A presentation made during an internship under Mr. Sameer Mathur of IIM Lucknow

1. ATHARVA SINGH
IIT DELHI
100% FREE CASE
STUDIES
ALL INTERNSHIP LONG

2. Primarily Deals in-
Coffee
Also Deals in-
Tea
Coffee brewing machines
STARBUCKS

3. TEXT
BRAND HISTORY
▸ Was Founded in Seattle in 1971
▸ Name Taken from the book Moby Dick
▸ Considered Main Representative of Second Wave of
Coffee
▸ Emphasis on expansion not taking away company culture

4. 1.“Employer of the Year”
U.S. Business Leadership Network Annual Leadership
Awards – 2014
2.“Retailer of the Year”
Visual Merchandising and Store Design-2013
3.One of the “World’s 50 Most Innovative Companies”
Fast Company - 2012
COMPANY AWARDS

5. 1.At the time of its IPO in 1992, Starbucks had 140
outlets, with a revenue of US$73.5 million, up from
US$1.3 million in 1987.
2.As of July 7, 2016, Starbucks is present on 6
continents and in 72 countries and territories.
3.Starbucks has moved 90% of its coffee purchases to
preferred C.A.F.E. certified providers
COMPANY ACHIEVEMENTS

6. Come and Find
out how!!!
WHY IS STARBUCKS SO
SUCCESSFUL?
PROPER MARKET SEGMENTATION
EFFECTIVE BRAND POSITIONING
EFFECTIVE PRICING STRATEGY
IMPORTANCE OF CAFE
THE STARBUCKS EXPERIENCE

7. PROPER MARKET SEGMENTATION
▸ Starbucks has identified the core
consumer base and seeks to cater
to them in the best way possible
▸ Young people who are working
with high incomes and youth
belonging to richer families form
the core
▸ Starbucks has established itself as
a premium brand fit for ‘premium
people’

8. EFFECTIVE BRAND POSITIONING
▸ Positioning is very useful in defining
and modifying the characteristics of
the product and its perceptions
▸ Customers buy an expensive
product of high quality (coffee etc),
but they also have the personalised
in-store experience (eg-the
customer's name is written on the
plastic cup their beverage will be
served in)
▸ Leads to Starbucks differentiate
itself and create a unique brand
position for itself in the market

9. EFFECTIVE PRICING STRATEGY
▸ Starbucks, a master of employing
value based pricing to maximize profits
▸ They use research and customer
analysis to formulate targeted price
increases that capture the greatest
amount consumers are willing to pay
for the same product
▸ Starbucks uses price hikes to separate
itself from the pack and reinforce its
premium brand image
▸ They apply price increases to specific
drinks and sizes rather than the whole
lot

10. IMPORTANCE OF CAFE(FAIR TRADE)
▸ Starbucks shares its research and
resources through their Farmer
Support Centres
▸ Invests heavily in practices like
Coffee and Farmer Equity
(C.A.F.E.) Practices
▸ All of this leads to improving
farmer livelihoods and ensuring
a long-term supply of high-
quality coffee for the industry

11. THE STARBUCKS EXPERIENCE
▸ Starbucks shares its research and
resources through their Farmer
Support Centres
▸ Invests heavily in practices like
Coffee and Farmer Equity
(C.A.F.E.) Practices
▸ All of this leads to improving
farmer livelihoods and ensuring
a long-term supply of high-
quality coffee for the industry

12. What are the risks
Starbucks Faces?

13. EVEN THOUGH IT IS THE PREMIUM BRAND IN A NICHE
SEGMENT, STARBUCKS COULD FACE EXTREME DOWNSCALE
COMPETITION FROM OTHER FIRMS LIKE MCDONALDS AND
DUNKIN’ DONUTS IF IT DOESN’T ATTEND TO CONTEMPORARY
ISSUES
Risk One!!!
WHAT DO WE DO ABOUT MCDONALDS AND
DUNKIN’ DONUTS?

14. AT A TIME WHEN CONSUMER SPENDING IS INCREASINGLY
MIGRATING TO ONLINE CHANNELS(LIKE AMAZON),
STARBUCKS IS THREATENED BY RESIDUAL EFFECTS OF
DECLINING FOOT TRAFFIC AT BRICK-AND-MORTAR STORES
MEANS FEWER PEOPLE STOPPING INTO STARBUCKS WHILE
THEY'RE OUT SHOPPING
Risk Two!!!
WHAT’S WITH ALL THE HOOPLA ABOUT THE
INTERNET?

15. COUNTRIES MAY HAVE A TOUGH REGULATORY MARKET AND CONDITIONS
COULD CHANGE IN WAYS THAT WOULD BE DISRUPTIVE TO STARBUCKS'
STRATEGY IN THE REGION. IF THE COFFEE COMPANY RUNS INTO FOOD
SAFETY ISSUES OR TENSIONS WITH THE U.S. TAKE A TURN FOR THE
WORSE, FOR INSTANCE, ITS BRAND COULD BE DAMAGED IN THE
COUNTRY AND ITS AMBITIOUS EXPANSION GOALS MIGHT PROVE LESS
FRUITFUL THAN ANTICIPATED.
Risk Three!!!
WHAT IF THE STARBUCKS EXPANSION GOES
WRONG?

16. How should
Starbucks
overcome all
such risks?

17. Leverage its
consumer
loyalty and
the unique
experience to
offset
consumer loss
The main attraction of a Starbucks
store is its inviting and premium
atmosphere. The coffee giant has,
and continues to pull out all the
stops, when it comes to establishing
its brand presence and value.
While there may be some loss of
customers due to higher prices, it
will be more than offset by optimal
customer retention and increasing
customer acquisitions.

18. To succeed in
the
international
market
location of
outlets and
costs need to
be spot on
The location needs to be in
sync with what the Starbucks
brand offers to each of us. It
should target places where its
core consumer segment,
business executives can easily
reach the location of the
store.
The pricing too needs to be
taken care of by tools like
market segmentation.

19. How should
Starbucks
counter the
changing
retail traffic
and increase
its sales
The most important components
needed for Starbucks to thrive are
an engaging, digital and mobile
relationship with customers that is
threaded into a branded,
immersive, experiential retail
destination
The common denominator will be
the creation of a consumer
experience that evokes human
emotion and connection missing on
the online method of the
contemporary times

20. TEXT
SUMMARY(THINGS TO REMEMBER)
▸Brand History
▸Why Starbucks Succeeds
▸Risks it faces
▸How should it overcome
emerging challenges

21. DISCLAIMER
Created by Atharva
Singh during an
internship on marketingmanagement under
Professor Sameer
Mathur, IIM Lucknow