Counter Point

There are 15,756 Starbucks stores in 44 countries. To have that many stores, serve that many people, and ensure they still maintain the best and highest quality of beans, really sets some doubts. Starbucks has truly become the McDonald’s of the coffee industry because of the supply and demand. In the Starbucks business, quantity is greater than quality because quantity equals to money, where as quality costs more money. There is no win/win situation with this equation when your business is serving practically the world.

Starbucks has created a competitive advantage with their product quality by setting themselves apart from their competitors. “The Company has stayed with the upper-scale of the coffee market, competing on comfort rather than convenience, which is the case with its closest competitors, McDonald’s and Dunkin Donuts” (Mourdoukoutas, Panos). Consumers believe they are receiving a better product and experience when they purchase from a Starbucks as opposed to another large food service company that may sell coffee.

Starbucks created a change in the coffee industry by valuing their customers and partners from the beginning.

Since Starbucks entered the coffee retail business, the company has made many trade-off business decisions. The first major trade-off was made when Howard Schultz wanted to acquire present day Starbucks from three entrepreneurs Baldwin, Siegel and Bowker. Therefore, Schultz prior to the acquisition made the trade-off to open his own coffee bar in 1986 instead of staying at Starbucks as the manager of retail sales and marketing. A bold feat, Schultz was able to replicate success and was offered to buy Starbucks for $4 million. At the time of the acquisition, many investors, including the former Starbucks owners, would not expect that the American consumer would pay a premium for coffee products. Schultz, after calculating the opportunity cost, was convinced that Starbucks would become a large coffee chain not only in the United States but internationally too. Reflecting this approach, Schultz’s trade-off worked. Starbucks, according to our book has revenue exceeding $13 billion and nearly 200,000 employees. The company has also expanded to 40 countries with 17,000 stores (Hill et al., 2015).

Nonetheless, Starbucks is big enough that they have created an oligopoly. But like any other company they face the increasingly large task of not only serve their clientele, but be able to still make a profit. In order to stay competitive and still be profitable they need to reconsider their current business plan and focus on the demand for the quality instead of the quantity. The basis of this rationale would be to modify its business plan in order to respond to the needs of it clientele and be able to deliver on their wants. There is no such thing as an ideal profitability methodology, but if the product keeps its value and it is able to withhold its product differentiation as well as brand identification, the profit margin and its ROI would speak for itself.

Starbucks is one if not the largest growing coffee shops in America. It has started a war on coffee. Starbucks has taken its franchise and expanded all over the world and really placing a Starbucks in just about every corner. It went back to its hometown and opened up a café. It happened right after Dunkin Donuts which was an England franchise and began advancing west and it now in three locations in Southern California. Dunkin Donuts opened up its store on Santa Monica boulevard in Los Angeles there was a mass of people lined up outside. McDonald’s, Dunkin Donuts and Starbucks have been fighting for the position for serval years and the battle is escalating fast.

Starbucks customers are diverse, well educated, young business people looking for a quick and easy way to grab coffee on their way to work. Starbucks values a strong relationship with their customers so they are

Starbucks has discovered that they are not always meeting their customers’ expectations in the area of customer satisfaction. Starbucks has to come up with an action plan to address this issue, considering its significant correlation and impact to sales and profitability.

Starbucks customers are often extremely loyal and return to Starbucks in a regular pattern. They attempt to maintain the latest trends and choose Starbucks, although it is more expensive than generic coffee brands, because the quality is assured.

After evaluating each alternative (Exhibit 2), we recommend that Starbucks invest $40 million per year to increase labor hours per store in order to solve the problem with the quality of service. Starbucks should also set up an internal strategic marketing team. This will allow Starbucks to have a proactive feedback of customer satisfaction and hence faster improvement. We also noticed that labor cost is high for Starbucks' North American operations. To keep labor cost at reasonable level, Starbucks should reduce waste in making drinks, keep consistency in drinks, and improving productivity. We recommend

Starbucks provide hundreds of products and also with their customized drink; however, it is also a challenge for them. For customers who do not want to choose from bunch of choices, starbucks heterogeneity coffee choices just confuse them. Another problem is the different starbucks location or different baristas make different taste of coffee. If a customer always goes to one specific starbucks location, he/she may not satisfy with the coffee in

This paper will explore the science of Managerial Economics, the cost effective management of scarce resources, through an exploration of the Starbucks Company. This will include an assessment of relevant market forces, market structure and the economic theories that guide business decisions for this company.

Therefore this budget would help in their orders in good time. Starbucks initially believed in employee satisfaction to be a factor greatly enhancing customer satisfaction and this investment will cause less stress on the employees as there will be extra time for customer intimacy which is a key factor in the value proposition at Starbucks. However since the investment is huge, it is advisable to conduct a primary market research and test this idea in the main franchises and proceed with the investment once all factors are

We have decided that the best solution at the moment is to introduce a second low-end Brand. At first, this brand should be positioned as a Starbucks’ countermeasure against lower-priced competition like McDonald’s. In this way, Starbucks is able to compete, without jeopardizing the original brand with a price based competition.

Starbucks to provide high quality products and provide our customers with quality service, they are prepared to pay more for better quality and better service. Starbucks to maintain the quality and level of service coffee purchases to prove a higher price. Starbucks took a lot of effort to stand out from the competition: new kinds of specialty coffee drinks, interior design to make time spent at Starbucks more enjoyable, new services (Starbucks goes mobile), Starbucks social networking communities, this creates for customers provide additional value, they are willing to pay more. Overall Starbucks is a strong global brand positioning itself as a coffee expert, whose product is based on the price of the relevant brand of high-end