Starbucks

STARBUCKS
Presented by:
Mahwish Shaikh
Ahsan ali Kehar
Mehrunisa Shaikh
Zehra Shoro
Rehan ali kango
Assigned by:
Sir Abdul Salam

Content
 History
 Vision
 Mission
 Coffee War
 Marketing
 External factor
evaluation(EFE)
matrix
 Competitive profile
(CPM) matrix
 Michael Porters five
forces
 Internal Factor
Evaluation
 Swot matrix
 Bcg Matrix
 Internal External
Matrix
 Grand Strategy Matrix
 The Quantitative
Strategic Planning
Matrix (QSPM)
 Conclusion

Vision And Mission
– Vision statement
To establish Starbucks as the premier purveyor of the finest coffee in the world while
maintaining our uncompromising principles while we grow.
– Mission statement:
To inspire & nurture the human spirit , one person, one cup, and 1 neighborhood at a time.

History
– Starbucks was founded in 31st march 1971 in Seattle Washington
– After the success of 1 store the second store was opened in 1972 in university village
Washington.
– In 10 years business expanded to 5 new stores
– In 1982 Howard Schultz joined the team and in 1987 he purchased Starbucks from the owners.
– Starbucks experienced its first setback in 2002 when its Japanese operations posted a $3.9
million loss.
– In 2007 when the economic recession hit the world and MacDonald's entered the coffee
business.

Company Franchise store worldwide

Marketing
– Starbucks strives to elevate the simple task of coffee to a new level.
– Starbucks also provide electrical outlets and in some stores wireless
access.
– Starbucks also introduced their Starbucks’ cards .
– Starbucks relies on its image advertising than traditional advertising .
– Starbucks also encourages the use of their website where customers are
able to register their Starbucks’ cards , get nutrition information about
Starbucks, shop online, search for careers and much more.

External factor evaluation(EFE)
matrix
S. No Key external factors Weight Rating Weighted score
Opportunities
1 People demand products which are free from artificial flavors and healthy, more focus on
healthy and hygienic products
.20 4
0.8
2 High demand of mixed Lipton tea in Middle east and south Asia .10 2
0.3
3 Demand of product line addition .05 4 0.2
4 Building customer relationships .10 3 0.2
5 Globally Expansion .05 3 0.15
THREATS
1 Low price of competitors .20 4 0.8
2 Increase of private café and stores .15 3 0.45
3 Changing Consumer tastes and lifestyle choices .10 2.5 0.375
4 Market saturation in developed countries .05 4 0.2
TOTAL 1.0 3.475
Interpretation: Starbucks is doing good in industry as their EFE is more and above average as their result
is 3.475

Competitive profile (CPM) matrix
Starbucks Caribou coffee Dunkin donuts
Critical success factor Weight Rating Weight score Weight Rating Weight score Weight Rating Weight score
brand image 0.2 3 0.8 0.15 3 0.45 0.1 2 0.2
Product differentiation 0.1 4 0.4 0.2 3 0.6 0.15 3 0.45
Advertising 0.05 3 0.15 0.1 4 0.4 0.1 3 0.3
Price competitiveness 0.15 3 0.45 0.05 3 0.15 0.2 2 0.4
Financial position 0.15 3 0.45 0.05 2 0.1 0.1 1 0.1
Customer loyalty 0.05 3 0.15 0.1 1 0.1 0.05 3 0.15
Global expansion 0.2 2 0.4 0.15 1 0.15 0.2 4 0.8
Customer service 0.1 4 0.4 0.2 2 0.4 0.1 2 0.2
1 3.2 1 2.35 1 2.6
Interpretation: In competitive profile matrix Starbucks weighted score is 3.2 so its performance is better
than competitors.

Michael Porters five forces
Competitive rivalry or
competition
Very
strong
There is less differentiation of product because coffee
and snacks are offered by many other brands
Bargaining power of buyers or
customers
Very
Strong
They have power to switch to other brands
Bargaining power of suppliers Very
Strong
They have power if the number of suppliers are low in
an industry, Starbucks relies heavily on finest quality of
beans
Threat of substitutes or
substitution
strong because substitute product price is lower.
Threat of new entrants or new
entry
Strong There are lots of new brands opening, with this new entrant
are coming with the innovative ideas, and mostly local shops
are entering in the market with low cost and great qualityInterpretation: Starbucks has been strong in all five forces within the completion and industry

Internal Factor Evaluation
key internal Factors weight Rating Weighted
Score
Strengths
1 Internationally recognized brand 0.1 4 0.4
2 Convenient 0.07 4 0.28
3 great working environment 0.05 3 0.15
4 Employee excellence 0.1 4 0.4
5 R&D department 0.05 3 0.15
6 Strong brand image and essence 0.03 3 0.09
7 high standards services 0.1 4 0.4
8 wireless access, website, Starbucks cards, online services, nutritional information.' 0.1 3 0.3
9 Variety of flavors
Total 0.6 2.17
Weakness
1 Overdependence in the United States market 0.1 2 0.2
2 Low market share globally 0.05 1 0.05
3 Expensive Products 0.1 2 0.2
4 Sustainability 0.1 2 0.2
5 Less advertising and marketing of their products 0.02 1 0.02
6 Risky investments in more locations 0.03 0
TOTAL 0.4 0.67
NET TOTAL 1 2.84

SWOT MATRIX
Strength-Opportunities
– Increase expansion in continental market with its
strong brand image (S1, O5)
– Try to explore and utilize their R&D department
with some more products in beverages as
demanded by customers locally and globally.
– (S5, O2)
– by constantly introducing new variety of flavors in
their products and expanding their product line
and giving maximum value to customer. They can
build good and strong relationship with customers.
(s9, O4)
Weakness-Opportunities
• As Starbucks is over dependent in united
states they should expand their market to
other countries as well (w1, O5)
• As their products are so expensive they
should expand their product line with low
cost products for middle and lower middle
class (W3, O3)

SWOT MATRIX
Strength-Threats
– One of the major threats that Starbucks
could face is against its competitors. For
this purpose, Starbucks should work
through their strengths and give high
standard services to the customers. (S7,
T1)
– With the threat of market saturation in
developed countries Starbucks with strong
brand image can move to other countries
and earn more revenue. (S6, T4)
Weakness-Threats
• As Starbucks is more dependent
on some of their products in united
states. They should extend their
product line with Changing
Consumer tastes and lifestyle
choices in other countries. (W1,
T3)
• To avoid the threat of low price
competitors they should increase
their sustainability in the market
by doing different things (W4. T1)

Space Matrix
Financial Position Rating
1 Star bucks ROA is 5.56% +2
2 Star bucks ROE is 12.66% +4
3 Star Bucks Revenue Decreased to 7% +1
4 Star bucks Net Income Decreased 72% +1
Total 8
Industry Position Rating
1 Star bucks stores available in multiple countries to reach out the maximum
customers
+6
2 Star bucks is also having advantage of selling retail products +3
3 Star Bucks can gain advantage of providing healthy and organic drinks +3
Total +9
Stability Position Rating
1 Starbucks prices are very high as compare to other rivals, they should at least
come closer with the rival’s prices
-5
2 Star bucks retail products demand should be increased and provide knowledge
about using the coffee machines and brewing the beans
-4
3 Star Bucks should increase in the Research and Development sector in order to
bring some new recipe
-4
Total -13
Competitive Position Rating
1 Star bucks provides the premium coffee and its beans -1
2 Star bucks is providing WIFI and Electric sockets so that even working class can
feel at ease
-2
3 Starbucks consider employees its partners -2
Total -5

Space Matrix
• SP Average is -13.0 ÷ 3 = -4.33
• IP Average is +9 ÷ 3 = 3
• CP Average is -5 ÷ 3 = -1.66
• FP Average is +8.0 ÷ 4 = 2
• Directional Vector Coordinates:
• x-axis: -1.66 + (+3.) = +1.34
• y-axis: -4.33 + (+2) = -2.33

Bcg Matrix
• Market Growth:10.32%
• Market Share: 1.32%
Interpretation: By analyzing the competitors given in the case study we found out that Starbucks has the
market share of 1.32% which is excellent.
• market penetration
• market development,
• product development
HIGH
HIGHLOW
LOW

Internal External Matrix
Interpretation: Starbucks Corporation has lay in Grow and Build. According to its (IFE) weighted score is 2.84
and (EFE) weighted score is 3.475. Starbucks has focused on Backward, Forward and market penetration,
market Development and should have Product Development

Grand Strategy Matrix
Interpretation: Starbucks has lay in Quadrant (I) because Starbucks Market growth is 10% and its Competitive
position is strong.

The Quantitative
Strategic Planning
Matrix (QSPM)
Key Factors Weight AS TAS As TAS
S. No
OPPORTUNITIES
1 People demand products which are free from artificial
flavors and healthy, more focus on healthy and hygienic
products
.20 1 0.2 4 0.8
2 High demand of mixed Lipton tea in Middle east and
south Asia
.10 1 0.2 3 0.3
3 Demand of product line addition .05 3 .15 4 0.2
4 Building customer relationships .10 1 0.1 1 0.1
5 Expansion of market share to other countries .05 1 0.05 1 0.5
THREATS
1 Low price of competitors .20 4 0.5 1 0.2
2 Increase of private café and stores .15 - - -
3 Changing Consumer tastes and lifestyle choices .10 1 .10 2 0.2
4 Market saturation in developed countries .05 1 0.05 1 0.05
Total 1
STRENGTH
1 internationally recognized brand 0.1 - - - -
2 Convenient 0.07 - - - -
3 great working environment 0.05 - - - -
4 Employee excellence 0.1 - - - -
5 R&D department 0.05 2 0.1 3 .15
6 Strong brand image and essence 0.03 1 0.03 1 0.03
7 high standards services 0.1 - - - -
8 wireless access, website, Starbucks cards, online services,
nutritional information.'
0.1 - - - -
9 Variety of flavors 0.1 - - 4 -
WEAKNESS
1 Overdependence in the United States market 0.1 - - - -
2 Low market share globally 0.05 1 0.05 1 .05
3 Expensive Products 0.1 4 0.4 2 0.2
4 Sustainability 0.1 1 0.1 1 0.1
5 Less advertising and marketing of their products 0.02 - - - -
6 Risky investments in more locations 0.03 - - - -
Total 1 2.03 2.68
• There are two alternative strategies
which Starbucks need to consider
• (1) To reduce the prices Strategy
• (2) Expand the shelf items
• According to the sum of total
attractiveness we analysis that
strategy 2 with Attractive score of
2.63 indicates that Starbucks need
to increase its shelf item by
introducing new items.

Conclusion
• We found out that Starbucks is performing averagely in the industry
because there is lots of competition and rivals are doing price wars to
overcome the Starbucks. Star bucks need to increase product line in
order to gain advantage in the industry.

Starbucks

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