M Rahman5C analysis of Starbucks (5C’s of Starbucks)
This is a detailed 5C analysis of Starbucks which evaluates how Starbucks’ strategies and operations are affected by factors such as company, competitor, customer, collaborator, and climate. Starbucks is a multi-national company, headquartered in Seattle, the USA. It has changed the world of coffee and almost become synonymous with coffee.
Starbucks Company
Starbucks is the largest coffee house chain in the world. It has over 32,000 stores and operates in 80 countries. It is very famous for its premier roaster and speciality coffee. Its journey started in 1971 (Starbucks, 2021).
Starbucks’ net revenue in 2020 was 19.16 billion U.S. dollars; however, this represents a 27.7% decline compared to 2019 (Lock, 2021). The global lockdowns are mostly blamed for this decline. The company made success stories in many countries; however, it could not do that well in Australia and Vietnam. The article SWOT analysis of Starbucks provides more information on the company.
Collaborators of Starbucks
The success of Starbucks hinges on the success of the farmers and suppliers who grow products and do other supply chain activities for it. It works with thousands of coffee farms around the world, notably, in countries such as Brazil, Columbia, Guatemala, Kenya, Mexico, Saudi Arabia, and Tanzania. Its supply chain went through a transformation in 2008 to improve the processes and their efficiency.
However, working with thousand of farmers and suppliers has its own challenges. For instance, Starbucks filed lawsuits against some of its suppliers in the past over a number of issues. Likewise, its supply chain difficulty was also revealed when it had faced shortages of key ingredients for some popular drinks, and a lack of iced and cold-brew coffee, breakfast foods, cups, lids and straws across the United States (Cresswell, 2021).
Customers of Starbucks
Millions of people visit Starbucks stores globally each week. An average customer visits the restaurant six times per month. The company has been using its highly skilled and experienced leadership team, products, technology, and CSR to win the hearts and minds of its customers. However, it experienced ups and downs in the customer satisfaction surveys in the last several years.
Competitors of Starbucks
Discussion on competitors is a key element in the 5C analysis of Starbucks (5C’s of Starbucks). Starbucks faces a number of giant competitors in different countries. Similarly, small and independently run coffeehouses also put pressures on it.
The most notable competitors Starbucks faces in the USA are McDonald’s with it McCafé brand, Pret a Manger, Peet’s Coffee, Caribou Coffee, and Dunkin’ Donuts. In the UK, it is challenged by Pret A Manger, and Caffe Nero. The article Competitors of Starbucks (Competitor analysis of Starbucks) provides more information on this topic.
Climate of Starbucks
Climate is often referred to as context. Starbucks is a very successful company. It has excellent capabilities to address the external factors that impact on its operations. It has benefitted from a coffee culture in the USA, and many other countries. Similarly, failing to understand distinctive coffee cultures has led to its failure in some countries.
Growth of developing economies has created opportunities for Starbucks to earn more revenues. Similarly, the company has made excellent use of technology as well. PESTEL analysis of Starbucks provides more information on this topic.
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Last update: 10 July 2021
References:
Cresswell, J. (2021) Starbucks, flush with customers, is running low on ingredients, available at: https://www.nytimes.com/2021/06/10/business/starbucks-shortages.html (accessed 09 July 2021)
Lock, S. (2021) Net revenue of Starbucks worldwide from 2003 to 2020, available at: https://www.statista.com/statistics/266466/net-revenue-of-the-starbucks-corporation-worldwide/ (accessed 09 July 2021)
Starbucks (2021) About us, available at: https://www.starbucks.co.uk/about-us (accessed 05 July 2021)
Author: M Rahman
M Rahman writes extensively online and offline with an emphasis on business management, marketing, and tourism. He is a lecturer in Management and Marketing. He holds an MSc in Tourism & Hospitality from the University of Sunderland. Also, graduated from Leeds Metropolitan University with a BA in Business & Management Studies and completed a DTLLS (Diploma in Teaching in the Life-Long Learning Sector) from London South Bank University.
