Running head: PREPARING A COMPREHENSIVE CASE ANALYSIS

Preparing a Comprehensive Case Analysis: Part 1 Carlaine Gidman Dr. Theresa Bowen BUS490 Business Policy May 2, 2012

PREPARING A COMPREHENSIVE CASE ANALYSIS Comprehensive Case Analysis: Starbucks Corp. As a global company with once over 20,000 locations, Starbucks is the largest coffeehouse company in the world. In 1971 Starbucks opened in Seattles historic Pike Place

Market. Through innovation and strong leadership, from Howard Schultz, Starbucks brought the romance of the Italian coffeehouse experience back to the United States. Their mission continues to be inspiration and nurturing of the human spirit. As stated on the Starbucks website, with every cup, we strive to bring both our heritage and an exceptional experience to life (Starbucks.com, 2011). Today, with more than 15,000 stores in 50 countries Starbucks continues to be an internationally recognized brand for premier handcrafted coffee and tea beverages (Mergent Online, 2012a; Starbucks Corporation, 2011). Starbucks was once a thriving business, in both the United States and in international markets. However, the current economic recession, like many other companies, has caused them financial hardship. Starbucks was found to have some very strong weaknesses. Oversaturation in the market, as well as price competitiveness seemed to cause a major down turn in their customers. These weaknesses were exploited by not only their competitors, but new competitors came into the market with comparative products. Through strong leadership, and quick thinking Starbucks began a new strategy. By closing over 5,000 stores globally, consolidating operations, introducing new brands and products, and focusing on customer loyalty Starbucks Corp. has stabilized and once again can look into the future (Starbucks Corporation, 2011). As of the Fiscal 2010 yearly report for Starbucks the following objectives are to be utilized to create the current strategic plan. Sourcing, roasting, and serving high-quality coffee

PREPARING A COMPREHENSIVE CASE ANALYSIS Pursuing sustainable, profitable growth More diversified, multi-channel and multi-brand business model o Starbucks VIA Ready Brew o Frappuccino beverages o Tazo tea brand o Seattles Best Coffee New brand identity and expansion strategy Go-to-market strategy Global footprint of retail stores Distribution network and presence in grocery stores Authentic emotional connections that is established with customers in stores

Through these objectives the following strategies were established. Open 500 stores globally, 100 in the United States and 400 internationally Improvement in consolidated operating system Ongoing marketing spend for coffee commodities

These strategies are in direct relation to the external opportunities and threats that were seen to be found. A huge opportunity that Starbucks has is in the international market. Not only does Starbucks have presence in the international market place, but they have the capability of being locally relevant. This combined with their world-class sales team should allow them the ability to open the 600 stores globally (Starbucks Corporation, 2011). The largest threat that was seen to be found was with the coffee commodities, both in increases in costs, and decreases in availability. However, the strategy to consolidate operating systems and keep ongoing market spending should decrease this threat.

PREPARING A COMPREHENSIVE CASE ANALYSIS Competitive Profile Matrix CPM Matrix Starbucks Corp. Critical Success Factors Advertising Global Expansion Management Product Quality Customer Loyalty Customer Service Market Share Price Competitiveness Financial Position Brand Awareness TOTALS: Weight Rating Score .10 .09 .03 .10 .15 .20 .07 .10 .08 .08 1.00 3 4 3 4 4 3 4 2 3 4 .30 .36 .09 .40 .60 .60 .28 .20 .24 .32 3.39 Green Mountain Sara Lee Corp. Coffee Roasters Corp. Rating 2 3 2 3 2 2 1 3 3 2 Score .20 .27 .06 .30 .30 .40 .07 .30 .24 .16 2.30 Rating 1 3 4 4 2 3 2 3 3 3 Score .10 .27 .12 .40 .30 .60 .14 .30 .24 .24 2.27

PREPARING A COMPREHENSIVE CASE ANALYSIS External Factor Evaluation EFE Matrix OPPORTUNITIES Efficient and effective supply chain World-class sales organization International market, with local relevance My Starbucks Rewards loyalty program Social Media, top brand on Facebook Starbucks Digital Network Innovation, Starbucks VIA Ready Brew New technology platforms One-on-one connections with customers Store partners Weight .08 .04 .10 .03 .03 .02 .03 .03 .08 .03 Rating 4 4 4 3 3 3 3 3 4 3

Score .32 .16 .40 .09 .09 .06 .09 .09 .32 .09

THREATS Economic Conditions Competition Dependency on US operating segment Dependency on International operating segment Increases in the cost of high-quality commodities Decreases in the availability of high-quality commodities Dependency on the value of the brand Dependency on the success of business partners and suppliers Loss of key personnel or difficulties recruiting qualified personnel Adverse public or medical opinions about health effects of consuming the products Reliance on informational technology in operations TOTALS:

Weight .06 .09 .03 .03 .08 .07 .06 .02 .04

Rating 1 1 2 2 1 1 1 2 2

Score .06 .09 .06 .06 .08 .07 .06 .04 .08

.01

.02

.04 1.00

.04 2.37

PREPARING A COMPREHENSIVE CASE ANALYSIS References Mergent Online. (2012a). Green Mountain Coffee Roasters Inc. Retrieved from http://www.mergentonline.com. Mergent Online. (2012a). Sara Lee Corp. Retrieved from http://www.mergentonline.com. Mergent Online. (2012a). Starbucks Corp. Retrieved from http://www.mergentonline.com. Starbucks Corporation. (2011). Annual report. Retrieved from www.mergentonline.com