Starbucks Competitive Analysis, Case Study Example

The key success factors of Starbucks are the strong brand recognition and reputation, consistently high quality products, and the rapid expansion strategy that involves buying new outlets. Further, empowering employees to train highly competent managers has also been a successful strategy of Starbucks. The clustering of stores and making “Starbucks local” outlets has also increased the company’s competitive advantage.

According to the US World and News report (19), “the company finds local business partners in most foreign markets” that have “knowledge of the retail market”. Further, “it tests each country with a handful of stores in trendy districts, using experienced Starbucks managers”. (UW Business School, 2003).

The posted revenue for Starbucks for the year 2013 is 14.9 billion dollars. Considering that the sales growth of the stores remained at 7 percent, and the operating income increased, it is a good sign. The company, however, should be paying attention to the high capital expenditure figures.

Starbucks currently has 19,767 stores worldwide, with 52 percent of the outlets operated by the company, and 48 percent licensed.

There were a total of 9,573 licensed stores of Starbucks, and this shows that the company is looking to reduce operating expenses by selling franchises worldwide. On the local and international level, this is a good strategy, as franchisees would have the knowledge of the market, as well as cultural experience that the company would have to spend money and time to gain. I Japan, for example, there are a total of 1000 open stores, all licensed. The company is also rapidly expanding in China, with a total of 111 more stores licensed than in 2012. While the revenues delivered by these licensed stores are lower, they allow the company to reduce the cost of opening new outlets and expanding globally.

Works Cited

Starbucks Corporation. “Fiscal 2013 Annual Report” 2013. Web.

UW Business School. “Starbucks Corporation: Competing in a Global Market” 2003. Web.

US World and News Report.  February 19, 2001. Print.