Tip number 1
Starbucks' expansion strategy in emerging markets should be followed carefully.
Starbucks' expansion strategy in emerging markets should be followed carefully.
As well as measures taken to diversify the group's activities which are important for a good analysis of this stock.
All the strategic alliances and partnerships set up by the Starbucks group should of course be monitored for their impact on strengthening the company's presence and market share in the world. This particularly involves alliances with retailers or anything regarding everyday consumer goods.
Starbucks direct and indirect competition should also be watched. Particularly large restaurant chains which generally offer similar products and at lower cost.
The communication campaigns implemented by Starbucks in order to counter certain changes in consumer habits who currently favour local businesses are also to be taken into account, as are the current major socio-cultural trends.
American group Starbucks owns and operates coffeehouse chains. Most of the turnover comes from the coffeehouse chain operations while the rest comes from the sale of licenses around the world. But Starbucks is also developing the sale of coffee, drinks and food products for businesses.
Starbucks generates most of its sales in the United States.
The Starbucks group is categorized into two distinct business sectors: coffee roasting and production as well as the fast food coffee sector. With this in mind, it's important to include the competition emanating from these two sectors of activity during your analyses of its share price. Here's some information on the subject.
Starbucks ranks 5th worldwide and in turnover in the coffee roasting sector. It's behind the giant Nestlé, as well as Mondélez, Douwe Egberts and JM Smucker. It's followed by Strauss, Tchibo, UCC Coffee, Lavazza and Keurig Green Montain.
Its main competitors in the fast food sector are currently the McDonald's and Subway groups which occupy the first two places in the world ranking.
We recommend that you stay up to date about any news in this sector of activity by finding important data on information websites or on your broker's website to trade the Starbucks share.
Let's check out Starbucks' main partners in detail.
The Starbucks stock price is currently listed on the Nasdaq Global Select Market and is included in the calculation of the Nasdaq 100 stock market index.
The technical analysis of the stock's evolution over the last ten years is interesting. First of all there seem to be long and stable trends. The first bearish trend ends in November 2008 at its lowest of $ 3.92. But since then, the Starbucks stock continues to evolve upward crossing the $ 60 threshold in October 2015.
Firstly, one of Starbucks' most important assets is undoubtedly its brand image. The brand has succeeded in making itself popular all over the world and is now one of the best known brands internationally, which is of course an advantage in making it easier for the brand to establish itself wherever it wants to.
In addition, the Starbucks Group's customer base continues to grow year after year. The customers recruited in this way are then quickly retained and the group benefits from greater stability in its business over time.
Since Starbucks is, as you will have understood, primarily based on an international expansion strategy, it can of course count on a very extensive supply chain around the world. This, of course, helps to effectively support its operations. The company's suppliers are thus carefully selected and well distributed geographically, allowing for fast and regular supply and control of transport costs.
Starbucks' strategy of diversifying its activities with the acquisition or development of subsidiaries such as Ethos Water or Best Coffee is another undeniable asset of the group. This diversification in the company's activities enables it to reduce the market and industry risks of its core business.
Firstly, Starbucks' high price policy can be cited as an important weakness. These high prices increase the company's margins but at the same time reduce the affordability of their products. As a result, the company's market shares are limited, and Starbucks actually reaches only a very small portion of the customer base in this industry.
The fact that Starbucks uses standardized and generalized protocols for the manufacture of its products may prove to be a definite handicap for its future development. Starbucks may have difficulty establishing a presence in certain countries and geographic areas because of an inability to align itself with the cultural references of those markets.
While Starbucks has made its name through original products, these are not protected by patents and can therefore be very easily imitated. The group's local competitors therefore take advantage of this to offer equivalent products at a lower cost, which represents a significant loss of market share for the American company. Some of Starbucks' competitors even go so far as to copy the atmosphere of the chain's cafés to attract more consumers. Some directly competing chains are beginning to expand around the world.
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