How Starbucks Came To Dominate The Franchise Coffee Market

Starbucks coffee is a household name. The multi-billion-dollar cafe chain has over 30 locations in 70 countries. It is an absolute giant.


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Starbucks coffee is a household name. The multi-billion-dollar cafe chain has over 30 locations in 70 countries. It is an absolute giant. How on earth did the green mermaid from Seattle come to grace so many millions of coffee cups?

Since its humble beginnings in 1971, the chain has exploded. It was the eventual victor in the famous ‘coffee wars’ of the 1990s and has been an aggressive and competitive company throughout its history.

Here are some of the key reasons why Starbucks is such a dominant force:

Technology

Starbucks has taken over the cafe market by constantly adapting. Often, this takes the form of early adoption of the newest technological advances. It revolutionized coffee distribution chains to maximize their profit.

Today, Starbucks is at the forefront of the retail data revolution. It isn’t pretty, but it is an example of how the company is willing to think outside of the box when securing advantages.

Starbucks harvests lots of data from the 100,000,000 transactions that take place in its cafes each week. Big data on customer preferences, habits, and demographics are then used to plan a business strategy. In fact, some commentators have pointed out that without its use of big data, Starbucks would not be in the dominant position it is now. The chain cafe market has many competitors, so scrambles to utilize the latest business technology are essential if a company wants to stay ahead.

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Standards

Starbucks came under fire in the 1990s for the quality of its coffee. The beans served and sold by the chain were dark roasted, a process that creates wonderful looking coffee beans but that produces a strong and bitter taste.

The company responded to damning criticism of its coffee quality by standardizing the training of its baristas in 2010. This vastly improved the quality of the drinks served and rejuvenated the image of Starbucks in the public eye. Whereas before they were known for inconsistent and over-roasted coffee, you can now get a great brew at any ‘bucks in the world.

Business Practice

The coffee industry is a surprisingly ruthless place. ‘Coffee wars’ between chain cafes first broke out in the 1990s. They still rage to this day.

Its aggression is tempered, however, by a newfound sense of ethics. After the 2008 financial crisis, Starbucks was in deep trouble. Whereas many companies in this situation opted to freeze pay and make redundancies, Starbucks went a different route. They began investing in sustainability programs and retraining their staff.

As a result, the brand image of Starbucks changed. They developed a more ethical business model that, in turn, strengthened their market position. The company has seen its profits soar since its post-2008 slump, and the consensus is that the ethical rebranding of the company has had a lot to do with this success.


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