The paper “ Starbucks - Strengths and Weaknesses of the Company in the American and Australian Markets” is an outstanding version of a case study on marketing. It is the dream of every company to expand and conquer as many markets throughout the world (Grant, 2003). However, Elbanna (2009), states that very few companies manage this fete. For a company to be able to become embraced in the international market, it must have succeeded in creating itself as a recognizable brand in the home nation and have the necessary business acumen and capital strength to create a niche in these markets (Fairholm, 2009).
Most of the companies that have gone on to succeed in the global market were first successful on their own local soil. However, it should be noted here that there are very many and very diverse challenges that face these companies as they try to expand into international markets and very many of them succumb to these challenges (Dutton & Duncan, 1987; Bryson et al 2009). There are others though who go on to become global giants and capture the international market quite well.
Starbucks limited is one such company. The company has managed through a relatively short time period to expand and grow into the market and thousands of stores making it become a well-recognized brand across the globe. And all this has been done in the midst of a lot of competition and pressure from the local and well-established companies. This paper seeks to investigate various parameters that make Starbucks one of the most outstanding brands in the world. The strengths, as well as weaknesses of the company especially in the American and Australian markets, will be analyzed here.
The strengths of Starbucks will also be matched with the various opportunities that are available in the Australian market. Lastly, the strategies of the company in Australian as well as New Zealand markets will be discussed and an analysis of how the company copes with its major competitors. Starbucks company- a brief profileBefore the paper embarks upon the discussion of the tenets described above, it would perhaps be important to provide brief profiling of the Starbucks company so that we can have a little more insight into this company.
Starbucks was founded in the year 1971 by three young investors. Later, these investors were bought out by Howard Schulz who became the CEO of the company and immediately embarked on an expansionist plan (Starbucks coffee company website, 2013). Since this buyout in the year 1987, Starbucks started expanding rapidly into both local and foreign markets. By this year, Starbucks company has over 20000 outlets and stores across the globe with American alone having over 13000 Starbucks branded stores (Starbucks coffee company website, 2013).
Currently, Starbucks is deemed to be the largest coffee house company in the globe following this expansion. This growth, especially in the USA, has been necessitated by some factors and strengths as outlined in the paragraph that follows. Strengths of Starbucks in the American marketplace There are a number of strategic factors that have contributed largely to the expansion of Starbucks on the American soil. One of these factors is the solid base that the company crops. Starbucks was an operational and profitable brand and the company even before its founders sold it to Schultz.
People had already established some form of rapport with the company and they had come to like the products that the company offered. After the sale, Schultz quickly incorporated his own coffee shops in the Starbucks brands and started growing. From this base, the Starbucks stores increased in a geometric progression style and became a household name and brand. Another strength was the financial strength. Following the success of the initial stores, the company was able to have a solid financial footing and with this kind of financial strength, it was able to develop and create new stores rapidly.
Lack of serious competition was also a thing that played to the advantage of the Starbucks Company especially in the United States. Though this paper acknowledges the presence of other competitors in the market during this period, these competitors lacked enough power in the form of financials and the charismatic appeal similar to that of Starbucks Company. The company enjoyed a high level of staff retention mainly because it paid its staff well compared to other companies.
These factors also enabled people to resonate clearly with the company. A very important factor that formed as strength of this company was the emphasis on the quality of their coffee. Starbucks has a reputation for making the best coffee in the world. This reputation rolls over to the startup days of the company where the management laid much emphasis on the way the coffee sold in all the Starbucks outlets was made. The coffee had to meet a certain degree of quality and despite being priced above the market rate, people had a demand for the coffee.