The current performance assessment summarizes the current situation analysis of the
previous chapter and determines whether Starbucks has a problem, and if so, what is the
nature of the real problem? This can be done by posing four meaningful questions that will
lead to accurate and perspective answers.
Is the global coffee industry attractive for Starbucks?
The attractiveness of the global coffee industry can be seen as relatively high. Positive
market growth in emerging markets requires Starbucks to shift the strategic focus away from
saturated markets in developed economies (mostly the U.S. and Europe) to ascending
economies such as China, India, and Brazil. The market presence (number of stores) must be
increased incessantly in order to protect market share not only against international
competitors which swarm emerging markets at a rapid pace, but also against local coffee
companies which have the home field- and price advantage. In developed countries, niche
segments, such as the flavored coffee and courtesy coffee segments, deserve more
attention, as well as “hot” coffee trends, such as single-serve coffee. Market attractiveness is
moderated by high bargaining power of buyers and sellers.
What are key success factors in the global coffee market and does Starbucks have
them?
Key success factors are a combination of important facts that are required in order to
accomplish one or more desirable business goals.69 For Starbucks, key success factors are
based on its numerous capabilities which distinguish the company from competitors. Three
particular capabilities can be highlighted to have the biggest impact on Starbucks’ market
success.