STARBUCKS GLOBAL

Presentation Outline
About Starbucks
     

Overview Timeline Corporate Values and Business Principles Mission Statements Corporate Social Responsibility
 

Industry and Competitive Analysis  Coffee industry  Competitor analysis  Generic competitive strategy

Starbucks Strategy
  

Conclusion Recommendation

Store expansion strategy Product line Coffee purchasing strategy

Overview

 Established in 1971 at Seattle, Washington  Famous for its quality fresh-roasted coffee beans and stylish atmosphere.  Over 9,000 stores worldwide  Product lines include : beverages (coffee, Tazo tea, soda, juices) pastries whole coffee beans coffee-related hardware and equipment merchandise (mug, CDs)

Timeline
1971

Starbucks Coffee, Tea, and Spice store (coffee bean roasting) opened in Seattles Pike Place Market. Howard Schultz joined Starbucks. Howard Schultz established Il Giornale Coffee Company. Il Giornale acquired Starbucks and changed the name into Starbucks Corporation. Starbucks decertified the union and made IPO. Starbucks Coffee International opens in Japan Starbucks implemented ESOP.

1982 1986 1987

1992 1995

Timeline


1996 Starbucks began selling bottled Frappuccino. 1999 Starbucks acquired Tazo Tea. 2000 Acquired Hear Music, a San Francisco-based company 2003 Starbucks acquired Seattles Best Coffee 2005 Introduced Starbucks Coffee Liqueur; Acquires Ethos Wate

 

Corporate Values and Business Principles

 Building a Company with Soul  Opposing Franchising because of Quality Control and Culture  Only selling coffee beans without artificial flavors.  Satisfy customers by all means.  Employees contribution and involvement in making Starbucks a better company

About Starbucks

Mission Statements
 Company Mission Statement:
Establish Starbucks as the premier purveyor of the finest coffee in the world while maintaining our uncompromising principles while we grow.

 Environmental Mission Statement:

Starbucks is committed to a role of environmental leadership in all facets of our business.

Mission Statement
Six guiding principles: Provide a great work environment and treat each other with respect and dignity. Embrace diversity as an essential component in the way we do business. Apply the highest standards of excellence to the purchasing, roasting, and fresh delivery of our coffee. Develop enthusiastically satisfied customers all of the time. Contribute positively to our communities and our environment. Recognize that profitability is essential to our future success.

Identifying the markets

Current market: over 50% of worlds coffee consumption Well-developed market, longstanding coffee drinking traditions Affluent population, room for gaining market share

Current market: 12-15% of worlds coffee consumption Developing market, longstanding tea drinking traditions High potential for market growth

Current market: under 10% of worlds coffee consumption Traditional coffee growing countries Less affluent population, room for gaining market share in frequented commercial districts

Case


Having installed its coffee stores across much of North America, Starbucks Corp. is aggressively expanding overseas -- and like other global retailing icons, it is finding that international fame can carry a price. Starbucks has been boycotted by anti-war protesters in Lebanon and criticized by New Zealand advocates seeking higher coffee compensations to farmers. And, faced with the possibility of terrorist attacks, the company has pulled out of Israel. Such dissent overseas recalls some of the problems faced by the McDonald's Corp., which has been targeted by everyone from anti-war demonstrators to vegetarians. What some see as growth, others see as corporate colonialism The rise of Starbucks can be directly attributed to the following factors; the emphasis placed on product quality, high employee standards, and creating the perfect cup of coffee. How a small idea became a huge business. Growing up in Brooklyn Howard Schultz had no aspirations. His only goal was to escape the struggles his working-class parents lived every day .

Starbucks Strategy
Rapid store expansion strategy

Domestic store expansion International store expansion Employee Training and Recognition Real Estate, Store Design, Planning, and Construction Store ambience

Product Line Coffee purchasing strategy

Starbucks Strategy
Rapid store expansion strategy
Domestic store expansion A three-year expansion strategy Starbucks everywhere approach International store expansion Company-owned and company-operated stores or licensing Created a new subsidiary, Starbucks Coffee International Expanded its consumer products channel in South Pacific region

New strategic focus: Europe

 

Main target of international expansion in the next two years Especially important countries:
    

Germany France Italy Netherlands Spain

Number of stores
10 00 12 00 14 00 16 00 18 00

G
20 0 40 0 60 0 80 0 0

er m an y ce ly m Fr an It a

Un it e d Ki ng do nd s n ai rg la Sp ux em bu th er Ne

Be lg iu m -L

Sw ed en k De nm ar ia d Po G rt ug re Ir e al ec e la nd

Au st r an Fi nl

Possible long-term penetration

Company statement

We are in the coffee business, but really we are in the people business serving coffee.

Starbucks Strategy
Employee Training and Recognition Systems to recruit, hire and train baristas and store managers screening training programs awards for partners Real Estate, Store Design, Planning, and Construction A broad range of store formats (the right image and character) A stores of the future project team High-traffic, high-visibility store locations Control of average store opening costs Wi-Fi availability at stores

Starbucks Strategy
Store ambience
The concept of everything matters
Assessment of standards

Starbucks Strategy
Product Line
Wide range of products choices Special product promotion Selling music CDs Joint ventures PepsiCo Dreyers Grand Ice Cream Jim Beam Brands Acquisitions Hear Music Ethos Water Starbucks Cards Partnership with Bank One

Starbucks Strategy
Coffee purchasing strategy
Building relationship with growers and exporters, checking on agricultural conditions and crop yields, and searching out varieties and sources that would meet Starbucks standards. Using fixed-price purchase commitment and purchasing coffee future contracts Contributing to the sustainability of coffee growers and helping environment conservation Purchasing and marketing Fair Trade Certified coffee Promoting coffee cultivation methods that protected biodiversity and maintained a healthy environment

Industry and Competitive Analysis

Coffee industry
Coffee drinking trend
Coffee is the second most consumed drink after water. Americans substitute specialty coffee for alcohol. Coffee shops are a great place to meet people. Coffee is an affordable luxury. Consumers are more knowledgeable about coffee.

Coffee beans production

In 1994, coffee was the second most traded commodity after Oil. There are two types of Coffee, namely basic and specialty.

Industry and Competitive Analysis Competitor analysis

2 Types of Competitor: Coffee shops and restaurants Nationwide coffee manufacturers (rival brands of specialty coffee)

Industry and Competitive Analysis

Competitor analysis
Future goals
To grow bigger To better position themselves as an alternative to Starbucks

Current strategy
Merger of local and regional chains of coffee shops etc.
Assumptions Competitors assumptions about themselves Competitors assumptions about the industry and other companies in it

Industry and Competitive Analysis

Competitor analysis Capabilities (areas of competitors strengths and weaknesses) Product Dealer/distribution Operations R&D Financial strength Organization & managerial ability Personnel turnover

Industry and Competitive Analysis

Generic Competitive Strategy

Closer of Stores


On July 1, 2008, the company announced it was closing 600 underperforming company-owned stores and cutting U.S. expansion plans amid growing economic uncertainty.On July 29, 2008, Starbucks also cut almost 1,000 non-retail jobs as part of its bid to reenergize the brand and boost its profit. Of the new cuts, 550 of the positions were layoffs and the rest were unfilled jobs . Starbucks also fired 2000 people in 2009 due to Recession

2009 New York City bombing



At approximately 3:30 a.m. on May 25, 2009, a Starbucks store on the Upper East Side in the Manhattan in New York City, New York, was bombed. A small improvised explosive device was used and damage was limited to exterior windows and a sidewalk bench; there were no injuries.

Current Situation - 2011

 

Starbucks Coffee Company announced their plan to perform another global reduction because of the present economic condition. The reduction will take place by the end of the year which will include the closing of 200 locations in the U.S., 100 locations internationally, and over 6,000 partners will face job loss. A notice was sent to all currently operating Starbucks locations at the end of January, explaining there will be another reduction soon, however, it did not reveal exactly which locations will close. Starbucks is a company that is well known for accommodating difficult schedules and many college students take advantage of this. Several people are on edge because they so not know if their store will be closing of not. Starbucks still remains a Brand That has always been loyal