In its first few years, Starbucks found itself in a competitive environment that was not too stiff. The market was largely composed of small-scale coffee chains that were basically regionally-based and not as widely-distributed across the continent as Starbucks has been. There were also thousands of independent specialty-coffee shops that also served a wide range of food and beverages including beer and liquor. Other sources of competition were the bagel and donut stores that also offered satisfactory coffee. All these competitors, however, have not really been enjoying the product image and brand recall that Starbucks has. No presence has ever been stronger and consistent than what Starbucks has in the coffee scene.

The biggest ‘competition’ that Starbucks encountered around that time had nothing to do with other establishments. The biggest hurdle was how to ingrain the specialty-coffee culture among Americans who basically did not regularly drink coffee as much as Europeans did. Starbucks has since succeeded in surmounting the obstacle.

Starbucks wanted to caffeinate the world. Aside from saturating the US market, the company wanted to establish 15,000 international stores all over the world. This makes practically everybody as its target market.

The company was inspired with the fact that coffee consumption was on the rise in the United States. Approximately half of US population (109 million) was drinking it everyday, with additional 52 million as occasional drinkers. There were still 8 states in the United States that did not have company-operated Starbucks stores.

There were 300 metropolitan areas in the US and Starbucks was only in half of them. The company believed that it was far from reaching saturation levels since only 7 states had more than 100 Starbucks stores.

Starbucks’ consumer behavior has not changed. Regardless of market profile (urban versus rural or new versus established), the customers were using the stores in a consistent manner.

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Via mhhe