What Is Starbucks Worth Today?

Starbucks in the Age of Interconnectedness

The concept of the world being flat has been extended beyond geographical boundaries. Globalisation is not an expansionary mindset anymore and it is a strategic imperative to identify growth opportunities. The organizations are looking beyond their markets.

Digital and social marketing practices have led to a level playing field for both customers and businesses. Price wars are becoming more common. How can organisation maintain their core brand identity in a world of interconnectedness?

Businesses at both local and global level have been severely impacted by the global recession. The question is whether there is a constant need for brands to adapt or face extinction if they practice consistency. Starbucks has been expanding quickly and strategically.

In 1996, it opened its first international store in Tokyo, followed by the UK in 1998 and the first Latin American store in Mexico City in 2002. The brand opened its first store in Vietnam in the year of 2013), after increasing its footprint to cover Russia. In February of this year, it entered Brunei, the 15th market in the Asia Pacific Region and the 64th market globally.

In 2015, it opened stores in Panama and achieved 99% of ethicallysourced coffee. Starbucks has spent a lot of money on various marketing campaigns. The company invested around 200 million dollars on campaigns during the low growth phase.

Starbucks: A well-known business model

Starbucks serves a wide range of delicious drinks, including hot and cold drinks, whole-bean coffee, instant coffee, and others. It also serves loose-leaf teas. There are also pastries and snacks from La Boulange.

Starbucks has a lot of different customer based offers. The business model of Starbucks is based on the company it provides to its customers and architecture and networking partner for the creation, delivering and marketing value formulated from valuable revenue streams. Starbucks has a lot of different marketing strategies.

It has received a lot of success through its business model. The business model is unique because it uses the Classic Logo to engage more loyal customers. The logo is designed to get a large audience base.

The other thing is how it presents its advertisements. The customers feel comfortable with the store, cup design, digital content and many others. The audience connects with Starbucks more because of that.

The third source is sales of packaged tea, coffee and other instant beverages to customers outside of the company-operated and licensed stores. Premium coffees, food items, Whole bean Coffees and others are included. Starbucks has a well-known business model.

The Starbucks Company

The coffee beans are transported to the Starbucks facility for storage and refinement after being picked from the farms. They undergo a roasting technique by Starbucks that increases shelf life. The beans are packed and sent to the distribution center.

The company relies on native suppliers to maintain the quality of coffee beans, and does not involve third-party vendors as of now. The company has more than 32 thousand stores in 83 countries. Around 80% of Starbucks revenue comes from company-owned stores and the rest comes from its monitored facilities and sister brands.

Starbucks has one of the most aggressive marketing strategies in the industry. The company invests a lot to maintain the highest standard of customer satisfaction. Starbucks has been around for almost 50 years and has a strong infrastructure in almost every department.

Starbucks has several other regional offices around the world, but the main office is in Seattle. Starbucks has over 349,000 employees worldwide, including baristas, brew staff, corporate employees, and so on. Starbucks has an employee satisfaction rate of over 80 percent, which is the highest in the food and service industry.

Value Chain Analysis of Starbucks

A value chain studies the value added at various intervals through a series of activities that aim to create profitable value for a product offering. Porter talks about value chain analysis from multiple angles. There are a few essential components to be aware of when beginning to understand value chain analysis.

Primary and secondary activities are usually the main activities of value-chain business. The creation of a good or service is the primary activity. The support activities help in enhancing the efficiency and work of an offering to obtain a stronger competitive advantage.

There is no middleman in the selling of Starbucks products. Most of the products are sold in stores. Storage and distribution to retail locations are important.

Aggressive marketing is not as effective as Starbucks invests in superior quality products and a high level of customer service. Sampling in areas around the stores is one of the need-based marketing activities carried out by the company. The supply chain has procurement integrated across it.

Porter talks about procurement as a support activity. Many companies will have standards for their procurement dealings. The procurement relationships vary widely.