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case # 5: starbucks coffee company
- 4. Table of Contents • Introduction • Vision Statement • Mission Statement (1990-2008) • EFE matrix • IFE matrix • CPM matrix • SWOT matrix • SPACE matrix • IE matrix • GRAND STRATEGY matrix • BCG matrix • Action Plan & Recommendations Starbucks 07/31/2015
- 5. History Starbucks 07/31/2015 • First Starbucks opened in Seattle Washington • March 30, 1971 • Jerry Baldwin-English Teacher • Gordon Bowker-Writer • Zev Siegh – History Teacher
- 6. CONTINUE… • Entrepreneur Howard Schultz joined the company in 1982 • Director of Retail Operations and Marketing • Idea of selling beverages Starbucks 07/31/2011
- 7. CONTINUE… • April, 1984 first store to sell beverages was opened • Served 400 customers – over the 250 customer average at their best store • II Giornale Acquires Starbucks • Howard Schultz – Starbuck’s President and CEO Starbucks 10/31/2011
- 8. CONTINUE… • World's premier roaster and retailer of specialty coffee • 8,812 company-owned stores • 7,852 licensed stores in more than 50 countries Starbucks 10/31/2011
- 9. CONTINUE… • Annual sales of about $10 billion as of April 2010 • Sell : beverages, pastries, whole bean coffee, ground coffee, and coffee-related products Starbucks 07/31/2015
- 10. VISION STATEMENT To inspire and nurture the human spirit – one person, one cup and one neighborhood at a time. Starbucks 07/31/2015
- 11. Mission Statement 1990 – October 2008 • Establish Starbucks as the premier purveyor of the finest coffee in the world while maintaining our uncompromising principles as we grow. Starbucks 07/31/2015
- 14. Competition McDonalds Dunkin Donuts Second Cup New World Coffee Caribou Coffee Starbucks 07/31/2015
- 16. External Factors Evaluation (EFE Matrix) Weight Rating Weighted Score Opportunities International Markets .10 1 .10 Global expentipion .11 4 .44 Long-term Industry Growth .10 3 .30 New product mix .09 4 .36 Purchasing companies .10 1 .10 Strong financial support .12 4 .48 Threats Terrorist Attacks & Safety issue .11 3 .33 New entrants .09 4 .36 Government Regulations .10 3 .30 US market saturation .08 3 .24 TOTAL 1.00 3.01
- 17. INTERNAL FACROR EVALUATION Starbucks 07/31/2015
- 18. Internal Factor Evaluation (IFE Matrix) Weight Rating Weighted Score Strengths Innovation .11 4 .44 Global presence .12 4 .48 Profitability .06 3 .18 Brand Recognition .10 4 .40 Store ambience .12 4 .48 High market share and market growth .06 3 .18 Limited number of strong competitors .06 3 .18 High quality customers service .08 4 .32 Weaknesses High employee turnover .10 1 .10 High prices .06 2 .12 Over dependence on US markets .05 2 .10 Too many products .08 1 .08 TOTAL 1.00 3.06
- 19. COMPETITIVE PROFILE MATRIX Starbucks 07/31/2015
- 20. (CPM) Starbucks McDonalds Dunkin Donuts 3.072.763.201.00Total 0.2730.2730.1820.09Financial Position 0.3330.3330.3330.11Customer Service 0.3630.3630.4840.12Global Expansion 0.6840.5130.6840.17Customer Loyalty 0.4530.4530.4530.15Price Competitivenes 0.3630.3630.3630.12Product Variety 0.4230.2820.4230.14Advertising 0.2020.2020.3030.10Product Quality ScoreRatingScoreRatingScoreRatingWeightCritical Success Factor
- 21. COMPETITIVE PROFILE MATRIX CPM of Star Bucks is 3.20 which is higher than its competitors so they have competitive advantage.
- 23. SWOT Matrix Strengths – S 1) Profitability 2) Brand Recognition 3) Global Presence Weaknesses – W 1) Uneven worldwide distribution 2) Product Pricing 3) Overdependence on US markets Opportunities – O 1) Global Expansion 2) New Markets 3) Purchasing Companies SO Strategies 1) Re invest profit in new markets 2) Use its brand to sell new products 3) Expand global presence by purchasing companies WO Strategies 1) New markets will balance distribution 2) Lower prices for new products 3) Purchase companies to survive Threats – T 1) New entrants 2) US market saturation 3) Government Regulation ST Strategies 1) Offer better stakeholder value 2) Ensure a strong foundation 3) Grow according to the rules and regulations WT Strategies 1) Enter into new countries before competition 2) Lower prices in Asia
- 25. SPACE Matrix Internal Strategic Position External Strategic Position Financial Strength (FS) Rating Environmental Stability (ES) Rating Return on Investment Working Capital Net income Price Earning Ratio 5 6 6 4 Technological changes Rate of inflation Competitive pressure Demand Variability Price Range of Competing Service -3 -3 -2 -5 -1 FS average 5.25 ES average -2.80 Competitive Advantage (CA) Rating Industry Strength (IS) Rating Market Share Service quality Customer loyalty Competition’s capacity utilization -1 -2 -2 -1 Profit potential Growth potential Financial Stability Resource utilization 6 5 5 5 CA average -1.50 IS average 5.25 Conclusion:- Directional vector coordinates: X-axis -1.50 + 5.25 = 3.75 Y- axis 5.25 + (-2.80) = 2.45 Therefore, the Starbucks should pursue Aggressive Strategy.
- 26. +6 +6-6 -6 SPACE Matrix FS ES ISCA Conservative Aggressive CompetitiveDefensive (3.75, 2.45)
- 28. (IE) Internal & External Matrix IFE Total Weighted Scores (3.06) EFETotalWeightedScores(3.01) Strong 4.0 to 3.0 Average 2.99 to 2.0 Weak 1.99 to 1 High 3.0to4.0 GROW & BUILD Medium 2.0to2.99 Low 1.0to1.99
- 29. GRAND STRATEGY MATRIX Starbucks 07/31/2015
- 30. Grand Strategy MatrixWEEKCOMPETITIVEPOSITION RAPID MARKET GROWTH STRONGCOMPETITIVEPOSITION Quadrant II Quadrant I Quadrant III Quadrant IV SLOW MARKET GROWTH
- 32. Grand Strategy MatrixWEEKCOMPETITIVEPOSITION RAPID MARKET GROWTH STRONGCOMPETITIVEPOSITION Quadrant II Quadrant I Quadrant III Quadrant IV SLOW MARKET GROWTH
- 33. Action Plan & Recommendations • Enhance atmosphere – Entertainment to attract more customers • Increase marketing • Advertise • Sales promotions • Promote healthy products Starbucks 07/31/2015