It can also be established through the case that Starbucks operates approximately seventy percent of its business in the United States. However, in recent years it has been focusing growth and global reach. It has lost focus of its current problems by overly concentrating on long term potential. It has been eyeing Asian markets rather than satisfying its US customer base that constitutes the majority of its business. It is not focusing on its market orientation towards the United States coffee market. For example, it has failed to respond effectively to fast foods creeping into coffee retailing and address issues tainting its corporate image. Expansion at the cost of diminishing brand value is the worst strategy that Starbucks can follow. This lack of focus can also be seen by its revenue streams, wherein, the revenue from licensing activities has been growing at a staggering rate as compared to revenue from core business activities i.e. food services.
Starbucks problems have been rooted in its own internal strategy that is threatening its business and profitability. Environmental factors such as economic downturn and competition have been adding to its troubles but Starbucks’ real troubles have stemmed from its uncontrolled expansion at the cost of its core business. It operates in the market segment of specialty coffee, builds it brand value on corporate image and operates in the premium pricing segment. If it continually focuses on its brand management, marketing the coffee experience and as a result retaining its wealthy customers these external threats cannot affect its business.
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