Starbucks Corporation is an American multinational chain of coffeehouses and roasteries headquartered in Seattle, Washington. It is the largest chain of coffeehouses in the world.
Let us look into the Overview of Starbucks and then we can move on to the BCG Matrix of Starbucks.
Overview of Starbucks
As of November 2021, the company had 33,833 stores in 80 countries, including 15,444 in the United States. Of the Starbucks stores in the U.S., more than 8,900 are operated by the company itself, while the rest are licensed.
The rise of the second wave of coffee culture is generally attributed to Starbucks, which introduced a greater variety of coffee experiences. Starbucks offers hot and cold beverages, whole bean coffee, micro-ground instant coffee, espresso, caffè latte, teas with and without leaves, juices, frappuccino drinks, pastries and snacks. Some offerings are seasonal or specific to the store location. Depending on the country, most stores offer free Wi-Fi Internet access.
What is BCG Matrix?
BCG Growth-Share Matrix classifies different business units or products into 4 different categories Dogs, Stars, Cash Cows and Question Mark.
These classifications are based on the growth rate of the industry and the market share of each business unit relative to the largest existing competitor. For this reason, the BCG matrix is also referred to as the Growth-Share Matrix.
- Dogs: These are products with low growth or market share.
- Cash Cows: These are products with low growth and high market share.
- Question Marks: Products with high growth and low market share.
- Stars: Products in markets with high growth and high market share.
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BCG Matrix of Starbucks
The BCG matrix of Starbucks contains the Dogs, Stars, Cash Cows and the Question Mark. In this reading of Starbucks BCG Matrix, we will analyse the company’s low growth products, products that attract sales, high growth products, and products that attract sales or may become low growth products in the future.
Starbucks offers mugs, cups, t-shirts, etc. to its customers. Most of them are limited edition and seasonal and often sell out within a few days. Due to the exclusive and high-quality positioning of the brand, customers are proud to own Starbucks items.
There is a crazy demand for exclusive designs that are especially hard to come by, and some e-commerce sites exist exclusively for reselling and shipping these rare items to eager overseas buyers.
Starbucks still has a long way to go in creating a strong footprint in the apparel and general merchandise industries. For this reason, the best place for Starbucks merchandise is in the question mark quadrant.
Accounting for more than 25% of the company’s total revenue, Starbucks’ grocery business is certainly the STAR for the company. With plans to double its food business by 2021, the company is going full throttle and experimenting with its food offerings and options. The hot breakfast sandwiches are a good complement to the brand’s coffee offerings.
To meet high customer demand for protein and healthy snacks, the company launched Sous Vide Egg Bites, which have grown more than 60% since their launch in January 2017.
The company has succeeded in creating its own niche in the food industry, targeting a specific customer group.
Undoubtedly, the CASH COW for Starbucks is the coffee business. The coffee business, which has been the breadwinner since the company’s inception, has grown by leaps and bounds over the years and has helped the company achieve strong financial figures.
Although Starbucks competes with rivals such as Barista, Cafe Coffee Day, Costa Coffee, etc., the company has managed to create its own group of loyal customers.
It is the overall coffee experience that sets the company apart from the rest. Since its inception in 1971, Starbucks has been instrumental in changing the way we consume and interact with coffee.
The packaged goods business is Starbucks’ newest vertical. The company has signed an agreement with Nestle to market Starbucks products for consumption and food service outside the company’s coffee shops worldwide.
Starbucks Consumer Packaged Goods operates in a low-growth market and currently holds a small market share. The uncertainty surrounding this business going forward is why it is considered a question mark for the company.