Coffee - Starbucks Essay Example for Free

Coffee Starbucks Essay Starbucks is a premium coffee wholesaler which has strayed from its original service of coffee. The advent of newer technology has diminished the Starbucks experience. Howard Schultz, Starbucks chairmen, sent a memo on February 14, 2007 addressing this problem to the president and chief executive officer of Starbucks, Jim Donald. In the memo, Schultz voiced his opinion on how the rapid expansion of Starbucks is causing him to revaluate the company’s values between how it operated when it began and where it is heading in the future. Starbucks isn’t the same neighborhood store as it was when it was established and no longer shows the passion for coffee that they had in the beginning. â€Å"I have said for 20 years that our success is not an entitlement and now its proving to be a reality. Lets be smarter about how we are spending our time, money and resources. Lets get back to the core† (Schultz). Along with its expansion, Starbucks has been trying to utilize new technologies to improve the product they sell to consumers. Starbucks changed their espresso machines from manual to automatic to speed up service and efficiency. These machines â€Å"blocked the visual sight line the customer previously had to watch the drink being made, and for the intimate experience with the barista† (Schultz). People no longer have that intimate connection with the people making their coffee, or to the finished product. The employees are also more disassociated from their work because of these new machines that speed up production. Starbucks also incorporated flavor-locked packaging to supply the demand for fresh roasted coffee. This is a great service to the customer because it keeps coffee grounds or beans fresher longer, yet the effectiveness of the flavor-locked bags contributed to the loss of aroma, â€Å"perhaps the most powerful non-verbal signal†, in Starbucks (Schultz). The romance of Starbucks is lost with these improvements and the unforgettable scent is lessened along with its heritage. Starbucks is still a coffee-loving company, and consumers are still receiving the coffee delicacies they want, but at what cost to tradition. https://sites. google. com/site/hollymadalyn/writing/Starbucks-Research-paper SYNOPSIS Starbucks Corporation, originally founded in 1971, but purchased by Howard Schultz in 1987, is the market leader in selling gourmet coffee (Starbucks, 2008). Starbucks main objective is to establish itself as the most respected and recognized coffee brand in the world (Fact Sheet, 2008). Starbucks has accomplished this objective and experienced much success through their competitive strategy of clustering several stores within the same community and through their distinctive competencies of roasting and selling the quality coffee while providing high quality customer service. The question is, can Starbucks continue their market share growth with rising competitors? Should they focus more on their international operations? Can they continually reinvent themselves to maintain their strong brand image in the long run? PROBLEMS. †¢ Overall economic downturn can affect Starbucks’ market share if management neglects to address competitors’ strategies with lower priced offerings as consumers are becoming more conservative in spending their discretionary income. †¢ Loss of identity and authenticity focused upon the foundational Starbucks experience, which, if unaddressed by management, can result in dissatisfied customers, loss of sales, and decreased market share. †¢ Considering the economy and increasing domestic competition within the U. S. , Starbucks must address their less profitable international operations. SWOT ANALYSIS[1] INDUSTRY EVALUATION In the past two decades, the coffee industry has experienced a significant increase in the demand for premium coffee. Today, about one in five Americans drinks some type of espresso-based coffee drink each day. The average yearly coffee consumption per capita in the U. S. is around 4. 4Kg. Among these coffee drinkers, the average consumption is 3. 1 cups of coffee per day, with men drinking approximately 1. 9 cups per day, and women drinking an average of 1. 4 cups per day (Coffee Research [continues].