Starbucks

Advantages of Starbucks
- Stay innovative by introducing new beverages, and technologies that will attract more customer
of various ages during different times of the day.
A large product range is also a key strength of Starbucks. It keeps experimenting with flavours to
add to its range of coffee products. Apart from coffee, it also sells tea and snacks. The large
range of flavours brings variety to the table. Every customer can have a fulfilling experience and
can find his choice from the large range Starbucks offers. Higher variety has led to higher
popularity. This is a distinct feature of Starbucks. A large and differentiated product range is also
a source of strong competitive advantage.

- Starbucks still growing and opening it doors internationaly.

The large and global store network of Starbucks is also a critical competitive strength. There are
29,324 Starbucks stores open worldwide. This is the largest network of all coffee brands. The
highest number of these stores are in US. There are 14,606 Starbucks retail stores in US and
17,454 in the entire Americas. The company has also managed a balanced mix of company
owned and licensed retail stores. 52% of the total are company owned and 48% licensed. The
company has smartly managed its global presence. After US, China is the largest market of
Starbucks. There are 3,521 Starbucks stores in China. Its large retail network is also a source of
competitive advantage. Growth of its international network has also strengthened the brand’s
advantage over rivals.

- Own the customer relationship.

Starbucks also enjoys very high level of customer loyalty. It is a result of its focus on quality and
customer service. It has managed every aspect of the Starbucks experience to offer each
customer a fulfilling experience. Appetizing coffee choices and a welcoming environment have
made it the favourite of millions. Customers keep coming back because the experience is always
fresh. High level customer loyalty means higher profitability and revenue.

Disadvantages of Starbucks
-High price
Starbucks use high cost of coffee beans to make a coffee. It has a high production cost to make a
coffee. For example, cost of employees is high because working at Starbucks will require
communicating by using English language, the location of the Starbucks must be at a very
crowded place so there will be more customers and it require a higher cost for rental.

-More competitors
There are a lot of competitors in the coffee market today. Coffee Beans, McDonalds’s McCafe,
Dunkin Donuts and others are the major competitors of Starbucks. All of the restaurant starting
to sell coffee as well as the food because of the demand of coffee increase. A lot of consumers
willing to spend their money in buying a cup of coffee from the competitors which could be more
cheaper compare to Starbucks.