Starbucks Company’s Overview and Competitor Analysis

Cite this

Starbucks Corporation is an American company with a chain of coffeehouses and coffee roastery reserves around the globe. With headquarters in Seattle, Washington, the company has 32,660 stores in eighty-three countries across three segments: Americas, International, and Channel Development. The Americas category consists of the United States, Latin America, and Canada, while the International segment covers the Middle East, Africa, China, Japan, Asia Pacific, and Europe (Reuters, 2021). The Americas and International segments specialize in the marketing and selling of beverages, packaged coffees, complimentary merchandise, and food and miscellaneous related items at licensed and Starbucks-operated stores. The segment of Channel Development is responsible for selling packaged coffee and tea and ready-to-drink beverages outside the company-operated or licensed stores. In addition, Starbucks also sells services and products under several brands such as Teavana, Evolution Fresh, Ethos, Seattle’s Best Coffee, and Starbucks Reserve.

On-Time Delivery!
Get your customized and 100% plagiarism-free paper done in as little as 3 hours
Let’s start
322 specialists online

McDonald’s and Dunkin’ Donuts have remained the key competitors of Starbucks for the last decades. Even though Dunkin’ Donuts has been focusing mainly on donuts as its unique market proposition, in 2006, the company increased its competitiveness by challenging Starbucks to compete for the number one spot in the US to get coffee with its “America Runs on Dunkin” advertisement campaign (Hawley, 2019). While Starbucks has been focusing on creating an upscale and chic coffee shop environment, Dunkin’ Donuts has positioned itself as an all-American brand. Nevertheless, the company could not compete for long because it had twice as few locations as Starbucks.

When it comes to McDonald’s, which has been the preferred fast food restaurant for decades among American and international customers, customers joined the coffee battle around the mid-2000s. For instance, for the 2017 fiscal year, McDonald’s outperformed both Dunkin’ Donuts and Starbucks with a revenue of $22.82 billion; however, the leadership of the company in the segment was primarily due to the expanded menu that it offers.

It is also essential to mention Costa Coffee, which was recently purchased by the Coca-Cola Company, with the acquisition considered to have a significant impact on Starbucks (Hanbury, 2018). Costa Coffee has 3,882 stores in thirty-two countries and is the United Kingdom’s leading chain of coffee shops, with 2,467 locations alone (Hanbury, 2018). Even though Costa is not expected to outperform Starbucks in the American market, being acquired by Coca-Cola means that the company will attain wider, more significant opportunities to compete in international markets while also entering the US segment with ready-to-drink products. The competition between Costa and Starbucks is essential to note in the international context because both are large in China. Ultimately, the rivalry comes down to the comparison of the products offered by the chains and how appealing they can be to their target audiences. Besides, the atmosphere and layout of both Starbucks and Costa locations are similar, which means that the customer experience can often be identical.

Considerations of Starbucks products’ life cycle are essential as they can allow for understanding their popularity, potential revenue, and future opportunities. Even though some experts believe that the industry of gourmet coffee is still at the stage of growth, signs around the Americas and Europe show that the segment is in its maturity stage of the cycle (Lister, 2020). The maturity of Starbucks products is illustrated by the high brand awareness, broad distribution, reasonable prices, and new product versions and modifications for maintaining competitiveness and creating brand distinctiveness. For example, every year, Starbucks starts the fall coffee season by returning its pumpkin spice products, which are usually highly anticipated by customers. Also, product maturity is seen in the rise of competing specialty coffee chains with unique brand features to target specific demographics within particular market areas.

The dedication to the consistency of the product range and the quality of the services and products that Starbucks offers makes it highly competitive. The company’s emphasis is on ensuring that customers have a positive experience at its locations and when purchasing branded products at other locations. In addition, Starbucks has also been successful at pursuing and maintaining sustainable sourcing and production initiatives. The supply chain of coffee has been strengthened with the help of technology assimilation and new product development, the communication of the key marketing message, as well as the completion of sales and monitoring of customer satisfaction levels. Getting customers’ feedback and applying it in practice is what has made Starbucks successful alongside its products, such as the pumpkin spice flavored drinks. Since there are significant barriers to imitation, Starbucks remains customers’ first choice for coffee and other beverages worldwide. Therefore, the customer base and brand loyalty extend far and wide, allowing the company to continue its global expansion and adjust to local market needs. Attracting new clients in various regions globally can strengthen Starbucks’ client-focused culture and its commitment to sustainability and innovation, ensuring that the company remains relevant.

References

Hanbury, M. (2018). Coca-Cola just bought a massive coffee chain for $5.1 billion. Here’s how it compares to Starbucks. Insider.

Yes, we can!
Our experts can deliver a custom Starbucks Company’s Overview and Competitor Analysis paper for only $13.00 $11/page
Learn More
322 specialists online

Hawley, J. (2019). Who are Starbucks’ main competitors? Investopedia.

Lister, J. (2020). The product life cycle of the gourmet coffee industry.

Reuters. (2021). Starbucks corporation

Cite this paper

Select style

Reference

BusinessEssay. (2022, September 17). Starbucks Company's Overview and Competitor Analysis. Retrieved from https://business-essay.com/starbucks-companys-overview-and-competitor-analysis/

Reference

BusinessEssay. (2022, September 17). Starbucks Company's Overview and Competitor Analysis. https://business-essay.com/starbucks-companys-overview-and-competitor-analysis/

Work Cited

"Starbucks Company's Overview and Competitor Analysis." BusinessEssay, 17 Sept. 2022, business-essay.com/starbucks-companys-overview-and-competitor-analysis/.

References

BusinessEssay. (2022) 'Starbucks Company's Overview and Competitor Analysis'. 17 September.

References

BusinessEssay. 2022. "Starbucks Company's Overview and Competitor Analysis." September 17, 2022. https://business-essay.com/starbucks-companys-overview-and-competitor-analysis/.

1. BusinessEssay. "Starbucks Company's Overview and Competitor Analysis." September 17, 2022. https://business-essay.com/starbucks-companys-overview-and-competitor-analysis/.


Bibliography


BusinessEssay. "Starbucks Company's Overview and Competitor Analysis." September 17, 2022. https://business-essay.com/starbucks-companys-overview-and-competitor-analysis/.