Ansoff’s matrix allows marketers to consider ways to grow the

business via existing and/or new products, in existing and/or

new markets. By analyzing whereabouts Starbucks are at the
current moment in time, we can suggest areas of
improvement/consolidation.

PRODUCT
S
Existin New
g

Market Penetration Product Development

 Espresso  Starbucks VIA

Existin Readybrew
 Cappuccino
g
 Starbucks card
 Mild, smooth and bold
coffee’s

MARKETS

Market Development Diversification

 Frappuccino  Mugs
blended coffee
 Tumblers
New  Frappuccino light
blended coffee  Coffee machines

 Traditional Coffee’s
with ice.

Conclusion
Starbucks have a good range of products targeting both existing/new
customers and existing/new markets. However their development of
completely new products could be an area of improvement. This is
because Starbucks VIA Readybrew (their main product development) is
only available in London coffee shops and therefore the amount of
revenue the product will generate is restricted. Furthermore, although
Starbucks has diversified, the products under this heading are still drinks
based. The company could spread its risk and increase its chance of
long-term success if it diversified into a completely new market.
 Shops in UK Time in Average
business number of
(UK) stores
opened in a
year
Starbucks 733 11 years 67

Costa Coffee 1000 38 years 26

Caffe Nero 360 12 years 30

1000

Number
of shops
opened

500

0
Conclusion
10 20 30 40

The graph shows that

Number Starbucks
of years is expanding
since establishment in UKat a far
faster rate than either of its main competitors, Costa
Coffee or Caffe Nero. This is because, as we can see
from the table, Starbucks has opened an average of 67
shops per year since its establishment in the UK, 37 per
year more than its closest rival.
 Shops in Shops in % of Shops in % of shops
UK London shops in Birmingh in
London am Birmingha
m
Starbu 733 262 36% 4 0.5%
cks
Caffe 360 100 27% 6 1.7%
Nero

50

% of shops in
London (Largest
city in the UK)

25%

Conclusion
There is a significant opportunity that Starbucks is failing to
exploit. It has opened a large number of shops in London
however it has only 4 shops out of 733 located in the5%
2.5% 2nd largest
city in the UK, Birmingham. This equates to 0.5% of its shops
compared % of shops
with 1.7% in for
Birmingham (2nd largest
Caffe Nero whichcity in
means Caffe Nero is in
the UK)
a stronger position to take advantage of the large population in
Birmingham. However Caffe Nero has by no means established
itself in Birmingham, therefore Starbucks has the opportunity of
increasing market share if it takes relevant action.
City Population

London 7.2 Million

Birmingham 992000

http://www.ukcities.co.uk/populatio
ns/