Sturbucks Case Analysis (Case Study Sample)

Situational Analysis and Marketing Mix for Starbuck
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Situational Analysis and Marketing Mix for Starbuck
1 Company Overview
Starbucks is the leading retailer and the roaster of the coffee industry in the United States. The company expanded operations to the United States and the rest of the World by focusing on quality premium coffee, tea, and various fresh foods and beverages. The company expanded from its humble origin in Seattle, United States. The American coffee house chain and coffee company use automated espresso machines to increase the efficacy of their products and facilitate new market opportunities across the globe. The company has employed over 182000 employees in over 62 countries. (Starbucks Coffee 2013).
2. Situational Analysis
2.1 Key Market
The primary market for Starbucks products involves a demographic of young customers between the ages of 18 and 40 years. The company enjoys the largest market share in the industry, with the market concentrating around urban dwellers who are mostly students or young couples. The market needs of Starbucks keep changing, and the customers get quickly tired of the traditional forms of advertisement. As a result, the company focuses on new ways of innovative ways of marketing to maintain dominance (Geereddy, 2013). Due to most of Starbucks' customers' current age, the company already has a strong presence in social media networks such as Facebook, Instagram, and Twitter (Perepu, 2015). The market growth of Starbucks is projecting an increasing trend as the number of students joining the college in the urban areas is increasing steadily as the enrollment of undergraduate students increased by 24 percent between 2001 and 2015 (Hussar & Bailey, 2018).
2.2 SWOT ANALYSIS
Strength:
* The company's brand is strong and unique as it forms a unique business model that focuses on the balance between profitability and conscience (Haskova 2015).
* The company has considered a growth strategy by acquiring and merging with other companies, emphasizing innovation.
* The company takes pride in the consumption of quality goods.
* The company focuses on a product mix by introducing new products for people of different ages.

Opportunity:
* The company considers expansion into merging markets by aligning ten HR policies into the company's expansion strategy.
* The customers of Starbucks ' products are not priced sensitive. Thus, the company enjoys opportunities for continued expansion.
* The company is expanding its product mix and offerings by adding tea and fresh juice offerings.
* The technology revolution has offered the company the need to expand its services through the use of the application such as Starbucks App(Kell, 2015)

Weakness:
* The dependency on the US market, where the big part of the company's revenue is generated from the US market
* The Starbucks coffee product is sometimes expensive, making customers consider its competitors such as McCafé.

Threats:
* The company faces fierce competition from other companies such as McCafé, Dunkin Donuts, and costa.
* The fluctuating price of the coffee beans may affect the profit margins.
* The changes in lifestyle and preference where customers are shifting towards healthier foods
* The company’s main competitors may imitate the strategy of Starbucks.

2.3 Competitive Analysis
The current operation strategy for Starbucks is unique as the company has differentiated itself from the convenient stores, homebrewed coffee, and specialty coffee shops. The future looks like the battle between Starbucks and McDonald’s is likely to be intensified. The company introduced another homebrew that is likely to be higher-end and expensive than other homebrew products brands but still cheaper. The company's service offering is both at the venue and the online shopping platforms (Abdul Malik, Saad Al Kahtani & Naushad, 2013). The company’s customers have a connection to high internet through the use of smartphones and laptops. The customers view the menu through the online platform n decide how they want their drink, and their team offers them their preference. The company uses the social media platform to provide its customers with the necessary information and see the brands that may be visually interesting.
3. Marketing Mix
3.1 Product and Service Strategy
The main products of the Starbucks Company include coffee, tea, Frappuccino, baked goods, and Smoothie. The company acquired Frappuccino products in 1994 after the acquisition of the Coffee Connection. Starbucks will continue to embrace mass customization culture on its brands to ensure that it serves the growing population in the long run (Harrington, Ottenbacher & Fauser, 2017). For instance, the company launched "however-you-want-it" Frappuccino that primarily targets young customers. The strategy will as sit the company to continue dominating the US market despite the market being competitive.
3.2 Pricing Strategy
Starbucks incorporated a premium pricing strategy that takes advantage of the behavioral tendency of people to purchase more extensive products by considering the correlation between the high and low prices. Compared to the competitive company's products such as the McDonald's Premium Roast, the company's brands are expensive in the US market. Despite the pricing strategy, the company strives to strengthen its image to continue dominating the market. In this case, the company ensures high-quality goods and services to satisfy its customers (Mason, Cole & Goza, 2017). Starbucks lost most of its customers to its competitors, and thus a necessity to correct the trend. As a result, the company focused on a strategy that could make the products affordable for all customers. For instance, the company can consider the price model of 1.50 for small, 2.00 for medium, 3.00 for large.
3.3 Promotion
Product Promotion is one of the most critical tasks for a company that aims at targeting prospective customers. This marketing mix component refers to the communication strategies used to disseminate information about the firm and its products to encourage customers to choose the consequences. The Starbucks Corporation promotes the products through interpersonal relationships and communication through the use of the means of advertisements. The Starbucks promotional mix includes Word-of-mouth marketing, Advertising, Sales Promotions, and Public r