What is Starbucks?

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Information regarding Starbucs. History etc.

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What is Starbucks?

  1. 1. Eda Buldur Serpil Çoban Tuba Kahraman Gökçe Özkuyumcu
  2. 2. Internal Analysis Starbucks Starbucks = 172.000 payrolls ? Obviously Not ! What is real story ?
  3. 3. Internal Analysis From Bush To Cup * Over 50% of coffee is grown on small farms
  4. 4. Internal Analysis Starbucks’ sources of coffee in the Coffee Belt Farms , Coops, Exporters, Importers &Brokers
  5. 5. Internal Analysis How Starbucks Purchase? 7 Fundemental principles for sustainable Coffee Environ. With Fair price (Premium price, premium coffee) With long term contracts Purchasing shade grown, certified & organic coffees Collaborating with coffee producers globally on coffee quality (Starbucks farmer support center in Costa Rica) * In FY2005, Starbucks paid an average price of $1.28 per pound which was 23% higher than the average New York “C” price.)
  6. 6. Internal Analysis How Starbucks Purchase? Providing funds & affordable credit for farmers Invest in Soc. Development Projects (Vaccination Campaign, Renovating homes, Building schools) * In FY2005, Starbucks provided $9.5M in loans to Calvert Foundation, Verde Ventures Fund, Ecologic Finance
  7. 7. Internal Analysis C.A.F.E. (Coffee And Farmers Equity Program C.A.F.E. Practices are Starbucks buying guidelines that reward suppliers. Prerequisites: High-quality coffee Economic transparency
  8. 8. Internal Analysis Facts About Value Chain Inbound Logistics Operations Marketing and Sales Service Procurement Technology/Development Human Resource Management Administration R& D
  9. 9. Internal Analysis Properties of Starbucks
  10. 10. Internal Analysis Properties of Starbucks
  11. 11. Internal Analysis Properties of Starbucks
  12. 12. Internal Analysis Intangible Assets Several awards which improves reputation & brand “The 100 Best Companies to Work For” “Ten Most Admired Companies in America” “100 Best Corporate Citizens” “Most Admired Company” “ Dow Jones Sustainability World Indexes”. 4th “World’s Most Influential Brands” “Best Global Brands”
  13. 13. Internal Analysis Core Competencies Employee value Lower turnover than the rest of the industry Happy workers make happy customers “The 100 Best Companies to Work For” — FORTUNE— 1998–2000, 2002–2008.” “We realize our people are the cornerstone of our success...” Howard Schultz
  14. 14. Internal Analysis Core Competencies Commitment to coffee quality and its sustainability CAFE practises , social programs & farmers support “third place” of customers make part of their daily lives
  15. 15. Internal Analysis Core Competencies Continuous Innovation Starbucks Hear Music™ “Now Playing” feature on the iTunes® in Stores Frappuccino® since 1995 Starbucks Roast™
  16. 16. Performance Appraisal Operating Segments United States International CPG (Global Consumer Products Group)
  17. 17. Performance Appraisal Financial Performance of Starbucks Corp. (NASDAQ: SBUX)
  18. 18. Performance Appraisal Sales Mix
  19. 19. Performance Appraisal Revenue Comp. & B.D.
  20. 20. Performance Appraisal # of Stores ( Co Op)
  21. 21. Performance Appraisal # of Stores ( Lic)
  22. 22. Performance Appraisal # of Stores Growth
  23. 23. Performance Appraisal Shareholder Info SBUX
  24. 24. Performance Appraisal Shareholder Info SBUX cont. •18,500 shareholders of record • Starbucks has never paid any dividends on its common stock
  25. 25. Performance Appraisal Earnings comparision
  26. 26. Performance Appraisal Revenue Growth
  27. 27. Performance Appraisal Income & Op. Margin
  28. 28. Performance Appraisal Earnings & Equity
  29. 29. Performance Appraisal Consolidated Earnings (US+INT.+CPG)
  30. 30. Performance Appraisal Liquidity and Capital Resources
  31. 31. Performance Appraisal Diedrich Coffee (Gloria jeans,Coffee World) Mission: We sell Great Coffees Founded in 1972, Diedrich Coffee, Inc. is a specialty coffee roaster, wholesaler and retailer Brands include Diedrich Coffee, Gloria Jean's, and Coffee People Have more than 110 retail locations, both company- operated and franchised, under these brands located in 25 states
  32. 32. Performance Appraisal Stock Price Comparision
  33. 33. Performance Appraisal Stock Price Comparision Graphical
  34. 34. Performance Appraisal Ratio Analysis Earnings per share growth CR=CA/CL QR=(CA-Inv)/CL DE=TD/TE * TTM Trailing Twelve month **MRQ Most Recent Quarter
  35. 35. Performance Appraisal Ratio Analysis CR=CA/CL QR=(CA-Inv)/CL DE=TD/TE
  36. 36. Review Of The Mission And Goals To inspire and nurture the human spirit— one person, one cup, and one neighbourhood at a time. Provide a great work environment and treat each other with respect and dignity. Embrace diversity as an essential component in the way we do business. Apply the highest standards of excellence to the purchasing, roasting and fresh delivery of our coffee. Develop enthusiastically satisfied customers all of the time. Contribute positively to our communities and our environment. Recognize that profitability is essential to our future success.
  37. 37. Strategy Formulation Corporate Level Strategies Concentrating on core customers without increasing number of stores (Pause- Proceed with Caution) Shifting focus from Store growth to driving traffic by identifying, listening and responding to their Core customers Repositioning and upgrading portfolio by investing in targeted initiatives Continuing to invest major and minor renovations( upgrading store design/adding new platforms) Increasing the amount of products sold to loyal customers advertising to core customers
  38. 38. Strategy Formulation Corporate Level Strategies Reduces the effects of global financial crisis Entering to new & developing markets (Horizontal Growth- Corporate Franchising) Reaching to a higher population Taking the advantage of increasing income per capita and peoples desire of spending with the help of brand reputation
  39. 39. Strategy Formulation Business Level Strategies Competitive Strategy -Introduce new products that create differentiation and desire Narrowing down the customers targeted Covering special expectations of core customers -Introduce state of the art espresso technology / Launch a new platform of best inclass brewed coffee, handcrafted by the cup Decrease the volume suppliers and began to concentrate the business with national vendors New/diversified products would cover their needs and increase loyalty (Ex, Over 90% drink both coffee and tea but portion of the purchasing tea volume is low, app.12%. They can Focus on TEA Builds on Core customers to sustain loyalty.
  40. 40. Strategy Formulation Business Level Strategies More focus on currently new products which get good feedbacks. (EX. “healthy breakfast”). It can be diversified and became a classic for Starbucks. Here is the increasing demand graphic of it
  41. 41. Strategy Formulation Functional (Operational) Strategies Improve faster line speed and improve consistent quality Reduce the partner turnover Decrease the operating cost Push Strategy -Developing new products which are new to core customers Supply chain optimization
  42. 42. Strategy Formulation Business Level Strategies Provide cards to make core customers ; it helps to create communication channels Provide value, Brand Ownable Provide membership systems that make customers feel more attached to the company or reward their loyalty
  43. 43. Strategic Choice Implementation Making the Structure to Match With The Strategies Aligned product innovation to achieve improved customer interaction Ergonomic Store design to achieve faster line speed Effective equipment deployments to achieve customer and partner satisfaction Core training & Efficient use of labor to reduce partner turnover Decentralization into profit or investment centers
  44. 44. Strategic Choice Implementation Making the Structure to Match With The Strategies Developing new products would be done in R&D department in cooperation wit marketing department. Stating most frequented day part and leverage the opportunity at lowest part leverage the opportunity in afternoon and evening
  45. 45. Strategic Control Feedback Control Checking each quarters numbers to if they match with objectives to increase core customers visits 20% over 2008 to reduce advertising costs by 10% over 2008 to increase profitability by %30 over 2008
  46. 46. Strategic Control Concurrent Control Checking that actions are correctly taken do the core customers have their cards? do core customers know what each card is for? do core customers think the cards worth having & using are core customers happy with new products do core customers feel more attached to the company?
  47. 47. Strategic Control Feedforward Control Checking if the situation is appropriate for applying strategies is the budget enough for operations? is any more advertising is needed? are distribution channels effective? are employees educated enough?

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