Assignment First










Excellent Brand Equity: Starbucks has become synonymous with coffee. Starbucks is easily the most recognizable coffee brands worldwide, as well as a globally renowned brand (Trigeorgis & Baldi, n.d). Its strong brand value is a huge intangible asset to the company, and part of its success story. Its strong brand image has helped it expand so rapidly and successfully.
Very Strong market position: Starbucks continues to expand on its market share, despite saturation setting-in in the industry (Hennessey, 2012). Starbucks quickly edges out the competition with its rapid opening of stores, hence giving it a competitive edge when it comes to Market position.
Use of the best raw materials: Starbucks uses the best quality of ingredients, as its philosophy is to serve the best coffee to its customers. Starbucks sources its coffee from the best farmers through its responsible buying programs (Starbucks, 2014). [Appendix 1]
Excellent Ambiance and ‘A Place for Everyone’: Starbucks has a very aesthetic and pleasing ambiance. Customers know what to expect as soon as they enter one of their stores (Hennessey, 2012). Apart from coffee, Starbucks caters to a wide variety of options on its menu. Its reasonably priced products have a great market appeal, thus, making it a place for everyone (Hennessey, 2012).
Customer Loyalty: Starbucks thrives on its customer loyalty and its marketing is done mostly by word of mouth. Infact, Satrbucks spends a miniscule 1% on its marketing expenses compared to other Coffee Stores globally (Wahba, 2014).
Over-reliance on American Stores: Starbucks has about 7049 stores in USA alone, compared to its 10194 stores worldwide (Starbucks Corporation, 2014) (including USA). Hence it has only 3145, less than half of USA, stores outside the USA (Starbucks Corporation, 2014). It comes as no surprise that the majority of the revenues come from within the USA. Hence, it puts an over reliance on the stores in USA. With the USA coffee market reaching a saturation point, it could be a major downside for Starbucks in the future.