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Is Starbucks Looking To Change Its Strategic Direction?

With an evening menu, are they diversifying?

21Aug

You can now drive from Boston to Philadelphia safe in the knowledge that you’re never more than 10 miles away from a Starbucks. In Manhattan, the coffee-brand is literally inescapable. There are now more than six branches per square mile in the Borough, which according to Quartz, equates to one store per 14,762 people.

Despite this dominance, Starbucks is expanding its menu in a strategic change which could see it become more of a restaurant chain. They’re looking to target a fairly specific demographic too; people who like going out for a drink but don’t like everything that comes with it, namely: noise, crowds and watered down beer.

Charles Passy, a reporter for Marketwatch and a self proclaimed ‘coffee snob’ who finds Starbucks’s coffee ‘unpalatable’, was seemingly won over by the ‘Starbucks Evenings’ concept when he visited one of the few stores which already has an evening menu. Whether the program - which is expected to reach 12,000 US stores in the next five years - represents an attempt at a rebrand remains to be seen however.

For a company so synonymous with a particular product to branch out is always a risk. But let’s be clear, it’s not as if Starbucks is going into the furniture industry, it’s going to start selling hot food and alcohol. The main problem this will likely throw up, will be the need for Starbucks to change people’s perceptions of what it actually does. Asking someone whether they’d like to go for a beer or a glass of wine at Starbucks seems odd, but that’s because it’s seen as a coffeeshop at the moment, not a restaurant, and certainly not a bar.

In Seattle - the city where Starbucks first made its name - ‘Starbucks Evenings’ have actually been on trial since 2010. If their current menu is anything to go by, Starbucks certainly doesn’t want to attract students by offering cheap beer and live football. Instead, a combination of fine wines and craft beers are on offer, combined with cheese boards and an assortment of tapas. As mentioned before, this clearly indicates that Starbucks wants to attract those who want to avoid crowded, raucous bars and instead prefer a more laid back environment in which to drink.

The pricing strategy seems to be to keep things cheap, something which the coffeehouse is not famous for. This will also require some serious marketing because most will assume that an evening at Starbucks will come at a high cost. Again, this will be a stern test for Starbucks to overcome, and will probably require the company to test the concept out in detail in the US before it make its way over to Europe.

Diversification should be encouraged, especially if there’s a clear link between the new idea and the company’s core processes. ‘Starbucks Evenings’ fits in with that and therefore has a reasonable chance of being successful. As mentioned before, much of it will be to do with changing perceptions so that Starbucks is seen as more than just a coffeehouse. Setting a target of implementing the evening menu into 12,000 new stores is optimistic, but if the company’s recent success is anything to go by, there’s a good chance they’ll make it successful. 

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