ppt on starbucks case study
TRANSCRIPT
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CASE STUDY
STARBUCKS CORPORATION
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Group members
Darpan GoswamiDurlov Protim BoruaTanvi HussainPranami BorahDimpal Bharali
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Established in 1971 at Seattle, Washington Famous for its quality fresh-roasted coffee beans and stylish atmosphere. Over 16000 stores worldwide Product lines include :
− beverages (coffee, Tazo tea, ice creams)− pastries− whole coffee beans− music CDs
Overview
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1971 – Starbucks opened in Seattle’s Pike Place Market.
1982 – Howard Schultz joined Starbucks .1983 – Schultz travelled to Italy
1985– Howard Schultz established Il Giornale Coffee bar.
1987 – Il Giornale acquired Starbucks and changed the name into Starbucks Corporation.
1992 – Starbucks went public at $17 a share
1996 – Starbucks Coffee International opens its first non-North American store in Japan at Tokyo
Timeline
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Timeline
1996 – Starbucks’ began selling bottled Frappuccino.
1998 – Acquired Seatle Coffee company.
1999 – Starbucks acquired Tazo Tea company. 1999 – Acquired Hear Music, a San Francisco-based company 1999 – Starbucks opened in China(Beijing) 2002 – Starbucks opened in Mexico ( first store in an origin country)
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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.”
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SWOT
Strengths Efficient Management Sound financial position Valued and motivated employees Effective distribution channel Increase in Product line Good corporate image Well trained staff Industry market leader Ambience of Starbuck stores
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Weakness
Profit generation slowed downProduct pricing(expensive)SizePromotion strategySelf cannibalization
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Opportunities
Emerging International marketsGood relations with suppliers and
partnersSatisfied customersHigh visibility locationsLocal themed food items Alliance and acquisitionsExclusive purveyor of Narino Supremo
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Threats
US market saturationAntiglobalizationFierce competitionMediaCultural and political issues in Foreign
countries
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Core Competencies
Starbucks branding High quality Good reputation
Ability to innovate, adapt to the culture Product: adapt to the taste Service: maintain the customer loyalty
Value creation Customers Employees Suppliers
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Issues :
The problem is anti-globalization which makes more difficult for Starbucks to enter in new markets
Symptoms:• Protests from anti-globalization activists• Those activists have enough media power it leads to
international scandals.• They receive push-backs in new markets
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Analysis using porters five forces model
Other beverages apart from star bucks coffee and tea –include soda fruit juice, water, beer and other alcoholic drinks
Lower end or “less luxurious” coffee places Places that offer people a place to hang out, chat, relax or even
work e.g. tea houses, fast food places, bars.. Entry barrier for coffee industry is relatively low, even for premium
brands like star bucks Threat of new entrants include fast food chains such as
McDonalds, Burger King etc.
Threat of substitution
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Competitive rivalry
Other coffee chains. examples include Café Nero, Coffee Republic & Costa Coffee.
Smaller privately owned coffee houses Secondary coffee houses like McDonalds, Burger King
etc.
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Bargaining power of suppliers
Low bargaining power of suppliers due to importance of star bucks business to any individual suppliers
Suppliers of plastic products like cups,napkins,lids etc have little amount of bargaining power as large amount of alternatives are available
With new entrants like McDonalds who claim to offer premium roast coffee of reasonable quality for lower price which increases the bargaining power of buyers
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Starbucks’ Strategy
Rapid store expansion strategy
• Domestic store expansion− “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 Asia Pacific region
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Starbucks’ Strategy
• Employee Training and Recognition− Systems to recruit, hire and train baristas and store managers
training programs awards for partners
• Store Design, Planning, and Construction− High-traffic, high-visibility store locations− Control of average store opening costs
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Starbucks’ Strategy
• Store ambience− The concept of “everything matters”
− Assessment of standards
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Starbucks’ Strategy
Product Line
•Wide range of products choices•Selling music CDs •Joint ventures
PepsiCoDreyer’s Grand Ice Cream
•Acquisitions Hear Music Seatle coffee company
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Financial Analysis
Proprietory ratio or equity ratio= Shareholders fund/ Total assets= 0.75
Gross profit ratio= 73% Operating ratio= Cost of goods sold+ operating
expenses/net sales *100 = 57.45% Debt-equity ratio= outsiders fund/shareholders
fund=0.003
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Recommendations
Increase spending on advertisement Create a specific brand for European expansion,
or acquire an already well established brand with still growth potential left
Expand and enhance the existing network by targeting new markets
Rethink their blanket strategy Involvement in more social responsibility
campaign They should come up with more food products
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Starbucks should come up with more vending machines in places of high footfall
They should establish coffee lounge with sections dedicated to movies, music, books in big cities
They should also increase its presence in developing countries
Try to develop good relations with NGOs
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Thank you