Управление международными рекламными кампаниями

    As a result of Starbucks closely following their objectives, the company has installed a list of principles that further outline the company's willingness to make sure that its affect on the environment is as positive as possible. These principles are stated as:

• Understanding of environmental issues and sharing information with our partners.
• Developing innovative and flexible solutions to bring about change.
• Striving to buy, sell and use environmentally friendly products.
• Recognizing that fiscal responsibility is essential to our environmental future.
• Instilling environmental responsibility as a corporate value.
• Measuring and monitoring our progress for each project.
• Encouraging all partners to share in our mission.

    The importance of these guidelines is further illustrated by the company's mission to show leadership towards environmental issues. This can only be seen as a positive for the image of the company and shows that they are willing to utilize their resources in order to more than satisfy requirements. In addition to this, Starbucks doesn't just rest on its laurels, it demonstrates it through participating and organizing activities such as neighborhood clean-ups and walk-a-thons. Once again, the company's image is strengthened by its actions and shows that it is able to actively contribute with the right focus behind its activities. Further examples of the company's actions towards environmental friendliness include the recycling and reusing of resources in order to enhance the lives of people around the world. Policies that also have been implemented are the buying policies, which only allow the company to purchase from those other businesses (suppliers) who follow the same environmental strategy as Starbucks. This illustrates the integrity of the company as they can sometimes sacrifice opportunities if they don't follow what the company stands for. In addition to waste reduction, Starbucks also aims to reduce energy usage and once again, demonstrates this by doing energy audits and then using the results to change store design or procedures so that they save as much energy as possible. Lastly, to integrate these policies to new employees, Starbucks has employed the services of a few partners which congregate together to create a 'Green Team,' which installs the environmental views into trainees as well as coming up with inventive ways of helping the environment. 

    Score: +3 

    Demographic Factors 

    Starbucks originated in the United States, which is the sector we will be examining for demographics. According to the CIA World Factbook, the population of the U.S. as of July 2001 was estimated at 278,058,88 (CIA). Population facts are important to Starbucks because they can give Starbucks valuable statistics, such as US population base per Starbucks store. People ages 15-64 make up the largest percentage of the population, and therefore will have greater control of the market than any other sector (CIA). This implies that the most important target market for Starbucks are people within this age group. The two largest ethnic groups in the U.S. are white 83.5% and black 12.4. The ethnic background is important to a company because it influences tastes, trends, perceptions, values and beliefs of an individual. Estimated GDP in 2000 was $9.963 trillion (CIA). GDP real growth rate was 5% (CIA). The growth rate of GDP suggests that the economy is growing, and therefore there is opportunity for Starbucks to expand business. A very large per capita purchasing power parity of $36,200 suggests that Americans have the opportunity to buy specialty coffee drinks from an expensive, quality-intensive organization such as Starbucks (CIA). An inflation rate in consumer prices in the year 2000 of 3.4% is a high inflation rate. This suggests that the economy could be heading towards recession. During a recession, it could be expected that consumers would spend less on premium luxury items such as Starbucks' coffee. 

    Score +2

    Legal / Political Forces

    Right now, Starbucks has two class action suits pending since 2001. The lawsuits entitled Carr vs. Starbucks and Sheilds vs. Starbucks are challenging the status of Starbucks California store managers and assistant managers as exempt employees under California wage and hour laws. Starbuck's is denying all liabilities in these cases, however; the company has agreed to the settlement in order to take care of all of the plaintiffs' claims without having to get involved in any protracted litigation. 

    Starbucks also only imports all their coffee beans, so possible threats could include a change in import laws. A change in the status quo as far as imports go could greatly affect numerous areas of production for the company. For example, if it costs more to import or the process is made more difficult the result could ultimately be a change in price, which would affect the level of consumption for Starbucks coffees: 

    Score -2 

    Summary of Scores

    The Economic Force was scored as a -1 due to the fact that an increase in coffee prices does affect the level of consumption of the good. Economic factors, such as price, raises pose to be a threat, however it is a minor threat considering that Starbucks has established its customer base. It is apparent that an increase in price might affect consumer behavior, but it will not drastically change consumer habits. The technological sector was scored as a +3. The reasoning behind that is that new technological changes that Starbucks is undergoing poses to help open the door for new products by improvements being made in marketing and manufacturing techniques. Also the changes will assist in improvements in existing products. The technological improvements, advancements, and innovations create a great deal of opportunity for the organization by staying ahead of what competition is doing. In the Sociological sector, Starbucks was given a +3. Justification for this score is that Starbucks has created an image of being environmentally friendly. This is a strong opportunity to build on the organization's market share because the company can attract more consumers from its competition because of its strong reputation. Starbucks scored a +2 in the Demographic sector primarily because the U.S population is growing, with an increasing GDP and large per-capita purchasing power. Starbucks must be weary of a high inflation rate, as this could suggest recession.

 

2. Porters Five Forces

 

    Current Competitive Force 

    Porter's first force that Porter describes is current rivalry among existing firms. In the specialty eateries industry, Starbucks' current and direct U.S competitors are Diedrich Coffee, Seattle's Best Coffee, and Einstein/Noah Bagel Corporation.

     The competition, however, is not equally balanced. Diedrich Coffee operates 370 coffeehouses in 37 states and 11 countries. Seattle's Best Coffee operates 160 coffee cafes and 20 Italian coffee cafes in 17 states and 8 countries. Einstein/Noah Bagel Corporation operates 460 bagel cafes in the U.S.

     Starbucks has 4,709 locations in over 20 countries. It is clear that Starbucks has few major competitors, and the competition has nowhere Starbucks' volume of operations. Starbucks is the leading retailer, roaster and brand of specialty coffee in the world. Smaller competitors, however, pose potential threats to the company. For example, the average Starbucks location draws on a population base of 200,000. In San Francisco and Seattle, Starbucks draws on population bases between 17,000 and 19,000. In cities where Starbucks does not draw on small population bases, smaller competitors can attract some of Starbucks' 200,000 person population base. A slowing industry market growth is another threat facing Starbucks. According to the market research firm Allegra, compound market growth between 1997 and 2001 was 57%. From 2002 to December 2004, the market it estimated to grow 14%.

     Competitors are selling similar products, including specialty coffees as well as high quality foods. In this slowing market, competition is high. 

    Score: -2 

    Threat of Potential Entrants 

    Porter's next force is the threat of Potential Entrants. Starbucks, being the world leader in its industry, has controlled access to distribution channels. Starbucks has exhibited this control over distribution channels by setting guidelines for their suppliers to follow. These guidelines will be discussed in more detail in the discussion of the industry bargaining power of suppliers. Starbucks is Fortune's number one most admired company in the food industry. One of their key attributes to success is innovation, where Fortune ranks Starbucks number one in the industry. Starbucks is constantly innovating and showing strong product differentiation in their industry. The industry, following Starbucks' lead, is becoming more differentiated. For example, five months after Starbucks introduced a prepaid Starbucks debit card, Seattle's Best launched its version of the marketing product. This industry differentiation is an opportunity for Starbucks, and a threat to potential entrants. Statistics have shown the industry to be slowing down, therefore making competition high and the threat of new entrants low. Some believe, however, that there is a different kind of potential entry threat. Ted R. Lingle, executive director of the Specialty Coffee Association of America, believes that national food servers like McDonalds and Denny's could create strong coffee menus and become "the strongest competitor for Starbucks' business.". 

    Score: -3 

    Bargaining Power of Buyers 

    Porter's next force is Bargaining Power of Buyers. Starbucks' customers are the buyers. The Preferred Office Coffee Provider is a plan developed by Starbucks in which companies can buy the ingredients and tools necessary to brew "the perfect cup of Starbucks Coffee," in large quantities for their offices. This is the only opportunity found in Starbucks.com for a customer to buy large quantities of their products. Starbucks' typical customer buys small quantities of their products. Products purchased at Starbucks are highly differentiated and unique. From personal experience, we know that there is an enormous selection of coffees at a Starbucks' coffee shop. At Starbucks.com, it is possible to buy a large number of products, from coffees, ice cream and Frapuccino ™, to music and coffee mugs. This is an opportunity for Starbucks. Customers will face no switching costs in switching premium coffee suppliers from Starbucks, to, for example, Seattle's Best. This is a threat to Starbucks. Another threat to Starbucks is that their customers have the ability to brew their own coffee. Starbucks has tried to offset this threat by offering Preferred Office Coffee Providers as well as directions on how to make the perfect cup of Starbucks Coffee at home, called the "Four Fundamentals of Coffee". The perfect cup of Starbucks Coffee includes, of course, Starbucks' ingredients! It is clear that Starbucks customers have some bargaining power in the industry. 

    Score: -2 

    Bargaining Power of Suppliers 

    Porter's fourth industry force is bargaining power of suppliers. Coffee is the world's second largest traded commodity (Bruce). South and Central America produce the majority of coffee traded in the world. Starbucks depends upon both outside brokers and direct contact with exporters for the supply of green coffee (Bruce). The supply of coffee is affected by weather conditions, and the health of coffee trees. According to the article "Coffee Industry to Adopt New Pricing Plans," the major players in the coffee industry have seen profits decline because of over-crowding of the market (Brains Trust). An over-crowded market will give the coffee suppliers bargaining power. According to a 1996 Starbucks Case Profile, the price of the coffee bean could rise in the future due to lower supply, and heightened demand. For the industry, these are alarming threats. The quality of coffee sought by Starbucks is very high, and Starbucks has traditionally paid premium prices for its green coffee, at least $1.20 per pound. There are no substitute products for the coffee beans Starbucks must buy. This is a potential threat to the company. Starbucks, however, has exhibited how little control its suppliers might actually have. In 2001, Starbucks announced new coffee purchasing guidelines, developed in partnership with The Center for Environmental Leadership in Business. These guidelines are based on the following four criteria: Quality baselines, social conditions, environmental concerns, and economic issues. Only suppliers who can meet Starbucks' coffee standards will be able to supply the giant company. The supplying industry to Starbucks, therefore, has few companies. This is a potential threat. Starbucks will offset this threat by paying a premium of up to ten cents per pound of coffee to vendors based on how well their coffee meets Starbucks' standards. Glenn Prickett, executive director of the Center for Environmental Leadership in Business, said, "With these guidelines, Starbucks is taking a leadership role in addressing the environmental and social issues surrounding the global coffee industry." Starbucks has a degree of control over its suppliers in an industry where it is possible for suppliers of premium coffees to have an enormous amount of bargaining power. 

    Score: -2 

    Threat of Substitute Products 

    In the premium foods and coffees industry, there are substitute products. According to Mary Coulter, the best way to evaluate this threat is to ask whether other industries can satisfy the customer need that this industry is satisfying (Coulter). Other beverage industries can satisfy the customer's need for a drink, and other food industries can satisfy the customer's need to eat. There are obviously good substitutes to Starbucks' products. This is why image is very important for Starbucks, as well as the company's ability to innovate and differentiate. Starbucks has added a line of tea, Taza teas, to their menus, and will be adding beer to their menus in the future. The article "Hot Prospects," notes Starbucks fashionable image. "Frapuccinos are a kind of badge; People like to be seen with them," said the author. There is a large threat of substitute products in a food and drink industry. Starbucks has created an image, and has differentiated so that many of their substitute products are part of the company. At a Starbucks coffee shop, a customer can eat ice cream, and drink a Pepsi, while his friend drinks tea while eating a pastry. 

    Score: -3 

    Summary of Scores

    It is necessary to understand that Starbucks Corporation is the world leader in their industry. The scores, generally low, reflect this leadership position. Starbucks has found ways to minimize the threats in each industry force. The company's size offsets  many of the threats of competition. Starbucks' ability to innovate and differentiate has minimized the risk of potential entrants. Efforts to integrate Starbucks into the home have minimized threats of customer bargaining power. Starbucks has offset the potentially high bargaining power of its suppliers by issuing coffee guidelines, and paying premium prices for suppliers who can meet these guidelines. This is why the highest score was negative three. We gave a score of negative three to the threat of substitute products because Starbucks is in a food and drink industry, and in this industry, there are many good substitute products. A score of negative two means that Starbucks should be weary of the threats in their specific environment, and continue to find ways to exploit its opportunities, and minimize its threats.

 

3. Issues and recommendations facing Starbucks

 

1. Corporate strategic

 
   

•  Measures that Starbucks can take to ensure that their brand image and reputation for quality is not tarnished while implementing a growth strategy.

   Starbucks has, and will continue to have, a major corporate growth strategy. As corporations grow there can be a tendency to focus too heavily on increasing output and locations, and less focus on quality and brand image. Starbucks needs to stay with its values and ideals that have made it successful. Those ideals are a great place for employees to work, which creates happy, productive employees with low turnover, which has a direct impact on the customer's experience and satisfaction. Also a commitment to quality cannot be sacrificed as Starbucks locations will likely double in the next five years. If Starbucks can keep a consistent atmosphere that combined with consistent, excellent quality coffee products, they can ensure their brand image and reputation. 

• Franchising effect of Starbucks corporate decision. Advantages and disadvantages of franchising for Starbucks.

   In general, franchising shifts the financial risk from the corporation to an individual. So an advantage of Starbucks franchising would be to open hundreds of new stores with less risk to the company, and make profits in doing so. In addition Starbucks would have less research and development costs because the franchisee would have greater knowledge of the local market in terms of demographics, psychographics, geographic, and local/state/country regulations. The disadvantages of franchising are that Starbucks would give up a certain amount of control over the store, and the way it operates. Despite the high amount of rules and regulations that Starbucks would hypothetically have in place for a franchisee, the each store would be run slightly different. If Starbucks franchised, there is the risk of different stores deleting some of the menu to it's standards, and picking and choosing what products (music, coffee equipment, books) to make available for the customers. By keeping all stores corporately owned Starbucks can control and monitor all location's operations and ensure a high employee and customer relations through consistent management, store operation, and location environments. 

• Influence of the Starbucks’s international growth strategy.

    Starbucks has the potential for finding a new type of growth strategy once the international growth strategy is no longer beneficial. In this case Starbucks will need to concentrate on its core competency, high quality coffee products, and use a concentration growth strategy. Starbucks will stay in the same industry, so the two main sub-strategies would be product development, and product-market diversification. It is important to understand this in the product development phase they would need to focus solely on making their existing products better. The company could demonstrate product market diversification through research and development, and creativity. The company could be extra sensitive to changes in customer tastes, and the external environment. In doing so Starbucks could quickly react to environmental changes and make sure to entice as many people as possible into their stores. For example, Starbucks could start a line children's fruit drinks and "yummy" milkshakes which would help bring families into the store. This way the mothers and fathers could go to Starbucks and get their favorite coffee drink while making their children happy. 

 
 

2. Competitive strategic

 
       

• Starbucks counteract to competitors with national food servers such as McDonalds and Denny's that can create high quality coffee menus.

    In order to compete against this possible market threat, Starbucks must push to be the first mover. Starbucks must constantly innovate new products to stay ahead of such competitive tactics. If they have any chance of stopping the companies from being the innovator, it can do so by being the innovator itself. Starbucks needs to be extremely aware of what is going on in the competitive markets. A way they could fight this type of competition is by entering into agreements, long-term contracts, with the food service companies that they are competing against. This way their coffee would be sold at these outlets, rather than competitors, and they would gain access to a new market and increase sales while decreasing competition. This option would have a chance of harming the companies' brand image and reputation for quality and its coffee drinking atmosphere. This would, of course, take much top management debate that would be a "last resort" in the case of an extreme competitive threat. If, for example, McDonalds entered into a coffee agreement with Diedrich Coffee, Starbucks could respond by acquiring Diedrich Coffee. Through acquisition Starbucks would ultimately gain a greater market share, salvage its brand image and decrease the threat of competition. Another possibility would be for Starbucks to create a subsidiary that specializes in catering to the food service industry. This would be another way for Starbucks to compete without the risk of damaging its reputation and brand image. 

• Opportunity of Starbucks to gain a significant amount of market share by entering the markets of less populated cities in the United States.

    Starbucks would gain a considerable amount of market share if it entered into markets with less population, and affluence. Starbucks has a reputation throughout the United States, and this image will carry through and make certain profitability and increased market share in smaller markets. It will demonstrate this opinion by using Springfield, Missouri as an example. Springfield does not have a Starbucks coffee, yet it the third largest city in Missouri.

    According to business4springfield.com, Springfield has a population of over 300,000 people, a population growth of 2.3% and a workforce of over 180,000 people. Most people from Springfield are very much aware of Starbucks, which is located in Kansas City and St. Louis. In Springfield, Starbucks would be forced to compete against Churchills Coffee, which is well established in the area. Starbucks could use many tactics to overcome this competition and gain the Springfield market share in the high quality coffee industry. Some tactics include building many locations combined with a heavy marketing campaign to draw customers from Churchill's. Another option could be to use Starbucks incredible purchasing power to acquire Churchill's. This also goes along with its growth strategy and history of acquiring its competition.