starbucks presentation
DESCRIPTION
Starbucks history, principles and summaryTRANSCRIPT
summarized by
Andi S. BoedimanStrategic Innovation Consultant
www.ideonomics.com
History
• Founded in 1971.• Coffee, tea, and spice store.• Named in honor of the first mate in
Herman Melville’s Moby Dick.
History• 1982: Schultz enters as head of marketing• 1987: Jerry and Gordon sold Starbucks and Giornale
acquired it making Howard Schultz the CEO and the name changed to Starbucks Corporation.
• 1996: Starbucks and Dreyer's Grand Ice Cream, Inc. introduces Starbucks® Ice Cream and Ice Cream bars, making Starbucks the number one brand of coffee ice cream in the U.S.
• Began selling bottled Frappuccino• 1998: Introduced a lighter and milder tasting line of
coffee and Tiazzi, a mixture of tea, fruit juice, and ice.• Through Kraft Foods begins to extending the Starbucks
brand into grocery stores
History2004• Began its in-store CD burning service, allowing
customers to create personalized CDs at the Starbucks Hear Music
• Through Tazo and Kraft Foods they began distributing Tazo super-premium teas in U.S. grocery stores.
• Jim Beam Brands Co. agrees to develop and market Starbucks-branded coffee liqueur outside of Starbucks stores.
• Through XM Satellite Radio, Starbucks offers a 24-hour "Starbucks Hear Music" channel.
• Introduced a new Frappuccino, a light blended coffee beverage
Howard Schultz• Kitchen appliance
salesman• Hired by Starbucks in
1982• Trip to Milan in 1983• Left the company in
1985• Bought the company in
1987
Objective
• To establish Starbucks as the most recognized and respected brand in the world.
Mission Statement
• To establish Starbucks as the premier purveyor of the finest coffee in the world, while maintaining our uncompromising principles while we grow.
Culture
• Third Space (after home & work)
• Employee Focus• Corporate Social Responsibility
http://www.starbucks.com/aboutus/environment.asp
6 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.http://www.starbucks.com/aboutus/environment.asp
6 Principles
• 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.
http://www.starbucks.com/aboutus/environment.asp
Strengths
• The product is strongly differentiated from those of rivals
• Strong brand-name image/company reputation
• Good supply chain management • Better product quality relative to
rivals• Wide geographic coverage• Joint ventures
Weaknesses
• Leverage the brand to other that has to be proven to strengthen the brand portfolio strategy such as Hear Music
Opportunities
• Expanding into new geographic markets
• Expanding the company’s product line to meet a broader range pf customer needs
• Joint ventures that can expand the firm’s market coverage or boost its competitive capability
Threats
• Loss of sales to substitute products • Restrictions trade polices on the part
of foreign government• Entry of product new competitors
Differentiation Strategy
• Unique in ways that are valuable to a wide range of customers.
Attributes
• Command a premium price for its product
• Increase unit sales• Gain buyer loyalty to its brand
The Growth of Starbucks
Starbucks Today
• Starbucks now has approximately 6,294 coffeehouses in North America alone,
• And they have approximately 900 locations outside of North America.
They grow up so fast…but how?
• In 1991, Starbucks became the first privately owned company to offer a stock option program to all of their employees.
• Higher employee satisfaction leads to lower turnover rates, which in turn leads to lower employee training costs, which leads to greater profits.
• Starbucks also gives back to the community, both local and abroad.
• This provides Starbucks with plenty of good publicity.
• Starbucks also takes great interest in its suppliers well-beings.
What major bookstore is a Starbucks most likely to be found inside?
• In 1993, Starbucks Corporation started a relationship with Barnes and Nobles, Inc.
Since, they have won accounts with many other companies, such as:
• Sheraton Hotels (now Starwood Hotels)
• United Airlines• Nordstrom• Canadian Bookstore
Chapter
• Westin Hotels• Canadian Airlines• Kraft Foods (to extend
into grocery stores)• Hyatt Hotels Corp.
Hear Music™ Brand Portfolio
Hear MusicMedia Bars
Hear MusicCoffeehouses
& Stores
Hear MusicXM 75
Hear MusicRecord Label
& CD Sales
• Starbucks brand is about the in-store experience• Designed to enhance the sensory signals• Hear Music = “Starbucks” coffeehouse music• Allows the customer to interact and create their own
music, thus enriching the experience
Hear Music™ Brand Portfolio
Products• 66 Exclusive & Co-
Produced Titles– Artist Choice– Opus Collections– In Store Playlists
• Selected Artists & Albums
Price• Mid to High + $2
Place• Starbucks Coffee
Shops• Hear Music Stores• Hear Music WebsitePromotion• In Store• Press (Grammy
Award)• Online• XM Radio
Hear MusicMedia Bars
Hear MusicCoffeehouses
& Stores
Hear MusicXM 75
Hear MusicRecord Label
& CD Sales
Hear Music™ Brand Portfolio
Product
• XM Channel 75 Launched in Oct 2004
• The Voice of Music at Starbucks
Price
• $7.99/MonthPlace & Promotion
• Satellite Radio Receiver
• Online
Promotion
• In Store
• Press
• Online
• XM Radio
Hear MusicMedia Bars
Hear MusicCoffeehouses
& Stores
Hear MusicXM 75
Hear MusicRecord Label
& CD Sales
Hear Music™ Brand Portfolio
Product
• Unique stores that encourage customers to discover music through personal interaction
• Customers can create personal compilations
• Library of 250,000+ titles available for mixing
• Large selection of titles available for sale
Price
• $6.95 for 5 songs + $1 for each additional tune
Place & Promotion
• Berkeley
• Santa MonicaPromotion
• Press
• Online
Hear MusicMedia Bars
Hear MusicCoffeehouses
& Stores
Hear MusicXM 75
Hear MusicRecord Label
& CD Sales
Hear Music™ Brand Portfolio
Product
• Interactive CD creation within Starbucks Stores
• Customers can create personal compilations
• Library of 250,000+ titles available for mixing
• Large selection of titles available for sale
Price• $6.95 for 5 songs +
$1 for each additional tune
Place & Promotion• 45 stores throughout
Austin, TX & SeattlePromotion• Press• Online• Stores
Hear MusicMedia Bars
Hear MusicCoffeehouses
& Stores
Hear MusicXM 75
Hear MusicRecord Label
& CD Sales
Hear Music Brand Weaknesses• Low Awareness
– 19% of those surveyed made no association with Starbucks– Many could not make the connection between Hear Music
and Starbucks without prompting• Wrong usage occasion for extended music interaction
– Starbucks coffee shops largely “on the go” & business customer
– Most music consumers do not think of Starbucks as a destination for music
– Ability to download to a digital media player• Unclear Target Audience
– Starbucks persona vs. technically challenged– Starbucks coffee customer vs. Music Purveyor
• Mixed Messages– Starbucks Music vs. Variety of Music
Starbucks Gives Back
CARE
• Starbucks distributes funds in response to any natural disasters that may occur in countries where their coffee and tea originate.
Starbucks Foundation
• Created by the Chairman of Starbucks, Howard Schultz.
• Dedicated to creating hope, discovery, and opportunity in communities where Starbucks are located.
Support Conservation International’s Conservation Coffee Program
• Encourages ecologically sound coffee growing practices.
Keeping it Fresh
• Starbucks tries to introduce a few new beverage ideas every year, just to keep things interesting.
summarized by
Andi S. BoedimanStrategic Innovation Consultant
www.ideonomics.com
notes
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