Presented by:

Jeffrey Thone
Aldin Hadzic
David Mccoy
Crystal Nguyen
COMPANY OVERVIEW
 Starbucks is an international coffee
and coffeehouse chain based in the
United States. Starbucks is one of the
largest coffeehouse company in the
world with around 11,006 stores
located in the US and more than
16,000 stores in 58 countries (early
2009)
Company History
 1971-Founded in Seattle, Washington by Gordon Bowker,
Jerry Baldwin, and Zev Siegl.
 1971-First Starbucks coffee shop opens in Seattle’s Pike
Place Market-coffee bean roasting company
 1985- Howard Schultz becomes CEO and founds II
Giornale Coffee Company-espresso beverages using
Starbucks coffee beans
 1987- Changes name to Starbucks Corporation
 1987-First stores outside of Seattle are opened in
Chicago, Vancouver, British Columbia.
 1995-Starbucks Coffee International opens in Japan
 1996-Begins selling bottles Frappuccino drinks
 2002-Fourtune magazine names Starbucks as one of the
“100 Best Companies to Work for”.
 2003-Acquires Seattle’s Best Coffee
Problems
 What could Starbucks do to make its
stores an even more elegant “third place”
that welcomed, rewarded, and surprised
customers?
 What new products and new experiences
could Starbucks provide that would
uniquely belong to or be associated with
Starbucks?
 How could Starbucks reach people who
strategic paths should Starbucks pursue to
achieve its objective of becoming the most
recognized and respected brand in the
world?
Situation Analysis:
Corporate Level
 Mission Statement

 Establish Starbucks as the premier

purveyor of the finest coffee in the
world while maintaining our
uncompromising principles while we
grow.
Six Guideline 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 delivery of our fresh 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.”
Environmental Mission Statement
 Starbucks is committed to a role of
environmental leadership in all facets
of our business.
We Will Fulfill Mission By….
 Understanding of environmental issues and
sharing information with our partners.
 Developing innovative and flexible solutions to
bring about change.
 Striving to buy, sell, and use environmentally
friendly products.
 Recognizing that fiscal responsibility is
essential to our environmental future.
 Instilling environmental responsibility as a
corporate value.
 Measuring and monitoring our progress for
each project.
Target Market
 Businessmen and businesswomen
between 25-40 years old
Various Markets
 Gourmet coffee- target 18-34 years old
coffee drinkers want something more
than just coffee (ex; Caramel Macchiato)
 Skinny Platform-lower in calories with
sugar-free syrup, skim mild, or no whip
cream.
 Non-Coffee Gourmet Drinks (Tea,
Smoothies, Chi Latte, Hot Chocolate, Ice
Tea)
 Bottled Coffee-for on the go that can be
found at Grocery Stores. (ex; Double
shot or Mocha Frappuccino)
Segmentation Strategies
 Focusing on the niche of gourmet
coffee drinkers
 Make coffee stand out compared to
others by provided Starbuck
specialty coffee or gourmet coffee.
 Expanded product line after
establishing the niche.
Competitors
 McDonald’s (McCafe)
 Dunkin’ Donuts
 Specialty coffees sold at retail
through supermarkets (Nestle)
 Kraft General Foods
 Procter & Gamble (marketer of
Folger’s and Millstone brands
Advantage Over Competitors
 Retains their brand competence by
offer their own gourmet coffee.
 Provide consistency at every store.
Marketing Mix
 Products:
 Starbucks sells brewed coffees, espresso
beverages, cold blended beverages, food items,
teas, pastries and other coffee-related items.
 Prices:
 The price of a beverages range from $1.00-$5.00
dollars.
 Location:
 All over the world and the United States.
 Promotion:
 Starbucks has been able to use a standardized
advertisement theme around the world in order
to incorporate different cultures.
SWOT ANALYSIS
 Strengths
 Starbucks has a widespread global presence. It has
more than 16,000 stores in 58 countires.
 Starbucks is a very profitable organization,
generating revenue over $10,000 millions in 2008.
With such high earnings, Starbucks has a strong
financial base that can help them undertake up and
coming businesses. (According to MorningStar)
 Starbucks is its continuous growth and expansion,
has expanded over 11,0006 store in the US and
16,000 worldwide.
 They have a strong ethical values and ethical
mission statement as follows, “Starbuck is committed
to a role of environmental leadership in all facets of
our business.”
SWOT ANALYSIS
 Weaknesses:
 Starbucks too dependent on a main
competitive advantage, the retail of coffee.
 They have been facing many difficulties in
some of its interntional operations like a joint
venture in Shalom in Israel and closed six
stores in Tel Aviv.
SWOT ANALYSIS
 Opportunities:
 Growth in Market Expansion like increase stores
worldwide in Japan, China, India and Pacific
Rim nations.
 Co-branding with other manufacturers of food
and drink.
 Threats:
 Starbucks prices are kind of expensive.
 Increase in market entry of many competitor and
copy cat brands that may pose potential threats.
Weigh Alternatives
 Limit Amount of Stores built in geographic
area
 Individualize stores to make them seem
unique
 Continue to embrace “Green Marketing
 Consider TV as a way of attracting new
consumers
 Offer promotions
 Make sure products are worth the money
Course Of Action
 Limit amount of stores built in same
geographic area
 Over saturating markets causes profits to be
spread thin over multiple stores. Therefore,
limiting the amount of stores opened in a certain
square mile radius will help stores from
“stepping on each others toes”.
 Individualize stores to make them seem
unique
 By moving away from “cookie cutter” stores,
customers will feel less like they are in a fast
food environment but rather a cool local coffee
shop that has character and individuality.
Course Of Action
 Continue to embrace “Green Marketing”
 Starbucks has taken steps to make itself
environmentally friendly and should continue to think
of new ways to improve it’s environmental image.
Starbucks is currently ranked #17 on the EPA’s list of
Top 25 Green Power Partners for purchases of
renewable energy.
 Consider TV as a way of attracting new
consumers
 Starbucks has not until recently advertised on TV.
Increasing its exposure is a great way of informing
potential consumers why Starbucks coffee is great.
Also feeds into letting the public know about it’s
steps to helping the environment.
Course Of Action
 Offer Promotions
 Offer consumers opportunities to buy their
coffee at a discounted price by running “Happy
Hour” specials. Another great promotion is
Customer Loyalty Program that rewards
customers who drink at Starbucks on a regular
basis.
 Make sure products are worth the money
 If Starbucks prices are equal to or more than our
competitors, they should make sure that the
coffee drinks they produce are worth the money.
Often times, people don’t mind paying a little
extra for something if it is better.
Action Plan
 Limit amount of stores built in same geographic area –
Closed 977 stores (worldwide) - 300 stores in USA.
Many stores are very close to each other, so the
closing of stores does not mean a lot of lost
business. Starbucks can afford to shut down more
stores.
 Individualize stores to make them seem unique -
Starbucks and Apple should build on their
partnerships and start offering stores with pay-to-
use Apple computers with internet.
 Continue to embrace “Green Marketing” - Starbucks
was ranked #15 on the U.S. Environmental
Protection Agency's list of Top 25 Green Power
Partners for purchases of renewable energy.
Action Plan
 Consider TV as a way of attracting new
consumers – Start playing commercials on
TV and try to team with Apple for a
Starbucks-Apple movement.
 Offer Promotions - Offer a punch card with a
buy 5 beverages, get 1 free promotion.
 Make sure products are worth the money –
Increase product quality awareness by
advertising in magazines, newspapers, on
TV, radio, and internet the superior
ingredients quality. Offer YouTube specific
commercials.
Industry Sales Trend
 2008 Store closures led to pretax charges
of ~ $338 million, including $8 million in
severance costs and ~$130 in lease-
termination costs and future lease
obligations.
 Stocks have been on a decline since
October 2006 and have fallen by 79%
 New global markets should bring in good
money
Forecast
 Now – 1 Year
 Increase the global market.
 Set up new more stores in existing countries
 Control the amount of stores built in the
same area
 Shut down appropriate stores
Forecast
 1-5 Years
 Enter new global markets
○ Some rich countries (high GNP) that lack Starbucks:
Luxembourg, Norway, Denmark, Iceland
 Improve store design
○ In an attempt to get away from the cookie-
cutter store design; Starbucks will most likely
redesign the stores and give them a more
sophisticated
QUESTIONS?

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