Strategic Management

1. Group 6
Anusha Kurakula
Govind Narayan Roy
Manoj Sivadasan
Rahul Prabhu
Viskash Kumar

2. Brief History
• Started in 1971 – Seattle, Washington
• Founder: Jerry Baldwin
• The idea of creating a café community
environment was inspired from Italy and
implemented by the CEO Howard Schultz.

3. • Expansion across United States and
international markets Japan and Singapore.
- In Flight offering– United Airlines
- Premium Tea: Tazo Tea Company
- Online purchasing of coffee
- Distributing whole bean and ground coffee to
supermarkets
- Premium coffee ice cream with Dreyer’s

4. Current Status
• 23,768 stores (as of November 2016) in more 50
countries.
“Our mission is to inspire and nurture the human
spirit – one person, one cup, and one
neighborhood at a time”
• Core Competencies: High quality coffee and
products at accessible locations and affordable
prices
• World’s largest buyer of Fair Trade CertifiedTM
coffee.

5. • Realized the sales slippage before competitors
during the recession and acted upon it.
• New Growth Strategy – More Revenue with
lower costs.
• Shut down 900 stores and relieved 34,000
jobs.
• Revamped the brand.
• Share value increased from $4 to $24 post
revamping

8. Stars
Question
Marks
Cash
Cows
Dogs
BCG Matrix
International Outlets
Coffees, Lattes,
Frappacinos
Pre Bottled
Frappacinos
VIA instant Coffee;
Seattle’s Best

9. Porter’s Generic Competitive
Strategy

10. STRENGTHS
S1 – Brand Identity
S2 – Quality
S3 - Variety
S4 – Locations
S5 – Convenience
S6 – Store Ambience
S7 - Ethics
WEAKNESSES
W1 – Overexposure
W2 – Too many products
W3 – Risky investment in more
locations
OPPORTUNITIES
O1 – Customization
O2 – International Markets
O3 – On-the-Go Lifestyle
O4 - Partnerships
THREATS
T1 – Direct Comparison
T2 – Cheaper Alternatives
T3 - Recession
SWOT Analysis
3.9

11. Porter’s 5 forces

12. Value Curve

13. Four Action Framework
Create Raise Reduce Eliminate
-
Customization
- Online User
Experience
- Locations
- Variety

14. Conclusion
• Overall Starbucks has maintained a competitive
advantage with its quality, bistro-style coffee
choices to the masses.
• Need to focus on its core competencies and avoid
spreading themselves to thin.
• Create new value innovation by enhancing the
customer experience through online content to
stay ahead of competitors.
• Enhance the connections to their loyal customers
rather than developing new products.