Starbucks case study

9,080 views

Published on

Published in: Business, Technology
0 Comments
5 Likes
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total views
9,080
On SlideShare
0
From Embeds
0
Number of Embeds
10
Actions
Shares
0
Downloads
346
Comments
0
Likes
5
Embeds 0
No embeds

No notes for slide

Starbucks case study

  1. 1. STARBUCK<br />SHUBHADIP BISWAS<br />
  2. 2. HISTORY<br />Jerry Baldwin, Zev Siegl, and Gordon Bowker--FOUNDERs OF STARBUCK-1971<br />IT USED 2 BE A RETAILER<br />HOWARD SCHULTZ STARTED HIS CAREER AS A<br />SALESMAN IN SWEDISH KITCHENWARE<br />1982—HE BEGAN HIS JOURNEY WITH STARBUCK<br />1983-ON A BUSINESS TRIP TO MILAN—HE SAW AN EXPRESSO BAR WITH DIFFERENT CONCEPT<br />
  3. 3. HISTORY<br />HE LOVED IT----IT WAS A WARM COMMUNITY EXPERIENCE<br />HE PROPOSED THE IDEA ------BOARD OF DIRECTORS REJECTED IT<br />HE LEFT STARBUCK & OPENED HIS OWN COFFEE BAR COMPANY—II GIORNALLE<br />1984—HOWARD BOUGHT STARBULK<br />FROM THAT TIME TO NOW ON STARBULK IS MOST POPULAR COFFEE BRAND WORLDWIDE—FOR ITS FAMOUS FRESH BREWED COFFEE<br />
  4. 4. COFFEE INDUSTRY ANALYSIS<br />BASIC COFFEE<br />SPECIALTY COFFEE---HIGHER QUALITY COFFEE<br />GROWING IN 7% ANNUAL GROWTH RATE<br />
  5. 5. COFFEE INDUSTRY ANALYSIS<br />COFFEE SHOPS MAKE UP THE FASTEST GROWING PART OF THE RESTAURANT BUSINESS, CHECKING IN WITH A 7% ANNUAL GROWTH RATE!<br />WORLD COFFEE PRODUCTION IS ESTIMATED AT 110 - 120 MILLION BAGS PER YEAR<br />14 BILLION ESPRESSO COFFEES ARE CONSUMED EACH YEAR IN ITALY, REACHING OVER 200,000 COFFEE BARS, AND STILL GROWING<br />AMERICANS CONSUME 400 MILLION CUPS OF COFFEE PER DAY, OR EQUIVALENT TO 146,000,000,000 (146 BILLION) CUPS OF COFFEE PER YEAR; MAKING THE UNITED STATES THE LEADING CONSUMER OF COFFEE IN THE WORLD.<br />
  6. 6. COFFEE INDUSTRY ANALYSIS<br />THE NATIONAL COFFEE ASSOCIATION ESTIMATES THAT THE US COFFEE MARKET WILL REACH $29 BILLION IN 2011<br />STARBUCKS ALREADY HAS A PRESENCE IN CHINA, BUT THE INDIAN MARKET REMAINS LARGELY UNTAPPED. RECENTLY, STARBUCKS ENTERED INTO A PARTNERSHIP WITH TATA COFFEE THE NATION'S BIGGEST COFFEE PRODUCE TO HELP TAP THE COUNTRY WHERE COFFEE CONSUMPTION HAS INCREASED BY 89% IN THE PAST 13 YEARS.<br />CURRENTLY ONLY 22% OF URBAN YOUTH GO TO CAFES, AND ACCORDING TO CAFE COFFEE DAY EXECUTIVES, THE INDIAN MARKET HAS THE POTENTIAL TO HOUSE UP TO 5,400 CAFES. CURRENTLY LESS THAN ONE-THIRD OF THOSE CAFES EXIST.<br />.<br />
  7. 7. CURRENT SCENARIO<br />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.<br />STARBUCKS SELLS DRIP BREWED COFFEE, ESPRESSO-BASED HOT DRINKS, OTHER HOT AND COLD DRINKS, COFFEE BEANS, SALADS, HOT AND COLD SANDWICHES AND PANINI, PASTRIES, SNACKS, AND ITEMS SUCH AS MUGS AND TUMBLERS.<br />SBUX.O<br />$36.72<br />-0.14-0.38%<br />
  8. 8. CURRENT SCENARIO<br />THROUGH THE STARBUCKS ENTERTAINMENT DIVISION AND HEAR MUSIC BRAND, THE COMPANY ALSO MARKETS BOOKS, MUSIC AND FILM.<br />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 2.8 BILLION AS COMPARABLE STORE SALES ADDED 8% IN DOMESTIC MARKETS.<br />
  9. 9. REVENUE GROWTH OF STARBUCK<br />
  10. 10. PESTEL ANALYSIS<br />POLITICAL-<br />HIGH TARIFF AFFECTS STARBUCK PRODUCTION,ABILITY TO SOURCING BEST COFFEE BEANS<br />ECONOMICAL-<br />1.HIGHER EXCHANGE RATE---MOST OF SUPPLIERS OF STARBUCK ARE EXTERNAL---RESULT=INCURRING HIGHER COST--<br />COFFE MAKING IS BEING EXPENSIVE <br />WAYOUT---EXTRA COST TO CONSUMER??<br />OR MAKING LESS PROFIT??<br />
  11. 11. PESTEL ANALYSIS<br />2.INCOME DISTRIBUTION OF CONSUMER—<br />AFTER THE ECONOMIC CRISIS,2007 UNEMPLOYMENT FIGURES ROSE.<br />PEOPLE WHO WERE ABLE TO CONSUME STARBUCK’S EXPENSIVE SPECIALTY COFFEE NOW SAW IT AS A LUXURY IN SOME LOCATION.<br />RESULT=SUDDEN DROP IN SALES VOLUME,2009<br />
  12. 12. PESTEL ANALYSIS<br />SOCIAL ISSUE-<br />1.CHANGING TASTE—USA IS CONSUMING MORE SPECIALTY COFFEE—IMPORT OF 1.3 BILLION IN 2010<br /> INDIA ,CHINA---PEOPLE PREFER COFFEE. SO DIFFICULTY IN IMPLEMENTATION OF STRATEGY-AMERICANISATION IN DEVELOPING COUNTRIES<br />2.HEALTH CONSCIOUSNESS-<br />NEED TO INTRODUCE NEW HEALTHY ALTERNATIVES<br />NORTH AMERICANS ARE REPLACING ALCHOHOL WITH COFFEE<br />3.COFFEE BARS—A PLACE FOR MEETING,A PLACE OF RECREATION<br />
  13. 13. PESTEL ANALYSIS<br />TECHONOLOGY—<br />STARBUCK FOR PROMOTING BAND GLOBALLY—<br />USING SOCIAL NETWORKING SITES<br />IMPLEMENTED NEW PHONE PAYMENT SYSTEM<br />STARBUCK CARD—ONLINE PAYMENT—IT ALSO HELPS TO INCREASE CUSTOMER LOYALITY<br />
  14. 14. PESTEL ANALYSIS<br />ENVIRONMENTAL-<br />COFFEE HARVES IS DEPENDENT ON WEATHER CONDITIONS,HEALTH OF COFFEE TREES,HARVESTING PRACTICES,DISEASE AND INFECTION CAUSED BY INSECTS<br />
  15. 15. OPPORTUNITIES AND THREAT--<br />OPPORTUNITIES---<br />ENTRY INTO NEW MARKETS<br />GROWTH IN COFFEE MARKET<br />THREATS—<br />COMPETITION WITH MCDONALD, CARIBOU COFFEE AND PEET'S COFFEE IN THE BROADER MARKET FOR SPECIALTY COFFEE. THEY ARE SELLING GOOD COFFEE FOR BETTER VALUE<br />PREVIOUSLY-SECOND CUP---GROWTH OF SECOND CUP WAS A HEADACHE.<br />
  16. 16. INTERNAL ANALYSISSTRENGTH AND WEAKNESS--<br />STRENGHTH—<br />1.BRAND IMAGE<br />2.STRATEGY TO CAPTURE KEY LOCATIONS<br />AND OPENING STORES<br />3.ROASTING TECHNOLOGY<br />4.VALUED AND MOTIVATED PARTNERS[EMPLYEES]<br />
  17. 17. INTERNAL ANALYSISSTRENGTH AND WEAKNESS--<br />WEAKNESS—<br />1.AGGRESSIVE EXPANSION WITHOUT PROPER INFRASTRUCTURE– IS STARBUCK THERE??<br />ANS—NO<br />RESULT=PUT A STARBUCK THERE.<br />QUESTION ARISES-----QUALITY VS VOLUME<br />2.STARBUCK HAS NOT FOCUSED ON ITS PRODUCT DIFFERENTIATION OBJECTIVES<br />3.PROBLEM IN DISTRIBUTION CHANNEL-<br />STARBUCKS HAS CHARGED THAT KRAFT'S ALLEGED NEGLECT AND MISMANAGEMENT OF THE BUSINESS -- WHICH BRINGS IN ABOUT $500 MILLION IN ANNUAL SALES.<br />THE WORLD'S BIGGEST COFFEE CHAIN WANTS TO END THE PARTNERSHIP ON MARCH 1 AND REPLACE KRAFT WITH PRIVATELY HELD ACOSTA INC.<br />
  18. 18. largest publicly traded food service competitors-----fy 2009<br />
  19. 19. COMPETENCIES OF STARBUCK--<br />ROASTING TECHNOLOGY<br />VALVE TECHNOLOGY<br />VALUE AND MOTIVATED PARTNERS<br />REAL ESTATE APPROACH<br />BAND IMAGE<br />QUALITY<br />EFFICIENT SUPPLY CHAIN SYSTEM<br />
  20. 20. CORE COMPETENCIES<br />ROASTING TECHNOLOGY<br />BRAND IMAGE<br />EFFICIENT PARTNERS<br />
  21. 21. Marketing strategy<br />THE GLOBAL ECONOMY CONTINUES ITS RECOVERY, STARBUCKS IS PLANNING TO OPEN AN AVERAGE OF MORE THAN ONE STORE EACH DAY.<br />ACQUISITION-<br /> APRIL 2003, STARBUCKS COMPLETED THE PURCHASE OF SEATTLE'S BEST COFFEE AND TORREFAZIONE ITALIA FROM AFC ENTERPRISES<br /> 2006---ACQUISITION OF RIVAL BRAND—DIEDRICH COFFEE<br />PARTNERSHIP-<br />UNITED AIRLINES<br />NORDSTORM<br />BARNES AND NOBLE BOOK STORE<br />
  22. 22. Marketing strategy<br />PEPSICO<br />PRICECOSTCO<br />RED HOOK BREWERIES<br />DREYER’S ICE CREAM<br />ARAMARK<br />APPLE<br />TATA COFFEE<br />Acosta Inc<br />
  23. 23. STARBUCK STRATEGY<br />
  24. 24. RESULT OF SWOT ANALYSIS--<br />STARBUCK’S AGGRESSIVE GROWTH STRATEGY<br />HAS MADE IT DIFFICULT TO DELIVER CONSISTENTLY HIGH QUALITY PRODUCTS AND SUPERIOR CUSTOMER SERVICE WORLDWIDE.<br />STARBUCK NEED TO REFOCUS ON THE PRODUCT DIFFERENTIATION STRATEGY RATHER THAN EXPANDING.<br />MARKET PENETRATION WILL NOT BE A PROBLEM IF STARBUCK CREATES PROPER INFRASTRACTURE GLOBALLY.<br />

×