China/Merger

Starbucks does have operations in China, according to a news article on the company's website. Starbucks Coffee International first entered the Greater China market in 1998, opening its' first store in Taipei, Taiwan. The first actual Starbucks store was located in the mainland of China in Beijing in January of 1999. The company takes pride in connecting with the communities of China.

http://news.starbucks.com/about+starbucks/starbucks+coffee+international/greater+china/

Starbucks has made at least one acquistion in its' corporate history. According to an article found on the Oraganic Consumers Association website, the company acquired Seattle Coffee Company. The rival company was purchased for approximately $72 million in cash back in 2003. The merger created both value and competitive advantage for Starbucks in the Seattle, WA market.

http://www.organicconsumers.org/starbucks/starbucks_fair_trade.cfm

Vertical Integration/Outsourcing

Based on information available on  the company's website, Starbucks does not exercise vertical integration; however, the company does outsource some of its' responsibilites. Outsourcing is defined in the text as "farming out certain value chain activities to outside vendors."  According to an article found online, Starbucks recently outsourced duties to Unisys, an IT services firm. "The outsourcing deal was part of the firm's plan to implement their "expansion goals" of opening an estimate of 3,600-20,000 outlets worldwide. Unisys would be responsible for the IT infrastructure services international Starbucks outlets, support centers and manufacturing facilities." Outsourcing is yet another method to help contribute to the continued success of Starbucks.
http://www.outsourcing-weblog.com/50226711/starbucks_entering_the_outsourcing_scene.php
http://www.starbucks.com/

Focused Differentiation Strategy

Starbucks offers a focused differentiation strategy. This strategy is described in the text as "concentrating on a narrow buyer segment and outcompeting rivals by offering niche members customized attributes that meet their tastes and requirements better than rivals' products." ( Thompson, Strictland, Gamble, pg. 140) Starbucks has implemented a reward program that gives back to frequent customers. The "My Starbucks Rewards" program allows customers to make purchases at their local Starbucks and receive points for every purchase made with the rewards card. Those points are then used toward discounts, free merchandise, etc. Also, Starbucks is continuously offering new products on their menu. The coffee-drinking company introduces new beverages in accordance with the seasons and holidays, and have even extended their menu beyond beverages offering breakfast and lunch items. The company's loyal customers have coined the phrase "a cup of Starbucks." With the great success of Starbucks, it's easy to see the focused differentiation strategy works well for the company.

https://www.starbucks.com/card/rewards/program-information
http://www.starbucks.com/

Stock Price- $27.37 ( @ 8:42AM Oct. 18)

Strengths/Weaknesses

Some of the main strengths that I have discovered since blogging about Starbucks include their product differentiation, customer loyalty, and brand power. The company continues to develop new products to set their company apart from competitors. After researching Starbucks it appears that they have some of the most loyal customers of any company in their industry. These coffee drinkers love their Starbucks and find that competitors fall short with their renditions. Finally, the amount of brand power that Starbucks carries is amazing! It has become such a common brand that some refer to coffee as a cup of "Starbucks".

Weaknesses for the company include too many expansions, and pricey products. Starbucks over extended themselves a few years ago by opening too many stores too fast. This resulted in the close of several stores both in America and internationally. Also, Starbucks competition has recently increased, with restaurants like McDonald's offering flavored coffees at a lower price. This same price competition could prove to be a weakness for the company in the future.

SBUX- $25.94 ( as of close of business Oct.1, 2010)

http://www.starbucks.com/