Starbuck
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  • 1. The History of Starbucks 1971 1982 Gordon Bowker Zev Siegel Jerry Baldwin Howard Schultz II Giornale 1985 1987
  • 2. Coffee / Coffee house industry
  • 3. NIDA
  • 4. 1. What are the attractive and unattractive feature of the specialty coffee/coffee house industry? Attractive • Opportunity - Market growth • Gathering places • Alternative to drink
  • 5. Unattractive • Excessive competition • Regulate coffee houses • The cost of coffee beans
  • 6. 2. What are Starbucks’ sources of competitive advantage and are they sustainable? 7-S : Strategy • Make a powerful about product ‘ s quality • Pampering employees “ Schultz believes that happy employees are the key to competitiveness and growth.” He said “ I want our employees to know we value them” • Developing relationship with suppliers and customers • Brand loyalty • Capital and technology • Atmostphere • Location
  • 7. 7-S : Structure • avoid the overlap problem 7-S : System • Efficiency of selection system and storage system
  • 8. 7-S : Shared value • Employee ownership 7-S : Style • Slow growth policy
  • 9. 7-S : Staff • Empowering corporate culture • Employee turnover 7-S : Skill • Recruitment and training • Service
  • 10. STARBUCKS : Mission Statement
  • 11. STARBUCKS : A New Coffee Vision
  • 12. STARBUCKS : GOAL Short-term goal Open 1,500 locations in 2005 (note: Starbucks does not franchise). Long-term goal 30,000 Locations within year 2015. To be as recognizable a brand as Coke.
  • 13. STARBUCKS : Corporate Strategy Howard Schultz has 4 companies as Role Models Service & Training Highly Growth Employee ownership Social sharing
  • 14. STARBUCKS : Corporate Strategy Securing the Finest Raw Material High Quality ARABICA, Narino Supremo , Fair Trade, Vertical Integration The STARBUCKS Experience We re not only just selling a cup of coffee, We re provide an Experience Building a Unique Culture The Happy employees are the key to competitiveness and growth Slow-Growth but Intensively No franchise, Mail order expansion, Foreign Partner : Starbucks Way Leveraging the Brand Multiple Channels of Distribution, Brand Extensions
  • 15. STARBUCKS WAY : International Affair
  • 16. STARBUCKS : SWOT Analysis STRENGTH Global presence, Strong Brand A disciplined innovator Increase in revenues and profits Clustering of company units
  • 17. STARBUCKS : SWOT Analysis WEAKNESSES Reliance on US market (75% of Income) Reliance in beverage innovation (Just started to extension) Lower returns on equity than peers Problem in some international operations
  • 18. STARBUCKS : SWOT Analysis OPPORTUNITIES Growth in coffee market New Product Market expansion: Asia growth potential Decreasing of carbonates and alcoholics drink No major competitor in retail beverage segment
  • 19. STARBUCKS : SWOT Analysis THREATS Volatile coffee markets Rising dairy costs Slowing US retail sales, drop of US coffee drinker Competition CEO (Smith) retiring in 2005
  • 20. STARBUCKS : SWOT Analysis STRENGTH WEAKNESSES Global presence, Strong Brand Reliance on US market (75% of A disciplined innovator Income) Reliance in beverage innovation Increase in revenues and profits (Just started to extension) Clustering of company units Higher cost in employee wages Strong in coffee supply chain Lower returns on equity than peers Problem in some international operations OPPORTUNITIES THREATS Growth in coffee market Volatile coffee markets New Product Rising dairy costs Market expansion: Asia growth potential Slowing US retail sales, drop of US coffee drinker Decreasing of carbonates and alcoholics Competition No major competitor in retail beverage CEO retiring in 2005 Only 1% of US pop. has tried Starbucks
  • 21. 3. How will Starbucks keep its marketshare, given the rapid entry of new competitors? Try to do follow the corporate strategy that can make Starbucks be a fastest growing. Securing the Finest Raw Material The STARBUCKS Experience Building a Unique Culture Slow-Growth but Intensively Leveraging the Brand Add some issue about International Expansion and Diversify some new product.
  • 22. 3. How will Starbucks keep its marketshare, given the rapid entry of new competitors? Work to make foreign operations profitable as quickly as possible. Continue to pursue rapid expansion of Starbucks stores in the U.S. Continue to pursue the opening of Starbucks stores in foreign countries using both licensing and company-owned and - operated stores. Look at making more acquisitions of coffee-house chains as a way of entering foreign country markets. Experiment with bigger Starbucks stores having a bigger menu-offering than just coffee and pastries—sit-down meals to attract lunch and dinner traffic.
  • 23. 4. How can Starbucks have a slow-growth policy and yet be one of the fastest growing company? Slow-growth policy but intensively to expansion No Franchise : Owner stores Mail Order Expansion Profitability in All Locations Foreign Partner : Starbuck Way Reliability in Quality and Service Customer Satisfactions International Affair : Starbucks Way
  • 24. 4. How can Starbucks have a slow-growth policy and yet be one of the fastest growing company? Starbucks Location 1000 900 800 676 ? 700 600 425 500 400 272 300 NOW 165 116 200 84 65 33 100 0 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
  • 25. 4. How can Starbucks have a slow-growth policy and yet be one of the fastest growing company? Starbucks Location 8,648 10000 9000 6,850 8000 5,688 7000 4,709 6000 5000 3,501 4000 2,135 1,886 3000 1,412 1,015 2000 676 425 272 165 116 1000 65 84 33 0 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
  • 26. 5. What are the advantages and disadvantages of Starbucks’degree of vertical integration and channel expansion ? Advantages of vertical integration Product quality s control 1. Good relationship with Supplier / Coffee bean Farmer 2. Control production / Control Roasting
  • 27. 5. What are the advantages and disadvantages of Starbucks’degree of vertical integration and channel expansion ? Advantages of vertical integration Service Quality s Control 1. Employee Feeling : Business s partner 2. Benefits programs 3. Recommendation :Product s choosing, Coffee bean, Production, How to do by yourself.
  • 28. 5. What are the advantages and disadvantages of Starbucks’degree of vertical integration and channel expansion ? Advantages of vertical integration New Standard
  • 29. 5. What are the advantages and disadvantages of Starbucks’degree of vertical integration and channel expansion ? Disadvantages of vertical integration Product quality s control 1. Cost, Expense 2. Time 3. Employee managing 4. The pressure to other saler and farmer Service Quality s Control 1. Cost, Expense 2. Time for training
  • 30. 5. What are the advantages and disadvantages of Starbucks’degree of vertical integration and channel expansion ? Advantages of channel integration Expansion to foreign country (Starbucks Coffee Internal Inc.) 1. Selling for local food 2. Proper Decorate for local Starbucks retailer and architecture
  • 31. 5. What are the advantages and disadvantages of Starbucks’degree of vertical integration and channel expansion ? 3. Method to choose the Partnership & Country Method to choose the location for new starbucks shop Alliance with other company / business
  • 32. 5. What are the advantages and disadvantages of Starbucks’degree of vertical integration and channel expansion ? Alliance with other company / business smith brother
  • 33. 5. What are the advantages and disadvantages of Starbucks’degree of vertical integration and channel expansion ? Expand product line 1. Frappuccino Group Frappuccino blended coffee Frappuccino blended cream Frappuccino blended tea
  • 34. 5. What are the advantages and disadvantages of Starbucks’degree of vertical integration and channel expansion ? Expand product line 2. Tea Line 3. Use the famous local law material in foreign country retail
  • 35. 5. What are the advantages and disadvantages of Starbucks’degree of vertical integration and channel expansion ? High – Speed Wireless internet Service
  • 36. 5. What are the advantages and disadvantages of Starbucks’degree of vertical integration and channel expansion ? Disadvantages of channel integration The Risk (from Expansion to foreign country ) 1. Service Quality 2. Brand Royalty , Attribute of Starbucks shop 3. Low quality Partnership 4. scramble with the customer group Alliance with other company / business 1. Decision Limited 2. Quality of Product / Service
  • 37. 5. What are the advantages and disadvantages of Starbucks’degree of vertical integration and channel expansion ? klDisadvantages of channel integration Expand product line 1. Attribute of Starbucks Product 2. Product’s Quality : Use the famous local law material in foreign country retail
  • 38. 6. What should CEO do? 1. Expansion to Global Channel 2. Launch New Product Continuously 3. Expansion Production Base to other continent
  • 39. 6. What should CEO do? 4. Increasing Relationship with customer 5. Built high – Standard to control quality all of Starbucks shop 6. Expansion Product to Dinner food / Main food 7. Built the knowledge, culture, vision to New CEO
  • 40. Thank you for interested in our Starbucks