Starbucks was incorporated on 4th November 1985. It began as a roaster, marketer and a retailer of coffee. As of October 2016, the company is operating in 75 countries in different continents including USA, Canada, Latin America, China, Europe, Middle East and Africa. The company has been committed to the purchase and roasting of coffee that it sells along with handcrafted coffee, tea together with other beverages. The company sells its products under various brands. Through its spirit drove toward commitment and provision of the best services, the company has employed various strategies that have seen it made predictable profit margins.
The company adopted a customer relationship management that involves efficient service delivery, provision of competitive sales and good marketing strategy. The cross profits have been rising steadily since 2012 until 2016 as reported by Hoovers (2017). Moreover, its outstanding performance has seen the company overtake its competitors on fair grounds. It has been able to overtake companies such as the McDonalds among other competitors. This paper seeks to give statistical data on how Starbucks currently operates, their popularity, returns as well as their position in the market in comparison to their competitors.
Starbucks (2016) reported that the food services generated profits in 2016 accounting for 3% of the total revenues made by the company. While trying to meet the consumer needs, the company employed the use of customer relationship management by offering coffee in varied products and means. It managed to sell roasted coffee and ground coffee to institutional food service companies, hotels, restaurants, retailers, and distributors among others.
Starbuck (2016) annual report gives a detailed report on how the company spends in marketing its products. The marketing expenses included many components including advertising costs. According to the report, marketing expenses did const the company a total of $378.7 million in 2016 and $351.5 million in 2015 in fiscal. This shows that the company has been committed to meeting consumer needs by making adverts that are appealing to them.
From a superficial analysis of the 2016 Starbuck annual report, the popularity of Starbucks has been rising over the years. The popularity can be attributed to its quality service provision and the uniqueness of its coffee. Starbucks takes pride of its unique coffee roast which is darker than most of the other brands of coffee. Its coffee brand offers a more original and traditional flavor. However, its popularity has experienced some competition from the Dunkin Donuts and the McDonalds. Nevertheless, the global existence of the Starbuck branches has enhanced its popularity making it reach more customers than its competitors. Its products, whose quality is maintained worldwide, reaches its customers quickly through the outlets set up by the company and its sales representatives who represent the company.
According to Starbuck (2016) annual report, the consolidated results of operations of the Starbucks showed that the total revenues accrued by the company increased as compared to the 2015 revenue. The total net revenue showed an increment of $2.2 billion, 11% over fiscal 2015. This increment was attributed to the increased revenues from the company-operated stores. The company revenue reflects its success. There has been an increment in the revenue margins for the past ten years, and the global expansion has also been rising. Starbucks has increased its number of establishments by around 2,600 during the year 2015, giving a total of 23,043 stores worldwide at the end of the fiscal year. However, more than half of the branches are found in its mother country, the US. The annual report showed that an estimated millions of people are visiting the stores every month.
According to smarter analyst (2015), besides having the largest number of stores in 75 countries all over the world within the coffee chain industries, Starbucks has been able to generate fast revenue. McDonald’s has been competing with Starbucks closely. Moreover, within a broader quick-service industry, McDonald’s emerged the best valuable fast food brand in 2015 followed by Starbucks. Regarding revenue generated by each company per annum, McDonald’s yearly revenue has been dropping drastically since 2013.
According to 2015 annual report, McDonald’s total revenue was at $ 25,413 million which was higher than Starbuck’s revenue which was at $21,315.9 million. Despite dropping in performance, McDonald’s has been performing better than Starbucks. Moreover, 2015 coca cola financial report shows that the company’s revenue was at $ 5,093.6 million. In comparison with Starbucks, Coca Cola is far much behind Starbucks in terms of the revenue generated.
In light of the above instructions, Starbuck is a company whose progress is attributed to its strategic plans on how to do business. The company prioritized on the consumer needs thus capturing the market easily. The Customer relationship management adopted worked and thus the company managed to increase its revenue and expand its business worldwide.
