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Starbucks Strategy
 

Starbucks Strategy

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    Starbucks Strategy Starbucks Strategy Presentation Transcript

    • Starbucksstrategy
      BOIN Anne-cécile
      DOMAIN Marine
      PIVA Benedetta
    • Starbucks is one of the most important companies in the specialty coffee industry
      This industry is the most rapidly growing segment of coffee industry
      The competitive environment
      its market share increased from 1% to 20% in the last 25 years
      14/01/2011
      Strategic Management Boin Domain Piva
    • Competitive rivalry. Companies of varying sizes and different exposures to specialty coffee such as:
      two of the largest companies in the fast food industry who have recently entered the specialty coffee industry:
      FiveForcesAnalysis
      14/01/2011
      Strategic Management Boin Domain Piva
    • Potentialentrants. There are manybarrierforthem:
      even though the specialty coffee industry does not require a large capital, there are many barriers to entry so it is difficult for new companies to enter the market
      however, the industry is not well-defined and incumbents have always to pay attention
      FiveForcesAnalysis
      • economiesof scale;
      • new entrants have no access to the most important distribution channels;
      • incumbents have proprietary technology for the specialty coffee’s quality and production;
      • incumbents have develop customers’ loyalty
      14/01/2011
      Strategic Management Boin Domain Piva
    • Substitutes. The threat of substitutes is relatively low because coffee is an icon and an everyday good, so when people want coffee, that is what they consume
      Suppliers. Starbucks has a good bargaining power on its suppliers due to its large size but it doesn’t abuse this power. Starbucks is completely dependent upon its suppliers and it always demands a very high quality of bean as well as environmental policies, e.g. energy conservation and farming methods, and employee benefits
      The company treats its suppliers as partners
      Dairy and paper product suppliers are not a threat. Starbucks sources from multiple suppliers and looks for vendors who have sustainability purposes
      FiveForcesAnalysis
      14/01/2011
      Strategic Management Boin Domain Piva
    • Buyers. The principal buyers in the specialty coffee industry are individual consumers
      Starbucks has over 40 million consumers a week
      eighty percent of Starbucks’s revenue comes from customers who visit coffeehouses an average of 18 times per month: regular customers
      the threat of customers is low for Starbucks: it is unlikely that a customer integrates backward making coffee at home to replace coffeehouse products and experience
      FiveForcesAnalysis
      14/01/2011
      Strategic Management Boin Domain Piva
    • STRENGTHS
      The SWOT Analysis
      Brandimage
      Goodworkplace
      Goodrelationshipwith coffee suppliers
      Coffeehouses’ locations
      14/01/2011
      Strategic Management Boin Domain Piva
    • WEAKNESSES
      The SWOT Analysis
      Corporate image
      Overcrowding and cannibalism
      Expensive price
      14/01/2011
      Strategic Management Boin Domain Piva
    • OPPORTUNITIES
      THREATS
      The SWOT Analysis
      Expansion into European and Latin American markets
      Brand extension
      Distribution agreements
      Growthofcostof coffee beans
      Customers trend can change
      New competitors and disrupting innovations
      14/01/2011
      Strategic Management Boin Domain Piva
    • The vision:
      highqualitycoffee
      ecofriendlyand responsiblecompany
      Strategic direction:
      a rapidstore expansion
      large range of beverages
      strongrelationshipwithsuppliers
      Vision and strategic direction
      14/01/2011
      Strategic Management Boin Domain Piva
    • Buyout of competitors
      Marketpenetration: eco-friendlyproducts
      Marketdevelopment: responsible coffee shops
      Diversification: mugs, CD’s, …
      Outcomes
      14/01/2011
      Strategic Management Boin Domain Piva
    • The “thirdplace”
      Starbucks wants its coffeehouses to become the third place between home and work for its customers
      develop the quality of welcome and of service for the customers  employees’ training
      Be unique for customers
      welcoming events within the stores (degustation, groups playing soft music,…)
      14/01/2011
      Strategic Management Boin Domain Piva
    • Increaserevenues
      revenues would be increased thanks to higher prices. Those higher prices would be justified by the quality of the coffee, of the service and of the places (the experience)
      Remind about the quality
      Starbucks must put emphasis on the high quality of its coffee and its products in general
      refocus on the original idea that made this brand so famous
      Revenues and quality
      Customers are willingtopay high prices
      14/01/2011
      Strategic Management Boin Domain Piva
    • Expansionofcoffeehouses
      Starbucks would have to expand even more internationally and implement in location where they can find the kind of customers it is looking for
      It could for example open news shops in places of work, in airports, in students’ neighborhood or in cultural places such as cinemas or theatre
      14/01/2011
      Strategic Management Boin Domain Piva