Starbucks: Beyond Just Coffee
July 26, 2005 MBA 560: Marketing Management Dr. Kathleen M. Dominick Brent Baker Bethany MacDuff Abhi Singh Jun Zhang
Three businessmen in Seattle founded Starbucks Coffee Company in 1971. At that time, coffee consumption in America had been declining for a decade. The decline stemmed form rivalry among the major coffee brands, which were competing on price. As a result, they were using cheaper coffee beans to reduce costs, which compromised the quality of the coffee. Starbucks‘ founders decided to experiment with a new concept: a store that would sell only the finest imported coffee beans and coffee brewing equipment. The Starbucks Coffee Company grew slowly but by 1981 had 4 retail stores and a roasting plant that sold whole bean coffee in Seattle only. By 1983 the marketing manager had a vision of re-creating the magic and romance behind the Italian coffee bar and wanted to test out the concept of selling espresso by the cup. When Starbucks Coffee opened its 6th store in downtown Seattle, the idea had become a hit. Within 2 months the new store was serving over 700 customers a day and it was selling 3 times more than the whole bean locations. In 1987, the owners of Starbucks Coffee Company decided to sell their coffee business along with the name to a group of local investors for $3.7 million. The new investors were told that they would open 125 Starbucks coffee stores in the next five years. Starting from a base of 17 stores in 1987, the company expanded rapidly to Vancouver, Portland and Chicago. By 1991 Starbucks had expanded into the mail-order catalogue business, licensed airport stores and expanded further into the state of California. In 1992 the company went public and after the initial public offering, Starbucks continued to grow at a phenomenal pace that no one had ever seen in the coffee world before. By
1997 the number of Starbucks Coffee stores grew tenfold, with locations in the US, Japan and Singapore. Starbucks initiated several successful product and brand extensions including offering coffee on United Airlines flights. They also began selling premium teas through its Tazo Tea Company and offering people the option to purchase Starbucks coffee online to enjoy at home. They began distributing whole bean and ground coffee to supermarkets through an agreement with Kraft Foods. They also produced premium coffee ice cream with Dreyers. Starbucks even sold CDs in its retail stores. Starbucks began turning its name into a household word not through advertising but through word of mouth. In fiscal 2004, Starbucks opened a record 1,344 stores worldwide. The once small regional roaster, Starbucks Coffee Company, now has more than 9,000 locations in 34 countries serving over 20 million customers a week. Starbucks‘ mission statement is ―Establish Starbucks as the premier purveyor of the finest coffee in the world while maintaining our uncompromising principles while we grow.‖ The following graph show how Starbucks‘ stock price changes in five years in security market.
There are a multitude of key success factors that have aided Starbucks in attaining the type of market dominance and generating the insurmountable revenue that they have today. For example, Howard Schultz, the chairman of Starbucks, has put a significant effort over the past years into making Starbucks more customer-driven. He has spread the idea of focusing on the customer throughout all of their stores. Schultz was quoted as saying, “Starbucks is not in the coffee business serving people. Starbucks is in the people business serving coffee.” A key success factor for this type of thinking is getting the
employees involved in the customer culture. He calls this a type of thinking, ‗Servant Leadership,‘ in which leaders focus on creating a shared vision for all employees. This fosters interdependence, honesty, empathy and managing with respect. Since
Starbucks is owned and operated by it‘s employees, not a franchise, it can act as one
organization, not functional silos, and they can all learn from each other.
Starbucks has
also been called A Third Place Experience Provider because this is a company that offers consumers a place between work and home to relax, meet friends, and enjoy a great cup of coffee. A pertinent aspect of focusing on the customer is Starbucks‘ ability to form emotional connections with their customers, which is what sets them apart from their competitors. Howard Schultz has said that Starbucks is, ―an extension of people’s front porch…an emotional experience‖. He has stated that the art of marketing today is the ability to build this emotional connection. At Starbucks, they have integrated themselves
in a way that is very different than simply selling a cup of coffee. – they have an emotional ―relationship‖ with their customers. In order to have a successful marketing plan, it is important to remember that it‘s not one thing, but a lot of things. In essence, it‘s not good enough to have just a good ad, but everything you do helps completes the circle (the packaging, the service, and the emotional connection). Schultz has recognized that people want to be a part of something that they can believe in. associated with a product that they can rely on. They want to be
As a result of these observations,
Starbucks has become a company that serves these emotional needs of customers, which is why they standout above all the rest. For years, Starbucks has been focused on reducing customer wait time (i.e. the need for speed). A Wall Street Journal article quoted Silvia Peterson, Starbucks director
of store operations, as saying, ―This is a game about seconds and how we can shave them off.‖ Statistics show that 64% of Americans say they pick a restaurant based on how
much time they have. Starbucks has implemented many innovations to speed up the process. For instance, Silvia and her team came up with the idea of bigger ice scoops,
so the baristas only had to dip once for ice. This innovation helped to cut 14 seconds off the average preparation time for blended beverages of about one minute. In 2003, they also implemented a staffer known as a ―Floater,‖ which has also helped to increase efficiency. This is the person that directs behind-the-scenes traffic (i.e. picks up the
slack wherever necessary – cash register, barista, etc). As a result of these changes, Starbucks‘ average yearly volume has increased by nearly $200,000 from 1999, to be roughly $940,000. Today, on average, it takes about 3 minutes less to complete an order today as compared to five years ago. Customers have mentioned that they like
the effect of Starbucks because it does not feel like they are waiting in line – it‘s well choreographed. Another successful marketing strategy for Starbucks is that they offer their customers a wireless connection within the stores. This allows customers to have quick and easy access to e-mail, files, or to the Internet. It offers an individual the ability to get
his/her work done in coffeehouse comfort – all from the comfort of your favorite cozy chair. Starbucks‘ website is presently offering a free day pass for T-Mobile HotSpot
service account, which makes it that much easier and more convenient for customers to stop by a Starbucks to try their wireless service. However, in order to utilize Starbucks
wireless service, an individual would need a wireless card, a notebook computer, or a Pocket PC. Despite the fact that customers seem to enjoy this technological innovation as an option to pair with their coffee house experience, there are still some improvements
that need to be addressed in terms of Starbucks‘ wireless connection. These areas of change will be addressed in the following section (Vulnerabilities). It is obvious that Starbucks is the most prominent force in the coffee house industry and they have achieved this market dominance for a plethora of reasons. Primarily, they have worked to obtain the best real estate locations. This is why you see so many Starbucks located near dry cleaners or video stores. They are taking
advantage of the work traffic, but at the same time they avoid locating stores in close proximity to fast food chains because they feel that this would attract less affluent customers. Starbucks also has maximum density in terms of a store‘s proximity to another Starbucks. On Starbucks‘ website, it states the new high in Manhattan, with a total of 169 stores within a 5-mile radius. They had a 10-year expansion plan, which was completed in 2001. It was what was called a ―hub‖ expansion strategy, in which the
Starbucks stores entered a new market in a clustered group. John Rutherford, CEO of Starbucks in 2001 states, " Our customers expect a high level of service and quick transactions, combined with the convenience of multiple locations.‖ Starbucks is a concept driven as much by real estate as it it‘s by coffee. It has taken a lot of real estate
to open up the 9,000+ Starbucks locations and it will take even more to reach their stated goal of 30,000 global locations. Starbucks also has a phenomenal creative team to develop and carry out the wide array of marketing strategies that they implement on a daily basis. These men and women are dedicated to passionately expressing the essence of Starbucks brand at every customer touch-point (i.e. napkins, paper cups, in-store posters, t-shirts, etc). One
of the reasons for the group‘s success is that they live the brand, which is why they can all articulate the brand so well. ―That’s our ongoing challenge here, to avoid being mundane, to continue to find the excitement in the product. As long as we keep
delivering that surprise to our customers, we’ll be successful - both commercially and creatively.‖ They also in-source before they out-source and manage based on more of a flat hierarchy (as opposed to more of a top-down management style). Finally, and probably most importantly, Starbucks offers mass customization to their customers. This is based on the theory that every customer is unique. As a result, Starbucks individually customizes their goods and services to create a unique experience for customers. In turn, customers are showing that they will pay much more for the entire experience, versus just a good or service. The proven benefits associated with the idea
of mass customization include improvements in sales, customer loyalty, and retention. In essence, when a company turns a good into a service and a service into a memorable experience, they are following the trends of an ever-changing economy. B. Joseph Pine, who wrote the book Mass Customization, was interviewed as saying, ―We have shifted from a goods economy (coffee beans in a can) to a service economy (hot coffee at a diner) to an experience economy (coffee sold in a special mug, in comfortable surroundings - Starbucks).” This type of customization is what differentiates a company from its competitors. Thus, a company such as Starbucks, has become known for being the company giving customers exactly what they want.
Vulnerabilities and watch out
Employee Union
The familiar aroma of dark-roasted Sumatra curls through the air. Most of the staffers are no older than teenagers, , store No. 7356 birthed the first-ever campaign to unionize a Starbucks—a movement that renegade Baristas hope will spread through the chain‘s 6,668 other U.S. outlets.
The trouble started back in May 2003, when Daniel Gross began work as a Barista at store No. 7356. He has piercing blue eyes, persistent stubble, and an easy laugh. He‘s also a ―Wobbly,‖ a member of the Industrial Workers of the World, the once-storied ―one big union,‖ which was largely stamped out after World War I and only partially revived by campus-activist types in the seventies. According to them
1. Starting salary of $7.75 an hour is a ―poverty wage.‖ 2. Hours are flexible. But they‘re flexible for the boss, not you!‖
3. The company calls employees ―partners,‖ but it‘s misleading. They‘re graded for greeting a guest within twelve seconds of arrival, and for mixing a Macchiato at the precise temperature and weight in grams. ‖
However Starbucks does offer comprehensive health-care benefits to two thirds of its workforce, those clocking twenty hours or more a week.
The NLRB‘s ruling is expected sometime this summer. A finding that Starbucks has engaged in unfair labor practices would be good PR for the workers, but that‘s about it. ―Starbucks is not facing any punitive damages,‖ Usually, the worst that can happen is
they‘re forced to post a notice that they‘ve been found in violation of the National Labor Relations Act.‖
It remains to be seen just how real things get. The IWW is a distinctly ragtag operation, with fewer than a thousand members worldwide (Starbucks has 80,000 workers in the U.S. alone). In a way, the Baristas‘ campaign offers the union more hopes and very volatile situation to management. ―Starbucks is selling an image more than coffee,‖ says the fired-up East Village Barista employee.
Just a Reminder, Recently Starbucks paid 18 million dollars to settle a lawsuit. The claim was filed on behalf of over 1,000 current and former managers and assistant managers in California stores who were classified by the company as exempt from overtime, while their jobs had management titles.
Exploitation to third world Farmer
1. ―‖...Starbucks paid an average of $1.20 per pound for higher-grade beans last year. This is only a few cents shy of the per-pound price for coffee that is certified Fair Trade—a designation that comes from a cooperative dedicated to ensuring that farmers earn a fair wage. A few American cents, in third world currency exchange makes a tremendous difference. 2. ―There is a crisis destroying the livelihoods of 25 million coffee producers around the world,‖ ―The price of coffee has fallen by almost 50 percent in the past three years to a 30-year low. Long-term prospects are grim. Developing country farmers,
mostly poor smallholders, now sell their coffee beans for much less than they cost to produce—only 60 percent of production costs in Vietnam‘s Dak Lak Province, for example. Farmers sell at a heavy loss while branded coffee sells at a hefty profit.‖
―For many coffee-producing countries, plummeting prices are devastating their national economies. Central American countries have seen revenues fall 44 percent in past year. In Ethiopia, coffee export revenues declined 42 percent. In Uganda, where a quarter of the population depends on coffee for their livelihood, coffee earnings dropped 30 percent. ‖For individual farmers around the world, declining prices have pushed them to the edge of survival, or destroyed their means of livelihood altogether. Tens of thousands are losing their land in Central America alone, and thousands of plantation workers have been thrown out of work.
Fair Trade and Foreign Policy
―Are Starbucks brewing fair-trade coffee today?‖ The answer, across the counter and the country, is no.
Here‘s why Starbucks should all care about fair-trade coffee: It‘s the humane thing to do. The world‘s coffee farmers in Latin America, Africa and Asia are in grave trouble. The world market rate for beans is about 60 cents per pound — down from a high of $3 per pound in 1997 and less than half of the $1.26 price for fair-trade coffee made from conventional beans. Fair-trade, organic, shade-grown
coffee costs $1.41 per pound on the world market. So along with bypassing the pesticides and other chemicals in your own body, you help the families that grow your morning supply of beans. ―Shade-grown‖ refers to a method of growing coffee that is least harmful to the environment. ―The way to help the coffee growers is to buy fair-trade, organic coffee.
Starbucks has reeled off 12 straight years of increased sales, topping $4 billion in 2004. The world‘s biggest coffee retailer purchases one percent of all coffee on the globe, but less than one percent of that is fair-trade. ―A big part of the company‘s strategy is to grow internationally,‖ But eventually the pressure overseas will be so great on the fair-trade issue that Starbucks won‘t be able to expand without making concessions.‖
-Donations to the War Starbucks donated 50,000 lbs. of coffee to US Troops in Iraq, sparked some intense debate. Company policy has always been to avoid donating to causes with political/religious connections. Double-edged sword - how can Starbucks show support for the Troops, without showing support for the war?
Company’s milk policy
While innocent consumers might be silly enough to believe milk is good for you, a coalition of activists claims the opposite. According to Ronnie Cummins of the Organic Consumers Association, as much as 90 percent of American milk is ―contaminated‖ with
―pus, bacteria, and antibiotics.‖ Starbucks is just a bit player and tactical target in this saga. And Consumer Reports notes that numerous studies ―have concluded that milk from hormone-treated cows poses no appreciable risk to humans.‖
But inflamed concerns over genetic engineering have prompted a number of countries, including Canada and the European Union, to block the use of the drug internally while allowing imports of food made from the dozen or more countries that allow the use of rbST.
Why pick on Howard Schultz? Because, if activists get Starbucks to ―surrender‖ and dump all food that includes bio- ingredients, the really big fish—food suppliers like Kraft and the national grocery chains—will roll over, too. In other words, aim at a high-profile company like Starbucks that is vulnerable to challenges to its reputation for being ―socially responsible.‖
Starbucks‘ executives are trying to figure out how to pull the company‘s beans out of this public relations bonfire but so far, they have looked pretty hapless. More than a year ago, Starbucks embarked down the path of surrender when it declared that it would soon provide ―safer milk‖—that did not come from cows treated with rbST. That was like lighting a match to kerosene. As activists duly noted, why was one of America‘s most noted brands callously risking its customer‘s health by offering ―less safe‖ milk?
Whether fears fueling this controversy are more foam than substance, all sides agree that how Starbucks navigates the genetic engineering debate will have considerable effect on
the American dairy and agriculture industries. Let‘s hope that Schultz and company recognizes that acting responsibly means rejecting extortionist threats and, once and for all, rejecting hysteria as the measure of corporate social responsibility.
Decline Of Coffee Production, and high demand in China
Brazilian coffee growers, the world‘s largest exporters have been replacing their coffee trees with sugarcane and soybeans, and the Colombians have been supplanting coffee trees with coca plants, because of less profit.
For this reason, the effects of the shortage created by all of the growers that left the industry during the glut years of low prices is beginning to be translated into higher prices for the consumer.
The second factor, of course, is the one that plays a part in the fate of almost every commodity these days – China. Right now China accounts for only one percent of world coffee consumption, but the popularity of the drink appears to be increasing. Starbucks
(NASDAQ:SBUX) has been able to find enough Chinese coffee drinkers to justify opening 160 stores there since 1999. Coffee producers are hoping that China will go the way of Japan, which emerged, from a traditional tea-drinking nation into what is now the world‘s third largest consumer of coffee. If this happens, watch out. As investors know from any promotion involving China, multiply something by a population of 1.2 billion and the potential reward is always humongous.
Add to that the consequences of coffee growers shift and a new coffee-drinking zeitgeist amongst China‘s burgeoning urban middle class, and we can see how things could really start to percolate. At Starbucks one should not be surprised to see a rise in the price of their mocha-half-frap-no-fat-latte, but may well be able to counteract that painful eventuality with a timely and well-placed speculation.
In A Starbucks Dominant Market
Guess who the biggest rival to Starbucks is? Would you think Dunkin Donuts? ―Starbucks may own their experience, but Dunkin is nipping at their heels,‖ ―Starbucks can‘t touch Dunkin .In fact, ―Dunkin Donuts is a beverage business-it‘s all about coffee. For Example In western New York, 50% of their sales are beverage-based, or premium things like bulk beans. Donuts are only about 25%.‖ Starbucks itself is in a growth mode. Add to that not only Dunkin Donuts, but Krispy Kreme, Gloria Jean’s Coffees, It’s a Grind, Saxby’s Coffee and Tea, Java Dave’s Coffee House, Bear Creek Coffee, The Coffee Beanery, Port City Java, World’s Best Coffee, Rockn’ Joe, Java Jo’z, PJ’s Coffee and Tea, and Javaology, and it begins to look like a java franchising tsunami. All of them, of course, are trying to out-Starbucks Starbucks. Is Starbucks vulnerable? Not in the sense that they can be replaced, according to the caffeine gurus. But there‘s plenty of room for the others according to the Specialty Coffee Association of America, next to military arms and oil, coffee is the largest commodity-based industry in the world. It has an annual sales volume of over $10 billion.
It is consumed by 65% of North Americans and is the second most popular drink in the world next to tap water.
Starbucks should watch out for 1.Starbucks has raised the awareness level—they‘ve been the pioneers that have brought specialty coffee to the mainstream. Once people have their first experience in what they consider a safe place, a national chain, then they tend as consumers to expand their horizons and say, ‗Here I am in front of the independent and I‘m going to try the independent.‘ ―
2.What looks like a simple business is actually complicated,‖ ―Company is really selling an experience. Price is not a top ten factor when people choose a coffee house. They like friendly employees who know their name—like Cheers. Dunkin Donuts is becoming a community center for neighborhoods.
3.The industry has reached almost 18,000 locations according to the Specialty Coffee Association of America—far more than the 10,000 outlets the SCAA predicted in 1999 would be the peaks. Think it‘s hit a peak? Consider the 23,000 locations for Subway, and add the tens of thousands of other fast food places. ―The market is tremendously underserved,‖ ―Now 77% of the population is drinking gourmet coffee, either hot or cold. In 1998 it was 35%.‖So, credit Starbucks, but don‘t expect the trend to stop.
International Competition, In February, Starbucks Coffee Japan said its operating profit fell 70 percent in the nine-month period to December 2004 amid rising costs and
intensifying competition. In March, Starbucks Coffee International decided to pull out of Israel, closing its six stores there due to ―operational challenges‖ in the market.
Starbucks could also be vulnerable to anti-American boycotts in the wake of the Iraq war. ‖Three years ago, the debate was whether Starbucks would be successful abroad? Now the question is how they will fare against mounting competition in the form of knock-off chains.
Voice marketing
―The Starbucks brand sells a cozy environment and brews up strong coffee.‖
Is ‗voice marketing‘ or ‗voice branding‘ the real issue? For brands that have a distinct personality, they seem to abandon that personality when you call their toll-free customer line. Instead of hearing the unique brand voice the company has carefully crafted, you are subjected to hearing a milquetoast, monotone, and slow-cadenced voice that sounds nothing like the brand you have come to know and appreciate. Before brands engage in voice marketing Spam, I think they should first perfect their brand‘s voice on their automated phone system. And who knows ... if they make their voice brand engaging enough, maybe we will not consider their telephone outreach efforts to be Spam.
Cyber-attack against Starbucks shows what to do when a crisis brews
You walk into your office, sit down with a cup of coffee and begin your regular morning search for online news clips. Instead, you come across a Web site that sends you into a cold sweat.
Your company is being terrorized by an online public relations assault. The site features a call to action, mobilization plans and a schedule of upcoming protests. Your trademark has been bastardized to promote the campaign. And everyone can see it.
That may have been how Starbucks‘ officials felt three months ago when they got wind of an impending online attack from the Organic Consumers Association, a group devoted to eliminating all genetically engineered food.
Did Starbucks cave in? Starbucks surrendered to ―thugs‖ and now suffers from ―battered socially responsible syndrome,‖ Starbucks brags about its record of ―environmental leadership,‖ but now the company has become a punching bag for the groups it is trying to appease.‖ It was a stupid move with no scientific reason,‖ of Starbucks ‗ goal to offer only rBST-free milk.‖ These groups who attacked Starbucks are some of the same anti-technology extremists who supported the multimillion-dollar vandalism in the gourmet coffee retailer‘s hometown and several of its storefronts during the 1999 Seattle [World Trade Organization] riots. Some of them are Starbucks‘ competitors. They don‘t care about science; they only care about money.‖
―Starbucks is going to do their best to find ingredients that are not biotech-produced.‖ And those ingredients are hard to find,‖ It‘s best to ―stand up to the bullies,‖ but notes that
Starbucks is new to activist warfare. ―They‘re doing the best they can. They don‘t have the experience and education like Kellogg‘s or the others.‖
But I think Starbucks‘ cave-in only makes the company vulnerable. Finally, ―Starbucks should wake up and smell its own coffee before it gets an offer it can‘t refuse,‖
There are many actions Starbucks should take in the future to keep the company financially strong. They include promoting the locations as a social gathering environment, expanding internationally, keeping pace with changing technology, placing product strategically, augmenting streams of revenues, keeping ownership concept, and keeping it an experience. Starbucks should partner with meetup.com, an online website dedicated to helping people get together to learn something new, do something new, share something new, or change something old. The typical people who attend meetup.com meetings are between 18 and 35, single, educated, and socially and politically conscious. By providing a venue for meetup.com, Starbucks can bring in its target consumer, sell them their products and it is also a great marketing concept because it shows Starbucks aligning itself with the purpose of the meeting. It also, gives these people a social gathering location other than bars. Another critical success factor is to expand internationally. Two countries that would be a great place to continue building up a Starbucks presence are China and India. Starbucks can bring the culture of Western tradition internationally and make Starbucks a social gathering experience around the world. Starbucks already has over 8,000 stores
worldwide, over 2,700 of which are outside the United States. The long-term goal will be to have over 30,000 stores worldwide. Foremost though, it is imperative to understand the cultural and social environments of each country before beginning to establish a sales presence overseas. The target market would be the top 10-15 % economic class. China is a great place to expand into. It is the most populous country in the world with a large middle and upper middle class. Its economy is growing rapidly. Originally, China was a group of tea drinkers, but Starbucks successfully penetrated the Chinese market with coffee with its social networking strategy. Currently, there are over 100 stores in China and continue to grow. India is the 2nd most populous country and is another great place to expand into. India has the potential for 5,000 stores in the next 5 years. However, government regulations differ in India than the United States. For example, United States stores are company owned, but in India, Starbucks requires a joint venture with local players. This requires a different thought process for the company that needs to be investigated. Another area Starbucks needs to be cognizant of is changing technology. For example, Starbucks has already begun installing Wi-Fi Internet access throughout its stores with a partnership with T-Mobile and HP. It also recognizes the demand for music, especially among the age bracket of its customers. It therefore has begun installing in store CD burning ability. In addition to these changes, there are other opportunities for Starbucks. They need to provide Internet kiosks where customers can browse the Internet, read email, and send instant messages. The business professional can also benefit with abilities to access Microsoft Office, ftp company files, and telnet into business
servers. Also, Starbucks could provide movie listing start times. This would allow someone to see when a movie was starting. If the movie were starting in 30 minutes, then the customer would relax at Starbucks drinking his or her favorite Starbucks beverage. Finally, another great idea would be to partner with a third party vendor and install a point of sale system in Starbucks. Market research would determine which products were most popular for the demographics of customers. This would allow Starbucks to sell at its kiosk anything from cell phones and cell phone service, to MP3 players, to golf and tennis equipment. Product placement is another important area Starbucks needs to understand and get acquainted with. Today, consumers are time conscious and combined with TiVo, a device that lets viewers skip commercials, marketing is taking on a new form. Product placement has been around for many years. Sales of Reese‘s Pieces spiked after the movie E.T. was filmed. More recently, The Apprentice, is one hour long advertisement. Even in sports, like NASCAR, advertisers have blended the product and marketing into one amalgam. The movie You’ve Got Mail, featured AOL and Starbucks and it is this type of marketing alliances that need to continue. Eventually, Starbucks can align itself with movies, TV shows, magazines, video games, Broadway shows, and sporting events. Every company needs to increase their streams of revenue. They need to expand their variety of products offered and then successfully market these new products. In addition to coffee, they need to sell and market tea, gourmet deli, chocolate and pastries. Starbucks can become a place where people go for lunch when they want quality and ambience. By selling other products in the stores, it allows Starbucks to market other
products outside the store. It will sell supermarket items like ice cream and chocolate. It will brand itself with a credit card company. Once it successfully aligns itself with chocolate, it could make itself an attraction at Hershey Park. Another idea to investigate is a drive thru service. Other types of business have a drive thru service like fast food, pharmacy and banks. It would save time and hassle for customers. Before this idea becomes a reality though, market research needs to be done to determine that customers do indeed want this type of service. After it is determined to be a want, then there needs to be a trial market first. If that is successful, then it can expand rapidly. However, if it is unsuccessful, then it can be abolished with minimal detriment. One caution to note though is that this idea cannot degrade the experience or the brand of Starbucks. Doing so would risk the brand and its associated status symbol. Ownership concept is key to Starbucks. It has been around since its inception. Starbucks needs to continue this practice. Employees are stakeholders in the company‘s success and need to feel appreciated and need to want the company to succeed. Finally, keep it an experience. Starbucks differentiates itself from other places because it is the Starbucks experience. In conclusion, Starbucks produces gourmet coffee and is a social experience and this needs to be marketed to the targeted consumers. It needs to stay focused on the customer to ensure continued success and ward off constant threats. It needs to capitalize on opportunities like expanding internationally and creating additional revenue streams