Starbucks Paper Essay Example

strategies are discussed on pages 131-132. According to Parnell, “Product decisions are a key part of the marketing mix and can be quite interesting” (2006). Wireless internet is good for working individuals and those who are in school. Customers can also order Starbucks products online. These products include: coffee and tea blends, brewing equipment and accessories, music, books, movies, and Starbucks cards.

Weaknesses

One weakness that exists for Starbucks is the downfall of the economy. According to Parnell on page 44, “Economic forces significantly influence business operations, including growth or decline in gross domestic product and increases or decreases in inflation, interest rates, and exchange rates” (2006). Customers are now using their extra funds to pay high gas prices instead of buying coffee. Another weakness is the high price of Starbucks coffee. Customers perceive Starbucks as a high-end coffee company, which they view as more expensive than competitors.

Starbucks needs to re-think its pricing strategy to compare with competitors. Parnell noted, “Business units that compete with the low-cost generic strategy produce basic, relatively undifferentiated outputs and often lower prices” (2006). Parnell also noted “Businesses that use the generic strategy of low-cost differentiation must market quality products and services that are distinguishable from the outputs of their competitors” (2006). Declining market share could possibly be a weakness for Starbucks.

Parnell noted that, “As market share increases, control over the external environment, economies of scale, and profitability are all likely to be enhanced” (2006). If there is a decrease in market shares, then the factors previously mentioned are also susceptible to decline. Opportunities There are many opportunities for growth for Starbucks. Starbucks could merge with another well-known company. Krispy Kreme would

be a great company for Starbucks to merge with. Coffee and doughnuts go hand-in-hand. Two successful companies merging could be a major step toward growth.

Merging with another company can have many benefits including sharing risks. According to Parnell, “The attractiveness of mergers and acquisitions seems intuitively obvious: Two firms join forces and the combined organization possesses all the strengths of the individual firms” (2006). Location is another growth opportunity factor. Parnell noted that, “The organization should be located where skilled labor, suppliers, and customers are readily accessible” (2006).

Another threat could be a future beverage product that could out-do coffee. Starbucks needs to be aware that new and different products could become more popular than the ones they provide. Customers want to try new things and be intrigued by a company’s products and services. If Starbucks does not offer these new products or services, customers will go to competitors for them. Product innovations are discussed on page 117. Conclusion Starbucks is a very successful coffee retailer with a strong competitive advantage.

Although alterations and improvements are always desirable in the retail industry, Starbucks continues to be a leading retail/service business. Because of their strong value to commitment, Starbucks continues to rise to the top of the business world. There is a lot in store for Starbucks customers.