Starbucks Business Model : How it became godfather in coffee Industry ?

By Startup Authority April 7

To think of a good coffee is to think of Starbucks. Starbucks is an experience designed so that the simple fact of having a coffee becomes so relaxing, pleasant and attractive moment. Starbucks business model is much more amazing than its experience.

In addition, the customer are able to personalize their coffee, as Starbucks has managed to create a unique service in which customers become the protagonists of its business model .

The Idea behind Starbucks

The real change and take off to success came when Howard Schultz joined Starbucks. After a trip to Italy he was impressed by the country's coffee shops and decided to bring that same atmosphere to American coffee shops, but the idea was rejected by most of his people & friends.

Howard Schultz decided to start the business alone and started his first coffee shop with the name Il Giornale in 1987. It was so successful that he would end up buying the chain of coffee shops from his former bosses, thus creating the Starbucks chain. Since then, its growth has been exponential to the point of having more than 15,000 stores around the world .

Starbucks Business Model

Starbucks business model is based on a value chain model . This model is based on carrying out a series of activities whose main objective is to add maximum value to a service or product , in this case the exclusive Starbucks coffee.

Additionally, Starbucks offers a unique, high-quality experience for each of its customers . Impeccable customer service, a pleasant atmosphere, a unique coffee… everything revolves around giving the customer the chance to experience a new way of drinking coffee, in a personalized way, and with the aim of building customer loyalty .

Each part of the process has an added value that, added to the final experience, makes having a coffee at Starbucks an exclusive experience that the customer will not find in any other coffee shop. It is what allows Starbucks to differentiate itself in the market.

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Starbucks Target Customers

The key customers targeted by the Starbucks service are lovers of exclusive and good quality coffee.

It is therefore a massive market in which anyone who wants to have a good coffee is a potential customer for Starbucks.

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How does Starbucks get customers ?

The main channels through which Starbucks gets customers are :

Social networks: this space is where a good brand image is generated by "word of mouth" of customers who have already tried the Starbucks amazing experience.
Cafeterias : it is the main hub of the brand from where Starbucks offers its service and maintains a direct relationship with the customer.A Starbucks cafateria itself is a hub for coffee lovers.
Starbucks Application : customers can learn about all the brand's products, locate the nearest coffee shops or save your drinks to your favorites list
Website : Starbucks offers its own page where you can place orders, discover the brand's news and promotions, and learn about its extensive menu that includes a lot. more than coffee

Starbucks key features

The key features of Starbucks that makes it unique are :

Development of new products: they show a constantly renewed brand image. This allows us to meet customer demand at different times of the year.
Control of the supply chain : Starbucks is responsible for carrying out a careful selection of the best coffee beans in each part of the world, green and unprocessed, directly brought from the farms. Supervises the transport, storage, roasting of the coffee and packaging for its subsequent distribution
Marketing and advertising : the company carries out, from time to time, campaigns aimed at publicizing its new products, even offering customers the chance to try them for free in its stores
Technological development : Starbucks is much more than having a good coffee. In addition, the company offers the possibility for customers to use its facilities as an office, connecting to a Wi-Fi network. It also offers a rewards program, or an application to order online at the moment or check the availability of products in a specific coffee shop.
Customer Service : Training skilled workers and excellent baristas is one of the key points in the success of Starbucks. The client will feel accompanied at all times, advised and in the hands of qualified and expert personnel in offering a service according to the prestige of the brand.
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Starbucks customer relationship

The main and most direct relationship with the customer is established through the employees who receive and serve them in the cafeterias . There, the customer will receive information about each product, and will enjoy personalized treatment at all times .

On the other hand, the company relates to the customer through:

Social networks: through this medium, customers can express their opinions about stores, products or customer service. The brand takes advantage of this platform to inform about new openings, seasonal products or promotions.
My Starbucks Idea : within the corporate website, there is an exclusive section for customers to contribute their ideas, vote on different suggestions and participate in the brand's proposals
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Starbucks main sources of income

Direct Sales

The main income that Starbucks receives comes from the sale of coffee and different products that include food and drink, in its establishments. This includes from products that are prepared at the moment, to those that are sold already packaged.

Franchise Fee

On the other hand, Starbucks receives another small percentage of income that comes from the fees or initial payments that franchisees make when they obtain the rights to use the Starbucks brand in their establishment .

Starbucks key assets

Brand : it is your cover letter and the image of the company. Nowadays, it is only necessary to see the name and the logo to know that it is an exclusive cafeteria where having a coffee or any of its products is a different experience.

Coffee producing centers : it is one of the bases of the brand, the places in which the best coffee is selected and processed to offer an outstanding product that is different from that of the competition.
Logistics centers : the spaces in which the company's coffee and products are stored and exported so that they reach all the distribution centers
Stores : the spaces through which the brand conducts its relationship with the customer and offers its products
Product developers : Starbucks has a team of professionals prepared to develop new products that meet the needs and proposals of its customers.
Human resources : an indisputable pillar of the success of the company's brand image lies in the people who work offering the best service to its customers.

Starbucks Partners

Coffee farmers and producers : the company has around 70 coffee producers around the world who are responsible for selecting the best beans to ensure maximum excellence
Exporting companies : they will be the ones that distribute the production so that it reaches the brand centers that are located in different countries of the world
Franchisees : the partners who are responsible for expanding the network of Starbucks coffee shops around the world in places of great affluence or in relevant commercial spaces
Suppliers : includes all those companies that participate in the manufacture of material such as cups, coffee machines, labelling etc.

Starbucks unknown facts

The first name that was considered for the company was Pequod Coffee, the name of a ship that appears in the Moby Dick book.
Starbucks has secret recipes that you can only try in its establishments, such as the crunchy cinnamon Frappuccino or the birthday cake.
It has around 87,000 different drinks.
Starbucks buys approximately 4% of the coffee sold worldwide.
Around 4 billion paper cups are used in total each year.
The largest cup size you can find at Starbucks is called the Trenta and it has a capacity of 916 ml. It has more capacity than a human stomach (900 ml)!