The Success of Starbucks
If you have ever walked around any metropolitan area, you will notice you are never more than five minutes away from any given Starbucks. In my neighborhood, in New York City, there are three Starbucks locations less than a few blocks away from each other. A quick search of “Starbucks near me” on Google will show you clusters of red dots on the map representing Starbucks locations. With such a strong presence, you may be wondering how Starbucks managed to take its place at the end of every street across the country.
Starbucks first emerged in 1971. They swiftly expanded to 84 stores by 1990, to 3,501 stores in 2000, and now has just under 17,000 stores in the United States alone (Starbucks, 2011). In 2017, BMO analyst, Andrew Strelzik, says “there are now 3.6 Starbucks locations within a one mile radius [of any other given] Starbucks in the US relative to 3.3 and 3.2 stores in 2014 and 2012 respectively” (Franck, 2017). The concentration of Starbucks stores relative to another Starbucks location has increased within the past few years. Starbucks has quickly become a household name for coffee and other beverages. The coffee chain has managed to expand rapidly and maintain many locations compared to their competitors. There is clearly a high demand for Starbucks. But, what makes Starbucks different from other coffee chains, and how has it been able to maintain its market share?
Starbucks has redefined drinking coffee. They have created a third location outside of work and home where people can enjoy coffee and still experience the comforting atmosphere drinking coffee provides (Margalit, 2020). Starbucks has managed to sell the inviting experience of a “coffee break, ” according to Dr. Liraz Margalit, a customer behavioral specialist; she states, Starbucks “doesn’t compete with other companies, it competes with going to see a movie.”
Starbucks is “consistently convenient.” If Starbucks stores are conveniently located at the end of every street, you will probably go to them because it’s more practical than going to another coffee store a few blocks away. As more stores open, they become more convenient for customers, and thus, more popular. Or, if Starbucks initially has a high demand at a certain location, then a solution would be to build another Starbucks location nearby (Hennessey, 2021). Both theories explain the clusters of stores.
In addition to extending the coffee experience to outside the home, Starbucks has brought their coffee inside customers’ homes as well. In 2000, Starbucks began selling its “ Fair Trade Certified Coffee” (Larkin). Starbucks’ consumer packaged goods are available in “grocery stores, airports, hotels and convenience stores in nearly 40 countries in the world,” states Michael Conway, international and channel development of Starbucks. Starbucks products are no longer limited to being purchased in stores. Conway further emphasizes Starbucks' extensive reach to consumers’ by speaking on the success of the “S’mores Frappuccino” drink. Conway specifies, “S’more Frappuccino is being introduced in Starbucks stores later this month and a bottled version is now available ... allow[ing] us to grow in a meaningful way for customers” (Starbucks, 2015).
Starbucks has become a giant in the coffee industry because it capitalizes their ability to sell an “experience” for its customers to enjoy, meets and creates customer demands, and extends their unique Starbucks ambience and products to beyond their stores.
Edited by Sharmila Radhakrishnan
Works Cited
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