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Individual Management Report. Starbucks Corporation Ltd. Marketing Audit and Strategy
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Starbucks Coffee Company is one of the great growth companies of our time (Michelli, 2007, p.1). It is the premier purveyor of the finest coffee in the world. Starbucks Coffee Company was founded in 1971, opening first store in Seattle’s Pike Place Market. Company is named after the first mate in Herman Melville’s Moby Dick. Now it is the world’s leading retailer, roaster and brand of specialty coffee with millions of customer visits per week at stores in North America, Europe, Middle East, Latin America and the Pacific Rim.
All Starbucks stores offer a choice of regular and decaffeinated coffee beverages, cold blended beverages, a wide selection of Italian-style espresso beverages, iced shaken refreshment beverages, a selection of teas and distinctively packaged roasted whole bean coffees. Starbucks stores also offer a selection of fresh pastries and other food items, sodas, juices, bottled water, coffee-making equipment and accessories, a selection of compact discs and seasonal novelty items. Each Starbucks store varies its product mix depending upon the size of the store and its location. Larger stores carry a broad selection of the Company’s whole bean coffees in various sizes and types of packaging, as well as an assortment of coffee and espresso-making equipment and accessories such as coffee grinders, coffee filters, storage containers, travel tumblers and mugs. Smaller Starbucks stores and kiosks typically sell a full line of 2 coffee beverages, a limited selection of whole bean coffees and a few accessories such as travel tumblers and logo mugs. A selection of prepared sandwiches and salads were carried in approximately 4,800 United States (U.S.) and 1,600 International stores, at the end of fiscal 2007. Starbucks continues to expand its food warming program in the United States, with over 3,000 stores as of September 30, 2007 providing warm food items, primarily breakfast sandwiches (Starbucks Corporation, 2007).
Starbucks is viewed as one of the great business success stories in the past two decades. Company’s sales have increased an average of 20 percent annually since the company went public in 1992. Starbucks now operates well over 1,000 international outlets, with hundreds more on the drawing boards. A large portion of its international business is in Asia, where it has 850 locations (in Australia, Indonesia, Japan, Korea, Malaysia, the Philippines, New Zealand, Singapore, Taiwan, Thailand, the Chinese cities of Beijing and Shanghai, and the Hong Kong) (Harrison et al. 2005).
Starbucks has been so successful that it may seem untouchable - unavoidable. But it is not like that. In fact, the company has had a very difficult year. Customers’ traffic at U.S. stores dropped for the first time in its history, and then comparable-store sales - a key measure of a retailer's health - turned negative too. “Its stock has slid some 40% in the past 12 months, shaving more than $400 million from Schultz's personal bean pile (Time, 2008).” The U.S. financial crisis has hit coffee sales at Starbucks, with an “extremely challenging” period forecast for fiscal year 2009.…
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