the Company should hire people from the masses. This will serve a twin purpose. Firstly, the company will save huge amounts which it may use as cost cutting on its products. Secondly, since the people in the advertisements will be from the masses, it will have a greater appeal.

In concluding, it is evident that the Coca cola Company is one of the top global brands and the leader in non-alcoholic drinks. There are a few things that have been mentioned in the recommendations and if the Company management gets convinced and executes them, I am sure the Coca cola Company will reach unprecedented heights of success.

Adams, M. (2004). Coca-Cola’s Dasani water found to contain alarming levels of cancer-causing chemicals . Web.

Gaudet, B. (2008). Coca Cola . Web.

Nutrition Researchers. (2007). What happens to your body within an hour of drinking a coke . Web.

O’Reilly, L. (2012). Coca Cola . Web.

The Coca Cola Company. Mission, vision and values. Web.

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A Classical & Christ-Centered Education

Classical Christian Education

Christ-centered.

In all its levels, programs, and teaching, Logos School seeks to: Teach all subjects as parts of an integrated whole with the Scriptures at the center (II Timothy 3:16-17); Provide a clear model of the biblical Christian life through our staff and board (Matthew 22:37-40); Encourage every student to begin and develop his relationship with God the Father through Jesus Christ (Matthew 28:18-20, Matthew 19:13-15).

In all its levels, programs, and teaching, Logos School seeks to: Emphasize grammar, logic, and rhetoric in all subjects (see definitions below); Encourage every student to develop a love for learning and live up to his academic potential; Provide an orderly atmosphere conducive to the attainment of the above goals.

Grammar : The fundamental rules of each subject. Logic : The ordered relationship of particulars in each subject. Rhetoric : How the grammar and logic of each subject may be clearly expressed.

What Do We Mean by Classical?

In the 1940’s the British author, Dorothy Sayers, wrote an essay titled The Lost Tools of Learning . In it she not only calls for a return to the application of the seven liberal arts of ancient education, the first three being the “Trivium” – grammar, logic, rhetoric, she also combines three stages of children’s development to the Trivium. Specifically, she matches what she calls the “Poll-parrot” stage with grammar, “Pert” with logic, and “Poetic” with rhetoric (see The Lost Tools Chart ). At Logos, the founding board members were intrigued with this idea of applying a classical education in a Christian context. Doug Wilson, a founding board member explained the classical method further in his book, Recovering the Lost Tools of Learning. Logos School has been committed to implementing this form of education since the school’s inception.