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Starbucks in the United States
Monday 21 September 2015
The expansion of Starbucks in the US is impressive. The "ambience" or better said the "atmosphere " - deliberately cultivated by the company - is the real icing on the cake.
On my recent trip through California, the dominance of Starbucks on the streets of San Francisco and Los Angeles was striking.
Those who want to achieve something in the service and catering industry, should take note of how Starbucks operates.
The success of Starbucks is not so much based on the quality of the types of coffee, drinks and snacks offered. The additional and well thought out criteria consistently implemented
by the Executive Committee have been a decisive factor.
- Starbucks rents almost exclusively corner locations on streets. Why are they doing this ? On the one hand, to secure a higher visible presence on those streets. On the other hand, many customers come alone and want to observe the local scene on the street or even better, be seen. This is enjoyable for the client and a remedy for the city dweller to being bored and lonely.
- Starbucks pays the workers (mostly part-time employees holding several jobs) better wages. The effect: A kind of "Happy" group atmosphere of cool and clever employees. I met Joe in Los Angeles , 36 years, at the checkout counter. In the morning he works at Starbucks, in the evening he works in a bar. This suits him perfectly.
- Starbucks has managed to start the day in a dynamic way. More and more city dwellers move to an invigorating Starbucks coffee shop to sip their coffee and eat their cereal instead of doing so alone and depressed at home. A bit like a shot of vitamins for the day. This has for many customers become a part of their lifestyle. This has for many customers become a part of their lifestyle.
- Recent surveys in the US have shown that Starbucks is the preferred place to meet a new date. The easygoing and relaxed atmosphere of Starbucks premises are great for a first meeting with a date in America. Here again the concept of a bright corner store, with many windows, subconsciously plays a role - no dark dive of a liquor bar, instead everything is open and bright .There is nothing conspiratorial or scary in here.
The example from Starbucks makes it clear how much it depends today on the correct observation of the psychological mood and needs of its customers.
Meanwhile this multidimensional component in customer orientation also plays a crucial role in the success of many other sectors.
As a conservative value investor, Starbucks for me, with its well-advanced expansion and area coverage is today too costly. My scoring is based on the growth model. A pity really as I am keen to buy this stock. The company has its place on my watch list. Let's see how things develop in the next few years at Starbucks, and what conclusions the stock exchange draws from all this.