Business Model Canvas Of Starbucks – Called by many “the McDonald’s of coffee”, Starbucks is probably the most famous coffee chain in the world, with more than 21,500 stores in 64 countries. And, as Starbucks itself states, the company isn’t just “passionate” about coffee, but about everything that goes with it:
We also offer a selection of premium teas, fine pastries and other delicacies to delight the taste buds. And the music you hear in-store is chosen for its artistry and appeal. It’s not uncommon to see people come to Starbucks to chat, meet, or even work. We’re a neighborhood gathering place, part of the daily grind – and we couldn’t be happier about it.
Business Model Canvas Of Starbucks
The Starbucks story begins with three students at the University of San Francisco in the early 1970s: English professor Jerry Baldwin, history professor Zev Siegl and writer Gordon Bowker. All three had met Alfred Peet, a coffee roasting entrepreneur, who taught them his style of roasting beans.
Introducing The Product Strategy Canvas
After that, they decided to sell high quality coffee beans and hardware. Prior to the founding, Bowker owned an ad agency with Terry Heckler, who said words beginning with “st” were powerful. So, the Founders searched a list of words starting with “st” and discovered a mining town called “Starbo”. From there, they recalled the name of the second in Moby-Dick’s book: “Starbuck”. And so the first Starbucks was born, on March 31, 1971, in Seattle, Washington.
Following the initial idea, this first store will only sell roasted whole coffee beans until 1976. Five years later, Howard Schultz (President and CEO of Starbucks from 1986 to 2000, then again from 2008 to 2017) between at a Starbucks store. He would join the company as director of retail operations and marketing the following year, when Starbucks began supplying coffee to fine restaurants and espresso bars. In 1983 Schultz traveled to Italy and was impressed by the espresso bars in Milan and saw the potential to develop a similar café culture in Seattle.
So in 1985, Schultz founded Il Giornale, a café that offered brewed coffee and espresso drinks made from Starbucks® coffee beans. Two years later, the original founders sold Starbucks to Schultz. He renamed his Il Giornale cafes to Starbucks and began to expand the business. In 1989, there were 55 Starbucks stores in the United States. Starbucks completed its initial public offering (IPO) on the stock exchange in mid-1992, with revenue of $73.5 million and a market value of $271 million.
Four years later, its first store outside of North America was opened in Tokyo. And, finally, nowadays, Starbucks is one of the 500 largest American corporations by revenue, according to Fortune, with a market value of more than $100bi and 32,660 stores worldwide.
Starbucks Mission Statement And Vision Statement In A Nutshell
In 2022, Howard Schultz, one of Starbucks’ top executives, is back as the company’s CEO, having previously held the position from 1986 to 2000 and then from 2008 to 2017, as previously mentioned.
Inspiring and nurturing the human spirit – one person, one cup and one neighborhood at a time.
Simply put, Starbucks makes money by selling coffee, tea, food, and other ready-to-drink beverages in its company-operated or licensed stores. Other revenue also comes from inbound royalties and licenses, consumer packaged goods, foodservice, and more, since Starbucks products can be found in grocery stores, convenience store chains, and other beverage outlets. . Although nearly half of the stores are franchised, Starbucks still derives the bulk of its money from its corporate-operated stores: the segment makes 81.5% of total revenue ($22.4 billion). , nearly ten times the turnover of its licensed stores. However, it is fair to point out that Licensed Stores posted the strongest revenue growth.
There is no customer segmentation in the Starbucks business model. Anyone who wants high-quality coffee is part of Starbucks’ customer segment. In other words, the mass market.
Top 20 Starbucks Competitors & Alternatives
Employees make and serve products to customers, and also support them anyway. This guarantees a loyal customer base for the brand.
Beverages (especially coffee) and food sales in company-operated or licensed stores, royalties and licenses, packaged goods, etc.
Starbucks is a gigantic coffee company and has a huge market share. Although the threats and weaknesses mentioned have their explanations and the named vulnerabilities need to be addressed, this is still a company that completely dominates its market and has somewhat disappeared from its opponents over the past decade. .
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The Triple Layered Business Model Canvas
It’s important to stay in touch with the bigger picture and not get overwhelmed by the daily grind.
Take a long time to write and are rarely referenced after they’ve been written – let’s be honest, they’re mostly written to get business loans.
It is neither easy nor quick to review pages and pages of text. This canvas, on the other hand, is
Whenever you feel like you don’t know what you need to do for your business, looking at your canvas will keep you focused and help you figure out your next steps.
What Is Starbucks Business Model
Once you’ve filled out your canvas, you can always revisit it, redo it, and come up with great new ideas to pivot your business.
Having a printed reference can help you think about next steps to take, activities to focus on, platforms you can use to reach your customers, and many other important details.
Now that you understand why using this tool benefits your business, let’s talk about the nine elements of the business model canvas.
I’ll walk you through what each canvas element is, then give an example from a hypothetical Shopify store selling Turkish coffee.
How To Write A Value Proposition In 5 Simple Steps (2023)
What benefits does your product bring to your customers? What makes you desirable, the real value you offer to your customers? Why are they buying from you?
Notice how I added a little twist to my value propositions: every time someone buys me a bag of coffee, I send them a small sample of another coffee blend.
Here you define the customer segments you are targeting. You don’t have to list every possible segment, but be sure to cover where you expect to get 85-90% of your business.
Example: I want my main customers to be people who really love coffee. My value proposition is good coffee delivered to your door – defining my customers based on this proposition allows me to be more effective when selling to my customers.
What Is A Business Model — Nexea
People who care about the quality of their coffee are likely to spend more to get what I offer with my value proposition.
What tone suits you best to deliver your value proposition to your customer segments? Are your relationships one-time or long-term transactions?
Anything you do to maintain your relationship with your customers goes here. If you want to automate your email marketing to continue fostering your relationship with your customers, that goes here. If you offer 24/7 customer service to increase customer satisfaction, that also applies here.
You may not want close relationships with your customers; you might want them to buy what they need and get to their next online activity. The relationship here could foster independence, and in later sections of the canvas you will list help pages and FAQs as ways to achieve this.
Starbucks Chain Business Model In A Nutshell
Example: I want to maintain a coffeeshop-like conversational tone and have a casual vibe throughout the business. I want to write personal copy in the content I produce to nurture that personal sense of closeness. I want to establish a friendly brand, rather than a professional company like Starbucks. I believe that’s what my audience wants – a more personal experience.
To download a printable version of the business model canvas template I use in this article, click the button below.
Now you know who your customers are. You know the value you bring to them. And you know what kind of relationship you want to build with them.
This is where you define your channels for finding your customers, your sales and distribution channels, and getting in touch with your customers.
Refine Your Idea Using Business Model Canvas (explained With Example)
Where do your customers hang out? What are the ways you can reach them to provide them with your value proposition?
Example: I want to contact blogs and influencers interested in coffee and specialty foods, and use them to promote my premium coffee content. As I sell premium Turkish coffee, their audience is more likely to buy my coffee.
I also want to write content about coffee. Again, enthusiasts are likely to read coffee content and then I can offer them a sample of my coffee to get them hooked.
To distribute my content more widely, I may use email harvesting software, such as , to get email signups. I can promise a free sample in exchange for emails from website visitors.
Customer Segments, Revenue Streams, And Customer Relationships: The Business Model Canvas
Instagram is also a great place to share content with coffee
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