Presentation on a case study (Starbucks In 2012: Evolving Into A Dynamic Global Organization) #presentation #starbucks #powerpoint #casestudy #slide #strategicmanagement #businessstrategy

1. Starbucks In 2012:
Evolving Into A
Dynamic Global
Organization

2. Manjerul Islam
BBA (Finance)
City University, Bangladesh
email: manjerul.cub@gmail.com
Linkedin: https://www.linkedin.com/in/manjerul

3. Starbucks
Starbucks is an American coffee
company and coffee house chain.
it was founded in Single Store in
Pikes Place Market scuttle,
Washington in 1971. 2019, the
company operates over
30,000 locations worldwide.
The name
is coming
from a
town
called
Starbo.

4. Café Florian in Venice, Italy
“coffee as art”
Original Inspiration of
Starbucks is coming
from a coffee house
named Café Florian in
Venice, Italy. European
Coffee House Culture is
“coffee as art”
Inspiration of Starbucks

5. Profile of Starbucks
 Type Public
 Industry Restaurants (Genre- Coffeehouse)
 Founded Pike Place Market in Seattle, Washington
(March 30, 1971)
 Founder(s) Jerry Baldwin, Gordon Bowker, Zev Siegl
 Headquarters Seattle, Washington, U.S.
 Area served Worldwide

6.  Key people Myron E. Ullman (Chairman)
Kevin Johnson (President and CEO)
 Products Coffee, beverages, smoothies, tea, baked goods,
sandwiches
 Subsidiaries Starbucks Coffee Company, Ethos Water, Evolution
Fresh, Hear Music, La Boulange Bakery, Seattle's
Best Coffee, Teavana, Torrefazione Italia
 Employees 291,000 (2018)
Continue…

7. • Revenue US$24.71 billion (2018)
• Operating income US$3.88 billion (2018)
• Net income US$4.51 billion (2018)
• Total assets US$24.15 billion (2018)
• Total equity US$1.16 billion (2018)
Continue…

8. Mission & Vision
Vision
 Establish Starbucks as the most recognized and respected
brand in the world.
Mission
 To inspire and nurture the human spirit – one person, one
cup and one neighbor hood at a time.
 Establish Starbucks as the premier purveyor of the finest
coffee in the world while maintaining our uncompromising
principles as we grow.

9. As of April 2019, Starbucks is present on 6 continents and
in 78 countries, with around 27,340 Locations
Service Area

10. Three friends jerry Baldwin, Zevsiegl, & Gordon who had
passion for fresh coffee. They opened Starbucks in
Scuttle's pike palace Market in 1971. From 1971 to 1976
Only sold roasted whole bean coffee.
1985
1971
Start the
Business
Howard Schultz joins Starbucks as director of retail
operations and marketing
1982
Schultz leaves the Starbucks and open a company
serving espresso drinks using Starbucks coffee beans.
1987 Schultz purchase Starbucks from the founder.
History timeline

11. 2007
Starbucks goes public.1992
Opens first store outside US, In Japan and China
2019
Starbucks is present on 6 continents and in 78 countries
with around 27,340 Locations
$9.4 billion in worldwide revenue
1996
1998 $1.3 billion in revenue
Continue…
2012 Starbucks comes to India

12. What are the industry dominant factors?
7 key questions…
• Market size : Over 2.25 billion cups
• Growth rate : 7% in a year
• Profitability : 40%-60% gross margin
• Rivals : 80 well known coffee brands direct and many indirect
• Customer : 70% American drink 3.5 cup coffee in a day
• Production : 8.5 million metric tones (10 countries)

13. What kind of competitive forces the industry member face?
Brigading Power Suppliers
(Low)
• Standardized & easy to
obtain input
• Suppliers face high entry
barriers
• Suppliers depends on them
Subsidiary products
(Moderate)
• Low switching cost
• Easy and really available
subsidiaries
• Consumer are extremely
loyal
Brigading Power Buyers
(Moderate)
• Low switching cost
• Brand name impact in the
industry
• Large customer base
Potential New Entrants
(Low)
• Powerful brand image
• Cost efficient performance
• High capacity needed to
enter
Rivals
(high)
• Slow industry growth
• High exit barrier
• No switching cost
• Unequally distributed
market share
Fig: Porter's Five Forces
7 key questions…

14. What are the driving factors of the industry?
• Geographical Expansion (Starbucks: 78 countries, 27,340 Locations)
• Financial Growth (Starbucks: Net income US$4.51 billion (2018) )
• Strong supply chain
• Brand recalling frequency
• Product/Service Innovation
• Brand Image
• Lifestyle
7 key questions…

15. 7 key questions…
What market position do the rivals occupied?
Price&QualityHighLow
Geographical Coverage ManyFew

16. What are the strategic move of rivals?
7 key questions…
1. Low cost service and product.
2. Add wine or beer to the menu.
3. Save on start up coast.
4. Partnership with other retailer.

17. What are the key competitive success factors?
7 key questions…
• Product and Service Innovation
• Helping farmers
• Brand image
• Technology
• Leadership
• Supply chain management
• Meeting Demand

18. What is the present industry attractive and competitive outlook
and opportunities?
7 key questions…
• High margins
• HR Management
• Music
• Popularity of the product
• Word of mouth
• Drive Thrush
• Lunch offering

19. Porter’s Five Forces analysis
What kind of competitive forces the industry member face?
Brigading Power Suppliers
(Low)
• Standardized & easy to
obtain input
• Suppliers face high entry
barriers
• Suppliers depends on them
Subsidiary products
(Moderate)
• Low switching cost
• Easy and really available
subsidiaries
• Consumer are extremely
loyal
Brigading Power Buyers
(Moderate)
• Low switching cost
• Brand name impact in the
industry
• Large customer base
Potential New Entrants
(Low)
• Powerful brand image
• Cost efficient performance
• High capacity needed to
enter
Rivals
(high)
• Slow industry growth
• High exit barrier
• No switching cost
• Unequally distributed
market share
Fig: Porter's Five Forces

20. Outbound operation Inbound Marketing Service
•Farm
•Exporter
•Broker
•Testing
•Roasting
•Warehouse
•Packaging
•Company
operated
stores
•Licensed
stores
• Retailing
•Specialty
•Direct
response
• Word-of-
mouth
• in-store
adds
•customer
Satisfaction
•individuality
•atmosphere
Value chain of Starbucks

21. SWOT Analysis
InternalfactorsExternalfactors
Positive factors Negative factors
OpportunitiesStrengths
WeaknessesThreats
• Brand image and value
• Good test and Quality service
• Strong supply chain
• Strong area coverage
• Experience
• Loyal customers
• Think global act local strategy
• High price
• Products easy to copy
• Clash Of The Coffee Cultures
• US Market Dependence
• Target only higher to higher meddle
class
• Global expansion
• Introducing new products and co-
bran
• Technological Advances
• New Way of Distribution
• Fierce competition from cheaper
alternatives
• The Price of Coffee Beans
• Economy of the Developed Country
• Change of Lifestyle and Preferences
• Brand Imitation

22. $16,448
$19,163
$21,316
$22,384
$0
$5,000
$10,000
$15,000
$20,000
$25,000
Revenue
2014 2015 2016 2017
$9,589
$11,375
$12,805
$13,349
$0
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
$14,000
$16,000
Gross Profit
2014 2015 2016 2017
REVENUE (in million USD) GROSS PROFIT (in million USD)
Financial statement

23. $1.36
$1.82
$1.90
$1.97
$0.00
$0.50
$1.00
$1.50
$2.00
$2.50
EPS
2014 2015 2016 2017
$2,064
$2,757 $2,828 $2,885
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
Net income
2014 2015 2016 2017
EARNING PER SHARENET INCOME (in million USD)
Financial statement

24. Case questions…
Is the global coffee industry attractive
for Starbucks?
The attractiveness of the global coffee industry
is relatively high for Starbucks. Starbucks should
shift the strategic focus away from developed
countries markets to ascending economies to
positive market growth in emerging markets.

25. What are key success factors in the global coffee market
and does Starbucks have them?
• Market leadership (market share of 75 percent in the U.S.)
• Superior store locations (high)
• Supply chain management (strong)
Does Starbucks have a competitive advantage?
• Successful and popular product lines
• The highly recognizable and popular brand image
• effective and efficient relationship with coffee bean suppliers
Case questions…

26. PESTEL Analysis
Does the strategy of Starbucks fit the environment?
Political Economical Social Technological Ecological Legal
Tax policies
and
regulatory
pressure
Low cost
outsourcing
coffee
corruption
Interest rate
and inflation
Local labor
cost
Unemployme
nt
Taxation
Growing
culture of
coffee
Increasing
middle class
population
Health
consciousnes
s
Use of coffee
machine
High
technology in
coffee
processing
Online
purchasing
Eco-friendly
attitude
Impact on
climate
change
International
consumer law
Safety law
Labor law
Quality
control
Case questions…

27. MarketshareHigh
Growth rate
LowLow
High High
Low
High
Low
What is the product portfolio condition of Starbucks?
Case questions…

28. Recommendations
• Innovate new product features
• Introduce new product line
• Focus on new emerging economic country like Bangladesh
• Reduce high dependency on US markets.
• Increase customer target area
• Reasonable and compatible price
• Standard quality product and service

29. Conclusion
After solving the case we find that Starbucks is one of the most
successful retailers of coffee at global scale. The success of the
company coming from its innovative business and marketing
strategies, high standard service, best quality product, well design
stores and geographical coverage that enhance customer
experience. Though Starbucks as many strong competitors but
still it has a great market position because of its brand image,
strong supply chain, and its huge experience.