Starbucks is one of the most successful companies of our times, going from a single specialty coffee-roasting store in 1971 to a global coffee chain with 32,900 stores in over 80 countries today.
Many people have tried to understand the reasons for their success. These reasons include introducing quality coffee to American coffee drinkers, and the Starbucks ambiance which combines a welcoming neighborhood feeling with sophistication and upscale decor.
Then there are the convenient locations of the stores, the constant innovations in the menu that keep customers engaged, and the leadership of former CEO Howard Schultz who made Starbucks a global as well as environmentally and socially responsible company.
Of course, it’s a mixture of all of these reasons that accounts for the Starbucks success story. Let’s take a look at these factors in detail.
11 Reasons Why Starbucks Is Successful
1. Customer Experience
The Starbucks brand is built around the customer experience, which includes quality food and drinks that appeal to a sophisticated taste, upscale yet friendly decor, and a welcoming atmosphere with friendly baristas who will craft almost any drink that you can think of.
Starbucks stores are the kind of place where you can meet up with friends, hold an informal brainstorming session for work, or use the free wifi and comfy couches to get some work done on an overdue paper or report.
The Starbucks experience is intangible but it almost guarantees the kind of unshakable customer loyalty that Starbucks has built up over the years. People are willing to pay high prices to be part of this experience, and this is proof of the marketing magic of Starbucks.
There’s no denying that the location of Starbucks stores, strategically placed in busy neighborhoods and business and shopping districts, is a major factor in their success.
The large number of Starbucks stores means that there’s likely to be a store near your home or workplace, where you can stop for a cup of coffee and a bite to eat at any time of day. And that means convenience, which is such a major factor that it must be listed on its own.
Starbucks has been all about convenience and for millions of customers it has become part of their morning routine to grab a cup of quality, well-made coffee on the way to work.
Of course, it would be cheaper to make the coffee yourself at home, but Starbucks customers have shown over the years that they are willing to pay for convenience and quality.
4. Quality Food And Drinks
From the beginning, under the leadership of former CEO Howard Schultz, Starbucks set out to create an Italian coffee house experience, with quality coffees and other drinks.
The next step was to add healthy, tasty snacks, sandwiches, and hot breakfasts to accompany the drinks.
New drinks and food items are added all the time. The Frappuccino is another success story: the drink was an accidental creation, but it has become the most popular item on the Starbucks menu.
The menu has changed over the years to accommodate changing dietary preferences and added teas, caffeine-free drinks, and vegan and gluten-free options.
Starbucks has been constantly innovating in every field, from introducing new menu items to developing ethical sourcing policies to using its mobile app to keep customers engaged. Innovation is part of the company’s culture and helps to keep it in a leadership position.
Innovation also means occasionally having to learn from mistakes, as when Starbucks stores failed to compete with local coffee shops in Australia.
The company was forced to close the majority of its stores there and reopen in locations where they could appeal to a different demographic.
6. Strategic Expansion
Starbucks has followed a policy of strategic expansion, opening stores globally in Asia, Europe, Africa, and Latin America. However, the expansion was never too rapid, letting Starbucks maintain a uniform appearance and menu in all its stores.
While opening new stores, Starbucks has maintained its brand identity and quality, so its distinctiveness does not get lost in the expansion.
7. Something For Everyone
While Starbucks has this uber-cool image, it’s also a kid-friendly store with kids’ menu items and caffeine-free healthy drinks.
The wide range of drinks and food items on the menu means that there is something for everyone, from espresso shots to herbal teas.
Starbucks marketers are masters of their art and know how to keep customers engaged and coming back for more. The Starbucks Rewards program was one of the earliest loyalty rewards programs and became a model for other companies.
Seasonal promotions and occasional freebies through the Rewards program also help to maintain customer loyalty. Seasonal foods and drinks are announced every year and customers wait eagerly for the new offerings each season.
It would not be an overstatement to say that former CEO Howard Schultz made Starbucks the global leader it is today. Schultz, who was in charge of the company for thirty years, helped to create the brand and the products, as well as the values and culture.
Schultz saw the global potential for Starbucks early on, and he also established the principles of environmental and social responsibility.
10. Environmental And Social Responsibility
Under the leadership of Howard Schultz, Starbucks began to position itself as an environmentally and socially responsible company.
This meant putting in place policies for ethical sourcing of products like coffee beans, tea, and coca, and also supporting the farmers and local communities that produced these.
This Is another instance when Starbucks has gone against conventional wisdom and chosen the ethical alternative versus lower costs. These choices however have proved to be popular with customers.
Within the US too, Starbucks has tried to maintain ethical sourcing practices and uses products from minority-owned businesses whenever possible.
11. Investing In Its Workers
Starbucks has a reputation as a good employer, and this reputation has its basis in the facts. Starbucks employees are called “partners”, and they do in fact receive stock options in the company as part of their benefits.
Starbucks invests in its employees through good wages and benefits, including healthcare, college tuition, and paid leave. Employees receive training when they join and throughout their careers.
Starbucks offers employees the potential to grow and succeed within the company. As a result, Starbucks employees come to share the company’s culture and values, which contributes to its success.
As you can see from all of this, there are many reasons why Starbucks is so successful. It’s a success story that everyone can learn from and hopefully apply the lessons to their own work.