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01.28.11 -
Small businesses may not have the resources to duplicate Starbucks' winning strategy of opening a store at every corner, but there are some factors that small businesses can do to emulate the success of Starbucks.

By Lyve Alexis Pleshette/Tracy Diina

Starbucks is everywhere. It seems that every other person that you meet in the street has a Starbucks coffee cup in his or her hands.

As much as I love—and support—local coffeehouses (Buffalo has many fabulous examples), I have a very personal love of Starbucks. They won me over with their support of literacy, a cause I have championed since my teen years. They also won me over with French Roast and Italian Roast coffees, strong and delicious. I bought and read Howard Schulz’ book, and he became a personal hero of mine! I even wrote him a fan letter

A new book entitled “Starbucked: A Double Tall Tale of Caffeine, Commerce and Culture" by Taylor Clark looks at what made Starbucks an international success. The world's largest coffee-shop chain, Starbucks Corporation had $7.8 billion in sales in 2006, 40 million customers, and more than 13,000 stores around the world.

According to Clark, Starbucks "took a commodity that Americans could get for a quarter … reshaped it into a luxury product, convinced customers to buy it at hugely inflated prices, and built stores only a few blocks apart in every major city."

Well, small businesses may not have the resources to duplicate Starbucks' winning strategy of opening a store at every corner, but there are some factors that small businesses can do to emulate the success of Starbucks. Here are the key elements essential to the appeal and success of Starbucks.

Offer consumers what they love = Starbucks has shown that consumers love sugary drinks. People love sugar, and Starbucks offer them in heaps. Thus, you have flavors such as Java Chip Frappuccino served with chocolate chunks, whipped cream and a drizzle of chocolate on top; or Toffee Nut Latte with toffee nut syrup, whipped cream and crunchy toffee sprinkles; or Caramel Macchiato with gooey, yummy caramel sauce drizzled on top. Their drinks may not be healthy, but Starbucks has shown that consumers love their desserts, even in their coffee drinks.

Consistency = Consumers want to know that they are getting their favorite cup of coffee whether they are in Seattle, New York or Tokyo. Starbucks' coffee may not be the best coffee out there, but customers want to be assured that they are getting the same taste, same quality, same experience when buying coffee. Reliability is key to Starbucks. As the author writes, "To the coffee drinker in unfamiliar territory, Starbucks looks like an oasis in the horizon…"

Focus on capturing consumer's attention = While demand for Starbucks was initially attributed to the yearning for a "pure European coffee experience", the company's ability to offer "beverage entertainment" has allowed them to capture customer's hearts and pockets. Starbucks offer coffee combinations with flavors and products you never expected before each season, all in an effort to provide that "sophisticated coffee indulgence." Hence, you have flavors such as Banana Coconut Frappuccino, Pumpkin Spice Latte, Eggnogg Latte, Rasperry Mocha Chip Frappuccino, and many others. It is beverage entertainment, at its best that keeps people interested and coming back for more.

Understand the economics of your business = Starbucks does not just want to sell coffee - it's too cheap. Instead, they offer more of the milkier and sweeter varieties that have healthier margins.

Ability to think outside the box = Nowadays, Starbucks is not just about coffee. It has become a place where you can buy regular old CDs, or burn your own personalized CD with song selections of your choice. The company even has a record label, with Hear Music's inaugural CD release from none other than music legend Paul McCartney. They even provide free Internet access in their stores - all in the hope of making you stay at the store more so they can sell more coffee.

And of course, the best lesson of Starbucks is to first have a product in demand. They are at the forefront of a trend that changed the way coffee is viewed and purchased. Starbucks stumbled on a great business plan by offering a pricey product that a wide number of consumers will want again - and again (everyday if possible). As the author pointed out, coffee is the second most traded commodity in the world, and four out of five Americans drink the beverage regularly. With such a huge demand for the coffee beverage, you can be assured of a wide customer base.

And let's face it, coffee is physically addictive, so it is no surprise to find people lining up at Starbucks every day (even several times a day) to get their caffeine fix. Starbucks succeeded in selling a lifestyle dream of affluence and comfort wrapped around a steaming cup of coffee accessible from every block in your neighborhood.

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