Premium Coffee Competition Causes Starbucks to Downgrade

By , in News Sci/Tech on . Tagged width: ,

Recent facts show that good coffee is one of the most important actors on the business market. It can cause competitors to gain, lose a lot of money or it can downgrade them, as Starbucks Corp. showed recently.

On Friday, the company was registered as downgraded on the market with the purpose of performing at Cowen. When it happened, analysts were concerned about the increasing competition on the craft coffee market. This could seriously affect Starbuck’s growth.

Considering the latest trends, Cowen presented Starbuck’s S SBUX with 0.325, from $68 to $65. The company explained the phenomenon by stating that, at this point, they are trying to reach new and existent or lapsed customers.

With the gift cards from holiday season, Starbucks had big success and made sure that regular customers remain loyal, even if it might have lost some profit. Now, the craft coffee market is becoming tighter every day and Starbucks will have to reconsider their strategy if they want to regain lapsed customers.

What is their present strategy for making people come back

The company is planning to use modern technology for increasing their number of the consumer. For that matter, they have developed a partnership with JPMorgan Chase, a debit card that will be released soon and a new mobile app that allows visitors to checkout fast and easy.

The marketing team considers that some of Starbuck’s most recent beverages don’t have all the visibility they should. Also, they seem to have made some uninspired moves like giving up successful events (for example, Frappuccino Happy Hour) in favor of platform innovations.

With all the changes and market fluctuations, Starbucks still rules the coffee aisle. At the end of March this year their market share had arisen from 12.5% to 13.2% and this means that the odds are in their favor.

Patrick Supernaw

Patrick Supernaw is the lead editor for Great Lakes Ledger. Patrick has written for many publications including The Huffington Post and Vanity Fair. Patrick is based in Ottawa and covers issues affecting his city. In addition to his severe hockey addiction, Pat also enjoys kayaking and can often be found paddling the Rideau Canal. Contact Pat here