Before any suggestions can be made to Starbucks concerning what they should do to remain competitive, it is essential to determine where they are at the current time. According to its annual report, its web site and Hoover's Online, the company's chairman Howard Schultz, estimates the coffee company will hit 20,000 stores before its reign is over. "It is the US's #1 gourmet coffee purveyor with nearly 4,000 locations in the US and about 20 other countries" (Hoover's Online). The coffee shops are ubiquitous and are located almost wherever there is free space in office buildings, shopping centers, airports, and bookstores. "Starbucks' strategy is simple: Establish its name everywhere. Having conquered the US, the company is invading Europe, where it plans to enter at least six new countries and open an additional 650 stores by 2004" (Hoover's Online).
Here is a summary of its sales for the year 2000.
These sales results give one benchmark of the company's competitive advantage. Almost 90 percent of its revenues come from the US, a market that it basically created, and one that is now being exploited by strong competition. It's desire to open overseas, seeing the Non-US territories as conducive to profits suggests that this is the area in which a competitive strategy can be instituted. Before we settle on that area, however, we must look at other figures provided by the company's annual reports.
Next, we must consider its products that created this sales profile. In this next table, we will list the primary revenue producing products, a range of mass consumer interest (High, Average, Low) followed by the perceived competition threat (Very High, High, Average, Low) in that product category.
Starbucks Barista Athena espresso machine
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