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Starbucks

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  • 1. STARBUCKS Sherin varghese
  • 2. INTRODUCTION • Starbucks Corporation is an American global coffee company and coffeehouse chain based in Seattle, Washington. • Starbucks is the largest coffeehouse company in the world, with 20,891 stores in 62 countries, including 13,279 in the United States, 1,324 in Canada, 989 in Japan, 851 in the People's Republic of China, 806 in the United Kingdom, 556 in South Korea, 377 in Mexico, 291 in
  • 3. • Starbucks locations serve hot and cold beverages, whole-bean coffee, microground instant coffee, fullleaf teas, pastries, and snacks. Most stores also sell packaged food items, hot and cold sandwiches, and items such as mugs and tumblers. • Starbucks Evenings locations also offer a variety of beers, wines, and appetizers after 4pm. Through the Starbucks Entertainment division and Hear Music brand, the company also markets
  • 4. • From Starbucks' founding in 1971 as a Seattle coffee bean roaster and retailer, the company has expanded rapidly. Since 1987, Starbucks has opened on average two new stores every day. • Starbucks had been profitable as a local company in Seattle in the early 1980s but lost money on its late 1980s expansion into the Midwest and British Columbia. Its fortunes did not reverse until 1990 when it registered a small profit. By the time it expanded into California in 1991 it had become trendy. • The first store outside the United States or Canada opened in the mid-1990s, and overseas stores now constitute almost one
  • 5. The Starbucks Center, Seattl e. The company HQ, in the old Sears, Roebu ck and Co. catalog
  • 6. CURRENT SCENARIO • Starbucks is the largest coffeehouse company in the world, with 17,009 stores in 50 countries, including over 11,000 in the United States, over 1000 in Canada, and over 700 in the UK. • Starbucks sells drip brewed coffee, espresso-based hot drinks, other hot and cold drinks, coffee beans, salads, hot and cold sandwiches
  • 7. • Through the Starbucks entertainment division and hear music brand, the company also markets books, music and film. Starbucks posted earnings of 399.3 million or $0.37 EPS, up 86% compared to $199.4 million from same quarter last year. • This figure beat analyst estimates of $0.32 EPS. Sales also rose 17% to
  • 8. REVENUE GROWTH OF STARBUCKS • High tariff affects Starbucks production. Ability to sourcing best coffee beans . ECONOMICAL- Higher exchange rate -> Most of suppliers of Starbucks are external -> result=Incurring higher cost -> Coffee making is being expensive Way-out: extra cost to consumer?? Or making less profit?? • Income distribution of consumer : After the economic crisis, 2007 unemployment figures rose. People who were able to
  • 9. • Changing taste —USA is consuming more specialty coffee—import of 1.3 billion in 2010 India ,China-people prefer tea. So difficulty in implementation of strategyAmericanization in developing countries. Health consciousness- Need to introduce new healthy alternatives. North Americans are replacing alcohol with coffee Coffee bars— a place for meeting , a place of recreation. • Starbucks for promoting band globally— using social networking sites.
  • 10. SWOT ANALYSIS • Strenghts : Brand image Strategy to capture key locations and opening stores Roasting technology Valued and motivated partners – employees. • Weakness : Aggressive expansion without proper infrastructure: Is Starbucks there?? Ans : No Result : Put a Starbucks there. Question arises -> Quality vs Volume Starbucks has not focused on its product differentiation objectives Problem in distribution channel: Starbucks has charged that Kraft's alleged neglect and mismanagement of the business -- which brings in about $500 million in annual sales. The world's biggest coffee chain
  • 11. • Opportunities : • • • • • • • • • • Expansion into retail operations Technological advances New distribution channels (delivery) New products Distribution agreements Brand extension Emerging international markets Continued domestic expansion/domination of segment. Large market; appeals to adults, teens, and has kid friendly products as well.
  • 12. • Threats : • Increased competition from coffee shops and others (restaurants, street carts, supermarkets) • US market saturation • Coffee price volatility in developing countries • Negative publicity from poorly treated farmers in supplying countries • Consumer trends toward more healthy ways and away from caffeine • Fragile state of worldwide production of specialty coffees • Alienation of younger, domestic market segments • Corporate behemoth image • Cultural and Political issues in foreign • countries .
  • 13. COMPETENCIES OF STARBUCKS • • • • • • Roasting technology Valve technology Value and motivated partners Real estate approach Brand image Quality Efficient supply chain management system.
  • 14. Marketing strategy • Marketing strategy The global economy continues its recovery, Starbucks is planning to open an average of more than one store each day. ACQUISITION : April 2003, Starbucks completed the purchase of Seattle's best coffee and Torrefazione Italia from AFC Enterprises 1998-Tazo tea company ; 1999-Hear music; 2008-Clover. • United Airlines Nordstorm Barnes and Noble book store Pepsico Pricecostco Red
  • 15. CONCLUSION • Starbucks aggressive growth strategy has made it difficult to deliver consistently high quality products and superior customer service worldwide. Starbucks needs to refocus on the product differentiation strategy rather than expanding. Market