• 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
• Starbucks locations serve hot and cold
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
• 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
• The first store outside the United States or
Canada opened in the mid-1990s, and
overseas stores now constitute almost one
HQ, in the old
ck and Co.
• 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
• 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
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
• Income distribution of consumer : After
the economic crisis, 2007 unemployment
figures rose. People who were able to
• 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
• Starbucks for promoting band globally—
using social networking sites.
• 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
• Opportunities :
Expansion into retail operations
New distribution channels (delivery)
Emerging international markets
Continued domestic expansion/domination
Large market; appeals to adults, teens, and
has kid friendly products as well.
• 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
• Consumer trends toward more healthy ways and
away from caffeine
• Fragile state of worldwide production of specialty
• Alienation of younger, domestic market segments
• Corporate behemoth image
• Cultural and Political issues in foreign
• countries .
COMPETENCIES OF STARBUCKS
Value and motivated partners
Real estate approach
Quality Efficient supply chain
• 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
• 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
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