Starbuck's Analysis

In: Business and Management

Submitted By bruins89
Words 1171
Pages 5
Starbucks Coffee Company

I. Current Performance Company Overview: Starbucks is the most well known specialty coffee company around the world. Starbucks operates over 11,000 stores throughout 36 countries. Also, the company has about 10,000 employees. The company has shown horizontal integration in the last few decades into the Japan market which has shown to be extremely successful. The next project for the company is to expand their market further into India. There are also some concerns for the company. One thing that is well known is that Starbucks is heavily dependent on one product which is their coffee. If something goes wrong with one of their suppliers and their ability to roast coffee around the world, Starbucks could be facing some serious problems very quickly.

Current Objectives for International Expansion: -Be the first to enter international market such as India to gain a head start over competitors. - Build on growing desire for Western brands. - Take advantage of higher coffee consumption rates in different countries.

II. External Factor Analysis External factors | Weight | Rating | Score | Opportunities | | | | Expansion into economy level market | .2 | 4.5 | .9 | New products | .1 | 4 | .4 | Expansion into India | .2 | 4 | .8 | Threats | | | | Consumer Trends focusing moving away from caffeine into other healthy substitute products | .3 | 5 | 1.5 | Increased competition/ new competitors | .1 | 3.5 | .35 | Dependence on others for specialty coffee | .1 | 3 | .3 | | 1.00 | | 4.25 |

The external analysis shows the opportunities and threats in the external environment. These two factors must be closely monitored for changes. Starbucks’s must take advantage of their opportunities such as expanding into India while eliminating their threats such as offering substitute products that do not have caffeine in…...

Similar Documents

Starbuck's Case

...Starbuck’s case What went wrong and what would you recommend for improvements? Stock price plummeted Starbuck’s experience lost its flavor Competition from below and above Too much real estate, too fast : Recommendation : starbuck’s stores cannibalizing each others sales => relocate Starbucks’s stores strategically It was as an upper class coffee chain that they first made their mark and was what defined the success of the company. Sure people were aware that the beverages at Starbucks were more expensive than at many cafés but they still frequented the outlets, as it was a place ‘to see and be seen’. Setting up a brand as a symbol of status has served many companies well but if the company becomes too commercial and widely used it will lose much of its’ initial appeal. After all, if every second person appeared to be wearing Armani clothing, would anyone pay $400 for an Armani shirt. Overpriced products Once their growth really took hold they gradually gained a greater reliance on less-affluent consumers. Consequently, the reason for the decline at a time of disappointing economic growth highlights that their customer base is now predominantly the middle and lower wealth classes who have sought to save in times of trying conditions. The expensive cup of coffee is very 5 years ago. Now, in times of recession, people realize that good coffee can be had much, much cheaper at Dunkin', McDonalds, or just pulled out of the ol' home coffee brewer. Even......

Words: 376 - Pages: 2

Case Analysis

...Starbucks Case Analysis | June 30 2013 | Crafting &Executing Strategy | | Class: Advanced Finance 53A Instructor: Dr. Deane Pham, MBA, Ph.D. Group 3: 1. Le Van Manh 2. Le Bao Long 3. Tran Thi Minh Phuc 4. Pham Thi Phuong Thao 5. Nguyen Minh Thu 6. Pham Ngoc Mai 7. Le Pham Nhat Linh 8. Le The Vinh Content | | Executive Analysis……………………………………………………………………………. | 2 | Case Analysis………………………………………………………………………………….. | 3 | Vision……………………………………………………………………………………… | 3 | Changing Strategy ………………………………………………………………………… | 4 | Generic competitive strategies……………………………………………………………. | 5 | Key policies, practices, business principles………………………………………………. | 6 | Core values……………………………………………………………………………….. | 7 | Michael Porter’s five forces analysis……………………………………………………… | 9 | PESTEL analysis………………………………………………………………………….. | 10 | SWOT analysis……………………………………………………………………………. | 11 | Social responsibility strategy (CSR)…………………………………………..................... | 12 | Financial performance …………………………………………………………………… | 13 | Top management issue……………………………………………………………………. | 14 | Ongoing issues………………………………………………………… …………………. | 15 | Recommendation …………………………………………………………………….. | 16 | I/ Executive Summary With more than 18,000 stores in 62 countries around the world, Starbucks is currently one of the biggest companies in the food and beverage industry, with total revenue of 11.7 billion dollars in 2011. Under the current leadership of Mr. Howard......

Words: 5918 - Pages: 24

Starbuck’s Quest 2006

...\ Starbuck’s Quest 2006 A SWOT analysis address the components of the organization’s environment which is internal strengths and weaknesses, and external opportunities and threats. Strength we capitalize on them and Weaknesses we shore up. As for opportunities we invest in, and threats we identify. Data that are used for Internal components are customer feedback , employee information , Capabilities, Resources, Processes. Data that are used for external components are secondary data, environment, industry , competitive ,customer feedback primary. The reason behind achieving these organizational components are to achieve ideas which result in organizational goal statement. Goal statement are derived by (Opportunities +threats), strengths-weaknesses, Strength vs opportunities. One great example of a mega organization that we can use the SWOT analysis on is “Starbucks Global Quest 2006”. Starbucks was established in 1971 in Seattle, Washington. This company is famous for its quality fresh roasted coffee and friendly atmosphere. The company sits on over 9,000 stores worldwide. It’s product lines include beverages (coffee, Tazo tea, soda, juices),pastries, whole coffee beans, coffee-related hardware and equipment, merchandise (mug, CDs) In 1971 Starbucks Coffee, Tea, and Spice store (coffee bean roasting) opened in Seattle’s Pike Place Market. 1982 A man called Howard Schultz joined Starbucks. 1986 Howard Schultz established “Il Giornale......

Words: 1028 - Pages: 5

What Does a Porter's Five Forces Analysis Reveal About the Industry in Which Dunkin' Donuts and Starbuck's Compete, and What Are Its Strategic Implications for Dunkin' Donuts? 2.

...Topic 1 – Overview Theories of Management Topic’s Learning Objectives  Examine and evaluate theories of management  Adequately outline the management process  Assess ways of management Introduction Organizations’ accountability and profitability depends on how well the business is managed. This week we are going to examine the management theories, when each theory can be used and assess ways of management. Before we continue to the main analysis take a few minutes to see this video in YouTube http://www.youtube.com/watch?v=Ubxb9KUOQtI and then proceed to reading. 1 Main Analysis What are the Management Theories? Management theories are implemented to help increase organizational productivity and service quality. Not many managers use a singular theory or concept when implementing strategies in the workplace: They commonly use a combination of a number of theories, depending on the workplace, purpose and workforce. Classical Management As shown in the figure below there are three classical management approaches: (1) scientific management, (2) administrative principles, and (3) bureaucratic organization. Scientific Management Scientific approach was found in 1911 by Frederic W. Taylor and includes four guiding action principles. 1. Develop for every job a “science” that includes rules of motion, standardized work implements, and proper working conditions. 2. Carefully select workers with the right abilities for the job. 3. Carefully train......

Words: 3104 - Pages: 13

Swot Analysis

...PURPOSE OF A SWOT ANALYSIS 1 The Purpose of a SWOT Analysis Charles Anderson Joyner III Grantham University PURPOSE OF A SWOT ANALYSIS 2 Abstract Every business to include the largest ones that control their areas of industry--has a limited supply of manpower, production capacity and capital. Evaluating the company’s strengths, weaknesses, opportunities, and threats helps it determine how to allocate these resources in a manner that will result in the highest possible potential for revenue growth and profitability. The management team examines where the company can compete most effectively. The company more times than not discovers competitive strengths that have not been fully utilized in the past in addition to critical areas that needs to be improved in order for the business to more effectively compete. A realistic assessment also prevents strategic blunders like entering a market with products that are clearly inferior to what well-entrenched competitors are offering. Continuous improvement in all areas of a company’s operations is an important aspect of staying ahead of competitors. Weaknesses and opportunities can--and must--be turned into future strengths. PURPOSE OF A SWOT ANALYSIS ...

Words: 1304 - Pages: 6

Stackbucks Analysis

...Introduction The aims of this assignment is evaluate Starbuck’s internal and external environment and by doing so, provide strategic recommendations based on the analysis. The following table is a summary of the cooperation. Name | Starbucks Corporation | Industries served | Coffeehouses, Restaurants | Geographic areas served | Worldwide | Headquarters | U.S. | Current CEO | Howard Schultz | Revenue | $ 14.9 Billion (2013) [25% Profit Gains] | Total no. of retail stores | 20,184 (2013) 13,279 in the United States | Employees | 200,000 (2013) | Main Competitors:Around the world | McDonald's Corp., Dunkin' Brands Group, Inc., Nestlé S.A., Green Mountain Coffee Roasters, Costa Coffee, Caribou Coffee Company | Starbuck’s Global Footprint Table 1 SOURCE: The Washington Post, (2013), A coffee giant’s global footprint [ONLINE]. Available at:http://apps.washingtonpost.com/g/page/world/a-coffee-giants-global-footprint/514/ [Accessed 12 March 14]. Starbucks’ External Environment Porter’s five forces Threat of new entrants: Medium-High New entrants could include local coffeehouses and companies like 7-eleven (more convenient than Starbucks) that offer new blends of coffee drinks. The entry barrier for the coffee industry is relatively low, even for premium coffee like Starbucks. Any large and well-funded company could be potential entrants. McDonalds, for instance, is able to quite easily add specialty coffee to their existing services and......

Words: 4122 - Pages: 17

Starbuck Case Study Analysis

...yisStarbucks Case Analysis: I. Problem Identification and Decision To Be Made Starbuck’s main decision needing to be made is to determine whether they should allocate $40 million to extra labor in order to better satisfy their customers. Starbuck’s believes that they have created a recession proof product; however, recent marketing research determined that is not the case. Customer satisfaction has been steadily declining and their customer’s perceptions on what determines excellent customer service has changed in recent years. This change in customer perceptions is due in part to the fact that their customer base has shifted to a younger, less educated clientele that hold different attitudes toward Starbucks than the previous customer base. The lack of marketing organization within Starbucks is surprising. They currently have no chief marketing officer and their marketing department functions as 3 different groups: analytical marketing research group, new product development group, and a promotional development marketing group. This has created a major problem for Starbucks because, as stated in the case, “We tend to be great at measuring things, at collecting market data, but we are not very disciplined when it comes to using this data to drive decision making.” This is a problem because although they have a vast amount of data about their customers, they don’t know how to turn it into money. One of the most obvious problems that I see with Starbucks is the...

Words: 2235 - Pages: 9

Analysis

...Starbucks Industry Profile and Organization Analysis Spring 2013 MGMT-4900-01 Lindsay Holleman, Alex Lawson, Garrett Pinciotti, Russell Pellichino Starbucks |2 Table of Contents Section I Environmental Profile ........................................................................ 5 Current Environment .............................................................. 5 Future Environment ................................................................ 11 Assessment of Relevancy ...................................................... 13 Section II Industry Profile .................................................................................. 14 Historical Performance ...................................................................... 14 Fast Food Industry.................................................................. 14 Coffee and Snack Shop Industry ............................................ 17 Projected Performance...................................................................... 17 Fast Food Industry.................................................................. 18 Porter’s Five Forces .......................................................................... 19 Rivalry Among Competitors .................................................... 20 Potential Entry of New Competitors ........................................ 25 Potential Development of Substitute Products........................ 31 Bargaining Power of Buyers .....................................

Words: 27609 - Pages: 111

Strategy Analysis

...Strategic Analysis Of Starbucks Corporation Strategic Analysis Of Starbucks Corporation By: Nithin Geereddy (ID: 80842082) Strategic Analysis Of Starbucks Corporation 1) Introduction: Starbucks Corporation, an American company founded in 1971 in Seattle, WA, is a premier roaster, marketer and retailer of specialty coffee around world. Starbucks has about 182,000 employees across 19,767 company operated & licensed stores in 62 countries. Their product mix includes roasted and handcrafted highquality/premium priced coffees, tea, a variety of fresh food items and other beverages. They also sell a variety of coffee and tea products and license their trademarks through other channels such as licensed stores, grocery and national foodservice accounts.1 Starbucks also markets its products mix with other brand names within its portfolio of companies, which include Teavana, Tazo, Seattle’s Best Coffee, Starbucks VIA, Starbucks Refreshers, Evolution Fresh, La Boulange and Verismo. Starbucks had total revenue of $14.89 billion as of September 29th, 2013.2 2) External Environment Of The Retail Market For Coffee & Snacks: 2.1) Industry Overview and Analysis: Starbucks primarily operates and competes in the retail coffee and snacks store industry. This industry experienced a major slowdown in 2009 due to the economic crisis and changing consumer tastes, with the industry revenue in the US declining 6.6% to $25.9 billion. Before this, the industry had a decade of growth......

Words: 5331 - Pages: 22

Starbuck's Cafe Strategic Management

...5/23/2015 5/23/2015 Saqib Nawaz Assignment 2 Saqib Nawaz Assignment 2 Starbuck’s Coffee Strategic Management Starbuck’s Coffee Strategic Management Executive Summary: Starbucks could be an international company operative within the low retail market since 1972. The corporate, that has positioned itself as a merchandiser of premium low merchandise, has greatly swollen its market position and presence within the past 20 years. Despite a positive market outlook, Starbucks is in would like of strategic content because the company faces to not be underestimated challenges within the short- to medium-term. Those challenges emanate from established competitors like some others fast food companies internationally defy Starbuck’s market leadership position by driving aggressive low-pricing methods in established and rising markets. Moreover, new trends within the low business have spread out new segments with high growth potentials. Starbucks remains unsure however tackle new segments and what impact trends may wear its product portfolio. This report is supposed to be a strategic scout that aims at illuminating totally different strategic alternatives within the lightweight of the numerous opportunities and threats that lie ahead. The report will provide recommendation on a way to utilize internal strengths to maximize opportunities and the way to attenuate weaknesses to avoid threats. (Lee, Ristic and Franke, 2014) Question No. 1 Which of porter's competitive......

Words: 1559 - Pages: 7

Financial Statement Analysis

...Financial Statement Analysis Paper Starbucks Coffee Company SUMMARY/INTRODUCTION Starbucks identifies itself as “the premier roaster, marketer and retailer of specialty coffee in the world” and fits squarely in the Coffee Shop industry. According to the IBISWorld Industry Report 72221b (Coffee & Snack Shops in the US), the “industry is composed of establishments that prepare or serve specialty snacks and nonalcoholic beverages including ice cream, frozen yogurt, cookies, donuts, bagels, coffee, juices, smoothies and sodas.” This fits the profile of Starbucks perfectly. Porter’s Five Forces: Supplier Power: Starbucks, for instance, identifies as being susceptible to supply of their coffee beans, such as weather, natural disasters, crop disease, general increase in farm inputs and costs of production, inventory levels, and political and economic conditions; all of these have a significant impact on crop pricing. Reliance on a singular bulk commodity, namely coffee beans, leads to high exposure should there be any roadblocks in supply come up. Many of these factors are out of companies’ control, such as material interruption in service providers and distribution channels, increased trade taxation, shipping embargoes or customs restrictions, or any natural disasters which may threaten the supply chain. (Information sourced from Starbucks Fiscal Report, 2014) Threat of Substitutes (High): Aside from heavy competition from storefront competitors, coffee snack......

Words: 3339 - Pages: 14

Starbuck’s Hr Practices Ensure Its Brew Is a Winner

...Case1 Starbuck’s HR Practices Ensure Its Brew Is a Winner Question 1 What HR practices do you believe are most critical for starbucks to maintain the coffee experience and customer service it's known for as the company expands in the United States and abroad? Solution 1.Starbucks believes that the key to company success is its employees, called partners. 2. At starbucks the value-and-treat-employees-right approach is part of the company culture. 3. One of the company’s six guiding principles is “to provide a great work environment and treat each other with respect and dignity.” 4.As a result of the important role of starbucks’ paartners, the company emphasizes selecting the right new employees, training them ,and rewarding and retaining employees with above-minimum salaries. 5.Job fairs,in-store advertisements,a cpmpany Web site,and employee referrals are used to recruit new employees. 6.Managers are provided with interview guidelines that are used to question job candidates to determine whether they have the skills and behaviors necessary for the position. 7.Although 85 percent of its employees are part-time, they are still eligible for full-time benefits if they work 240 hours a quarter. 8.Less than 30 percent of part-time workers in the United States receive health care, paid sick leave, or eligibility for bonuses or stock options. 9. Starbucks provides all employees and their same-sex or opposite-sex partners comprehensive health......

Words: 2324 - Pages: 10

The Emergence of Starbuck's Smoothies

...Biancka Jimenez Dr. Philip Gonsher MKT 324 – 11/9/10 The Emergence of Starbuck’s Vivanno In 1971, Jerry Baldwin, Zev Siegl and Gordon Bowker opened the first Starbucks in Seattle Washington. The venture began as a single store selling high-quality coffee beans and coffee-making equipment. A few years later, Howard Schultz joined the company and introduced the concept of selling beverages along with selling coffee beans. Although this idea did not sit well with the original owners, today Starbucks Coffee is a well-known coffee shop with over 17,000 stores in 50 countries. Despite its original focus of selling coffee-beans, Starbucks has expanded its offerings to include pre-made coffee, tea, bakery goods and other grocery items. A Starbucks customer was historically a busy professional seeking a premium coffee-based concoction made to their exact specifications. A standard “Cup of Joe” was replaced with the 30 second double-caramel skim half-caf macchiato. Patrons used a jargon that soon became synonymous with the Starbucks brand. Starbucks was not only selling what was listed on their menu: They were selling an atmosphere of taking part in the Starbucks experience and for some people a certain type of lifestyle. Although this demographic still frequents Starbucks, the recent recession has pushed Starbucks to begin looking into expanding their customer base. Starbucks is trying to find a way to convince people to spend their hard earned money on a luxury......

Words: 2433 - Pages: 10

Starbuck's Strategy and Internal Initiatives to Return to Profitable Growth

...on advertising, preferring instead to build the brand cup by cup with customers and depend on word of mouth and the appeal of its storefronts. Advertising expenditures were $126.3 million in fiscal 2009, versus $129.0 million in fiscal 2008, $103.5 million in 2007, and $107.5 million in 2006. Starbucks stepped up advertising efforts in 2008 to combat the strategic initiatives of McDonald’s and several other fast-food chains to begin offering premium coffees and coffee drinks at prices below those charged by Starbucks. In 2009, McDonald’s reportedly spent more than $100 million on television, print, radio, billboard, and online ads promoting its new line of McCafé coffee drinks. Starbucks countered with the Exhibit 6 Performance of Starbuck’s Consumer Products Group, Fiscal Years 2007–2009 Fiscal Year Consumer Product Group Operations Licensing revenues Foodservice revenues Total revenues Operating income Operating income as a percent of total revenues Source: Starbucks, 2009 10-K report, p. 76. 2009 $427.2 322.4 $749.6 $296.3 39.5% 2008 $392.6 355.0 $747.6 $279.2 37.3% 2007 $366.3 326.1 $692.4 $248.9 35.9% Case 23 Starbucks’ Strategy and Internal Initiatives to Return to Profitable Growth C-353 biggest advertising campaign the company had ever undertaken.25 Vertical Integration Howard Schultz saw Starbucks as having a unique strategy compared to the strategies pursued by its many coffeehouse competitors. He observed: People sometimes fail to......

Words: 22517 - Pages: 91

Environmental Analysis

...Running head: ENVIRONMENTAL ANALYSIS Environmental Analysis Allmise Vertinord University of Phoenix July 16, 2012 Environmental Analysis Macroeconomic Forecast The importance of economic indicators to the strategic planning process in any organization is the ability to benchmark economic conditions that contribute to improve profitability, business growth and market size. Starbucks strategy is also expanding market in globally to provide high quality coffee in convenient and visibility locations. They are continuing to innovate and extend the business with imaginative new ready-to-drink beverages and expanded packaged coffee offerings (Starbucks Financial release, 2007). Starbucks Corporation has established by purchasing high quality coffee beans and sells the customers along with a variety a specialty drinks and food that has met with an ever-increasing amount of success. Starbucks have succeeded several economic factors as well as price elasticity of demand. Price elasticity of demand can be determined by the percentage change in the quantity demanded with the percentage change in price. They should consider household income that people are willing to spend more on food and beverages when household income increases. Starbucks innovation in joint ventures has opened new markets and opportunities increasing product use among different demographics. Starbucks has proven to be highly innovative in business culture that offers prepaid cards, priced from $5 to $500. Joint......

Words: 3030 - Pages: 13