Starbucks Digital Music Case Analysis

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A practice case analysis on Starbucks Digital Music.

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Starbucks Digital Music Case Analysis

  1. 1. STARBUCKS<br />ENTERTAINMENT<br />Venkat Rao, Melanie Stambaugh, Jessica Hendrawidjaja, Kyle Bartlow<br />
  2. 2. OBJECTIVE<br />GOAL<br />Position the Starbucks Entertainment in the global market<br /> NPV = $3.663 Million <br />
  3. 3. OUTLINE<br />
  4. 4. SITUATION – Starbucks Company<br />Threat<br />Strength<br /><ul><li>Slowed US Sales
  5. 5. Cheaper competitors
  6. 6. Coffee focus</li></ul>Leader of Coffee<br />Leader of Culture<br />Strong Brand<br />Weakness<br />Opportunities<br />Over saturation<br />Interest from global market<br />STARBUCKSCOFFEE<br />
  7. 7. SITUATION – Starbucks Entertainment<br />Threat<br />Strength<br /><ul><li>Successful in US
  8. 8. Have relationship with artists
  9. 9. Large and established distribution network through retail stores
  10. 10. Technology “cheapens” music
  11. 11. Negotiations of royalties
  12. 12. Competitors</li></ul>Discounted of prices of mainstream artists<br />Opportunities<br /><ul><li>3 types of products-global appeal, locally relevant, local artists
  13. 13. Digital Music – less inventory cost, more retail space
  14. 14. More time in the stores-customer experience, higher coffee sales</li></ul>Weakness<br /><ul><li>Localization of music preferences abroad
  15. 15. Infrastructure for downloads
  16. 16. Buying song via iTunes doesn’t ensure entire album purchase</li></ul>STARBUCKSCOFFEE<br />
  17. 17. POTENTIAL STRATEGIES<br />MINIMAL<br />Music Strategy<br />MODERATEMusic Strategy<br />COMPREHENSIVEMusic Strategy<br />STARBUCKSCOFFEE<br />
  18. 18. POTENTIAL STRATEGIES<br />COMPREHENSIVEMusic Strategy<br />STARBUCKSCOFFEE<br />
  19. 19. POTENTIAL STRATEGIES<br />MINIMALMusic Strategy<br />STARBUCKSCOFFEE<br />
  20. 20. POTENTIAL STRATEGIES<br />Starbucks Music on the Move<br />Music addition to MyStarbucks Phone Application<br />Enhance Starbucks Locations<br /><ul><li>Interactive Music Display
  21. 21. Interactive “like/dislike” option to personalize music preferences</li></ul>MODERATEMusic Strategy<br />STARBUCKSCOFFEE<br />
  22. 22. POTENTIAL STRATEGIES<br />STARBUCKSCOFFEE<br />
  23. 23. MODERATE STRATEGY<br />Interactive Display<br /><ul><li>Shows “Now Playing”
  24. 24. Shows “Recently Played”
  25. 25. “Like” & “Dislike” Buttons
  26. 26. QR picture to facilitate mobile purchasing
  27. 27. Purchase option via Phone App</li></ul>STARBUCKSCOFFEE<br />
  28. 28. MODERATE STRATEGY<br />Starbucks Wi-Fi<br /><ul><li>Music link on Starbucks Homepage
  29. 29. Shows “Now Playing”
  30. 30. “Like” & “Dislike” option
  31. 31. Artist Recommendations
  32. 32. Social Media Connection</li></ul>STARBUCKSCOFFEE<br />
  33. 33. MODERATE STRATEGY<br />Phone Application<br /><ul><li>Addition to MyStarbucks App
  34. 34. Ability to Purchase Music
  35. 35. Listen to previously downloaded Starbucks artists</li></ul>STARBUCKSCOFFEE<br />
  36. 36. COUNTRY ANALYSIS<br />Sales<br />Piracy<br />Download<br />WiFi Capability<br />3G Subscribers<br />Download Access<br />STARBUCKSCOFFEE<br />
  37. 37. POTENTIAL COUNTRIES<br />STARBUCKSCOFFEE<br />
  38. 38. COUNTRY SELECTION<br />STARBUCKSCOFFEE<br />
  39. 39. JAPAN - Overview<br />STARBUCKSCOFFEE<br />
  40. 40. JAPAN – Customer Profile<br />Hiro Tanaka<br /><ul><li>Hiro yearns for a relaxing environment between work and home
  41. 41. He values premium/high quality products including the food he eats and beverages he drinks</li></ul>Music Mix<br />Focus on local taste<br />STARBUCKSCOFFEE<br />
  42. 42. MARKETING PLAN - Japan<br />STARBUCKSCOFFEE<br />
  43. 43. HR STAFFING PLAN - Japan<br />STARBUCKSCOFFEE<br />
  44. 44. UNITED KINGDOM - Overview<br />STARBUCKSCOFFEE<br />
  45. 45. U.K. – Customer Profile<br />Jane Hughes<br /><ul><li>Jane yearns for a relaxing environment between school and home
  46. 46. She values a good cup of coffee and is very particular on how it should be prepared</li></ul>Music Mix<br />High focus on individualism<br />STARBUCKSCOFFEE<br />
  47. 47. MARKETING PLAN – U.K.<br />STARBUCKSCOFFEE<br />
  48. 48. HR STAFFING PLAN – U.K.<br />STARBUCKSCOFFEE<br />
  49. 49. FINANCIAL ASSUMPTIONS<br />Launch Progression<br /><ul><li> Year 1: 200 stores total in each country
  50. 50. Year 2: 300 stores total in each country
  51. 51. Year 3: 500 stores total in each country
  52. 52. Year 4: All stores in each country
  53. 53. Year 5: All stores in each country</li></ul>STARBUCKSCOFFEE<br />
  54. 54. FINANCIAL PROJECTIONS<br />NPV = $3.663 Million IRR = 290%<br />STARBUCKSCOFFEE<br />
  55. 55. SENSITIVITY ANALYSIS<br />STARBUCKSCOFFEE<br />
  56. 56. SENSITIVITY ANALYSIS<br />STARBUCKSCOFFEE<br />
  57. 57. TIMELINE<br />Evaluate Strategy<br />Physical CD Consideration<br />Physical CD Consideration<br />Physical CD Consideration<br />Physical CD Consideration<br />STARBUCKSCOFFEE<br />
  58. 58. THANK YOU<br />

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