New Services: Stakeholder Analysis

Stakeholder Analysis: Starbucks Frappuccino

The Starbucks Corporation initially originated as an attempt to bring European-style cafe culture to the United States. However, in a drive to remain profitable and relevant as well as to honor its initial mission and vision, Starbucks has had to make some concessions to local tastes. One of these has been the development of the Frappuccino, a sweet, blended coffee beverage that is half-milkshake, half-iced coffee: it is both a unique product and also a unique service given that the blend is exclusively available at Starbucks' stores. Starbucks has continued to develop and reconfigure the Frappuccino to suit the evolving palates of its international consumer base. This has ensured that the company has enjoyed a strong bottom line, despite cheaper copycats from its rivals. The company recently released several innovative new flavors for the Frappuccino as well as new sizes to drive interest in its product. "The Frappuccino now accounts for 20% of Starbucks' annual sales, worth over $2 billion, and represents nearly two thirds of the entire frozen coffee drink market" (Nanos 2012).

Interestingly enough, the Frappuccino did not originate from sophisticated product development on the part of the Starbucks team but from an independent competitor. In this instance, stakeholders from outside the organization played a critical role in its development. A Boston cafe called the Coffee Connection developed a blended iced cappuccino drink into a froth using a frozen yogurt machine. The name of the beverage is a play on words, blending the term 'cappuccino' with the local, Boston name for a milkshake 'frappe.' The Coffee Connection was so successful "Starbucks bought the Coffee Connection chain for $23 million dollars in 1994, and by 1996 they made over $52 million in annual Frappuccino sales…They inked a deal with Pepsi to make the tiny ready-to-drink milk bottles of the brew shortly after" (Nanos 2013). Today, the Frappuccino is a presence everywhere, in both Starbucks stores and in supermarkets.

The development of the Frappuccino was in some ways seen as a radical departure from Starbucks' initial, more sophisticated aspirations as an organization. "The Frappuccino transformed it into a haven for moms and office workers" (Nanos 2013). The fact that Dunkin' Donuts and McDonald's so effortlessly entered the competitive fray, producing even more sweetened iced beverages for consumers highlights the fact that the Frappuccino is often embraced by consumers who have little taste for drinking 'real' coffee at all. In fact, in 2002, "Starbucks began introducing a new Frappuccino each spring, coordinating the flavor to match whatever colors were appearing on the runways" (Nanos 2013). Many of the most recently-developed beverages have no caffeine in them at all, and virtually all Frappuccinos sold come topped with piles of whipped cream, making them look more like a dessert than coffee. There is even the "Cotton Candy flavor, made with a mix of vanilla bean and raspberry syrup, milk, ice and whipped cream on top; a cinnamon roll variety with cinnamon dulce syrup," (Harris 2015) the latter of which recalled the popular mall chain Cinnabon.

From the early Starbucks loyalists that saw the chain as anti-corporate, the Frappuccino may be regarded as a loss of Starbucks' integrity, but from a profitability standpoint it continues to be highly successful. The Starbucks experience is no longer so much about coffee but about affordable luxuries and a place which is a home away from home to take one's laptop and relax in a cafe. With this localized focus, the Frappuccino has been modified to honor Starbucks' increasingly international focus as a company. For example, Japan's Starbucks introduced a green tea version of the Frappuccino. The Chocolate Brownie Matcha Green Tea Frappuccino is extremely popular in Japan not only because of the green tea flavoring but also because of the novelty of the crumbled brownies in the tea drink (Taylor 2015). Starbucks' products are always recognizably Starbucks internationally but have enough variation to suit local tastes, in this case the Japanese appetite for both tea and gimmicky purchases. One obstacle that the Frappuccino had to overcome in Asia was the fact that sweet flavors are less popular there. However, Starbucks responded with concoctions such as The Red Bean Green Tea Frappuccino for China. "Basically, the drink is a traditional Green Tea Frappuccino with whole red beans scooped on top" (Taylor 2015). The company has also introduced diet and now 'mini' versions of the Frappuccino, to answer consumer concerns about the high caloric content of some of the company's beverages.

Starbucks has made technology a critical part of its marketing of the Frappuccino. As well as marketing its sustainability on its website, it has also made a considerable effort to promote the Frappuccino through innovative, interactive features on its website. "According to the Design Your Own Frappuccino website, the number of Frappuccino drink combinations you can now create totals more than 87,000" (Nanos 2012). It has highly publicized its new flavor rotations, making them a popular 'trending' social media item and rotating the more exotic flavors brings further attention to the company.