All Matrices, BCG, External Factors Evaluation, Internal Factors Evaluation, Grand Strategy Matrix, Vision , Mission, of Starbucks

1. Starbucks
corporation
Case Study
Shariq Manzoor

2. Mission
Statement
of
Starbucks
“To inspire and nurture the
human spirit – one person,
one cup and one
neighborhood at a time

3. Analysis of
Mission
STATEMENT
 1. Customers
 2. Products or services
 6. Philosophy
Whereas following components are missing.
 3. Markets
 4. Technology
 5. Concern for survival, growth, and
profitability
 7. Self-concept
 8. Concern for public image
 9. Concern for employees

4. VISION
STATEMENT
to establish Starbucks as the
premier purveyor of the finest
coffee in the world while
maintaining our
uncompromising principles
while we grow

5. ANALYSIS OF
VISION
STATEMENT
 Becoming premier firm.
 Remain competitive in the Global
Market.
 Following company’s principles
therefore maintaining culture

6. DEVELOPED
MISSION
STATEMENT
 Starbucks is committed to making strong, rich
quality tea and coffee with wide ranges of flavors
available worldwide for coffee and tea lovers .
The aroma inspires and nurtures the human
spirit, and celebrates the culture of warmth and
belongings for everyone. We aim to promote our
employees by training and empowerment as
culture creates with our employees who are our
assets. The customers’ tastes are understood
with changing world and addressed by
continuous innovation in process and services.
We believe in bringing people together by
offering best in everything.

7. ANALYSIS OF
MISSION
STATEMENT
 1. Customers: The ones who are coffee and tea
lovers are addressed in the mission statement
clearly
 2. Products or services: Tea and Coffee are the
beverages; this specifies the nature of firm
particularly
 3. Markets: By mentioning that flavors are
available worldwide, specifies that starbucks is
operating in all over the world
 4. Technology: Continually innovating in
processes and services is pointing out that firm
is technology aware and innovating itself.

8.  5. Concern for survival, growth, and
profitability: understanding the varying consumer
taste in different part of world and providing flavors
and taste accordingly help firm to grow in long run.
 6. Philosophy: inspires and nurtures the human
spirit, and celebrates the culture of warmth and
belongings
 7. Self-concept: Operating in different parts of world
specify that firm is competitive in local as well as
international market.
 8. Concern for public image: Our Corporate Social
responsibility initiatives support the quality of life
 9. Concern for employees: Promoting employees by
training and empowerment is showing the concern
for employees

9. DEVELOPED
VISION
STATMENT
To be the leading place of having
a cup of coffee and tea around
each and every corner of the
world by committing the culture
of quality, warmth and integrity
always”

10. ANALYSIS OF
DEVELOPED
VISION
STATEMENT
 To be leading place in every corner of the
world show competitiveness mindset of a
firm.
 Culture of quality, warmth and integrity
define that firm is concerned for maintain
its culture always
 The quality of beverage is highly
emphasized

11. Political, Economical, Social and Technological (PEST) Analysis
POLITICAL ECONOMICAL
• A wide range factors can affect Starbucks sales
and profitability which includes the recession
period in which consumer buying power were
decrease.
• This industry experienced a major slowdown in
2009 due to the economic crisis and changing
consumer tastes, with the industry revenue in the
US declining 6.6% to $25.9 billion.
• Starbucks have to close 600 stores across USA
after 2009 recession, increase in price of Coffee
can also a negative factor and its sales.
• Coffee prices are also increasing which ultimately
hit the overall prices of Starbucks. They put up
strong alliance with other coffee companies to
increase their market share.
SOCIAL TECHNOLOGICAL
• Starbucks has been criticized by environmental
experts for pouring millions of gallons of water
down the drain in its shops.in order to counter this
criticism they come up with a new strategy for
Drought hit Namibia in Africa with the name of
“Dipper well” to improve their social gestures for
creating good image about them in the society.
• Starbucks introduced their App along with
Mobile payment plan in order to compete with
other competitors in the market.
• Their stores are community friendly, focused on
recycling and reducing waste. They build goodwill
among communities where they operate.
• They made significant investments in
technology to support their growth every year.

12. PORTER 5 FORCES ANALYSIS
THREATS TO NEW ENTRANTS: MODERATE THREATS TO SUUBSTITUTES: HIGH
• There is a direct risk of new contestants into the business as the
boundaries to passage are not sufficiently high to debilitate new
contenders to enter the market.
• There are numerous sensible substitute refreshments to espresso, which are mostly
tea, organic product juices, water, soda's, caffeinated drinks and so on. Bars and
Pubs with non/mixed drinks could likewise substitute for the social experience of
Starbucks.
• The occupant firms like Starbucks have a bigger scale and degree. • Buyers could likewise make their own home delivered espresso with family unit
premium espresso producers at a small amount of the cost for purchasing from
premium espresso retailers like Starbucks.
• At a restricted level, little coffeehouses can contend with any semblance
of Starbucks and Dunkin Brands.
• There are no exchanging costs for the purchasers for changing to substitutes, which
makes the danger high.
BARGAINING POWER OF BUYERS: MODERATE TO LOW BARGAINING POWER OF SUPPLIERS: LOW TO MODERATE
• There are a wide range of purchasers in this industry and no single
purchaser can request value concession.
• The fundamental contributions to the esteem chain of Starbucks is espresso beans and
premium Arabica espresso developed in select areas which are standard data sources,
which makes the cost of exchanging between substitute providers, decently low.
• It offers vertically separated items with a differing shopper base, which
make moderately low volume buys, which disintegrates the purchaser's
energy.
• The providers in the business additionally represent a low danger of going up against
Starbucks by forward vertical mix, which brings down their energy.
• Shoppers have a direct affectability in premium espresso retailing as they
pay a premium for higher quality items yet are attentive of over the top
premium in connection item quality.
• Starbucks additionally frames a very critical piece of the providers business, due its
size and extension, which make the energy of the providers lower. Given these
components, providers represent a respectably low dealing power.
INTENSITY OF COMPETITIVE RIVALRY: HIGH TO MODERATE
• The business has a monopolistic rivalry, with Starbucks having the biggest markets offer and its nearest rivals additionally having a noteworthy piece of the overall
industry, making huge weight on Starbucks.
• Customers do have any cost of changing to different contenders, which cases high force in competition.
• In any case, it's vital to take note of that Starbucks keep up some upper hand as it separates its items with premium items and administrations, which cause a direct
level of force in rivalry.

13. EFE MATRIX
Opportunities Factor Weight Ranking Score
1 Expansion into Emerging Markets 0.08 3 0.24
2 Expanding Product mix and offerings 0.1 3 0.3
3 Expansion of retail operations 0.05 4 0.2
4 Technological advances 0.06 4 0.24
5 New distribution channels 0.03 3 0.09
6 Brand Extension 0.03 2 0.06
7 Acquisitions and Mergers 0.07 3 0.21
8 Alliances with Courtesy Products 0.05 3 0.15
9 Customer Centric approach 0.03 4 0.12
10 New logo introduction with new vision 0.04 2 0.08
Threats
11 Increasing competition day by day. 0.07 3 0.21
12
Changing Consumer tastes and
lifestyle choices.
0.06 3 0.18
13 Developed Countries Economy. 0.08 3 0.24
14
Developed Countries Market
Saturation
0.06 2 0.12
15
Price Volatility in the Global Coffee
Market
0.05 3 0.15
16 Envirnomental Agency pressure 0.05 3 0.15
17 Economic Recession 0.03 4 0.12
18 Dunkin' Brand Inc 0.02 3 0.06
19 Wholesale & mail-order suppliers. 0.02 3 0.06
20 Anti-Starbucks policy 0.02 3 0.06
Total 1 3.04
Starbucks

14. CPM MATRIX
Starbucks
Starbucks Dunkin Donuts
Critical Success Factors Weighted Ratings
Weighted
Score Weighted Ratings
Weighted
Score
Provide high quality
Products 0.08 3 0.24 0.09 4 0.36
Strong Management 0.1 3 0.3 0.11 3 0.33
Customer Centric
Approach 0.08 2 0.16 0.08 3 0.24
International Market
Sales 0.04 3 0.12 0.05 3 0.15
Strong Financial Position 0.05 3 0.15 0.06 3 0.18
Marketing Strategy 0.05 2 0.1 0.06 3 0.18
Expansion in global
operations, Branding. 0.1 3 0.3 0.09 4 0.36
Using Advances Apps. 0.1 2 0.2 0.09 2 0.18
Their stores are
community friendly,
focused on recycling and
reducing waste. 0.1 2 0.2 0.05 3 0.15
Product line extension 0.09 3 0.27 0.1 3 0.3
Market Share
Concentration 0.08 4 0.32 0.08 4 0.32
Targeting Snacks
Industry too. 0.13 2 0.26 0.14 3 0.42
1 2.62 1 3.17

15. INTERNAL ASSESSMENT
MANAGEMENT

16. FINANCE

17. VALUE CHAIN

18. VALUE CHAIN
Primary Activities
• Inbound Logistics- Purchasing High Quality Arabica Beans from Coffee Farms of Latin America, Africa
and Asia.
• Operations – In early 2011, Starbucks has a total of 16,635 stores in 50 countries, consisting of 8,832
company-operated stores and 7,803 are licensed stores.
• Outbound logistics – Most of its product mix are sold in-store and some through large box retailers.
Payment around source through point of sale, prepaid Starbucks Cards and mobile payments.
• Marketing and Sales – Traditionally, investment in marketing activities have not be significant and
relied mainly on the growing reputation of premium quality product mix and superior customer services
to give the ‘Starbucks Experience’ to drive customers to their stores and products.
• Service - Starbucks has a reputation for providing supreme level of customer services to their
consumers.
Support Activities
• Firm Infrastructure. They have well designed, aesthetically pleasing stores. They have efficient level of
finance, accounting and legal departments to support the firm’s infrastructure.
• Human Resource Management – Great benefits, employee empowerment and amazing corporate culture
makes Starbucks drive efficient management of human capital.
• Technology development – Investments in innovative technologies like the well like mobile app.
• Procurement – Starbucks procures its products from a diverse group of supplier and has fixed contracts
with some of the suppliers.

19. HUMAN RESOURCE (HR)
Starbucks employees approx. 27,339 people worldwide (2017).
Starbucks US employed approx. 107,000 people, with 101,000 in company-
operated retail stores and the remainder in administrative and regional offices,
and store development, roasting and warehousing operations.
Approx. 30,000 employees were employed outside of the US, with 29,000 in
company-operated retail stores and the remainder in regional support facilities
and roasting and warehousing operations.

20. MARKETING
• Starbucks Card The Starbucks Card program is designed to increase customer loyalty and the
frequency of store visits by cardholders.
• Starbucks customers in the US have earned free beverages through the My Starbucks Rewards
program.
• Gold Level members earn a free drink after fifteen purchases at participating Starbucks stores.
• Members also receive free select syrups, milk options and refills on tea or brewed coffee during a
store visit. Starbucks Cards are accepted at all company-operated and most licensed stores in
North America.
• The cards are also accepted at a number of international locations.
RESEARCH AND DEVELOPMENT
• RnD team responsible for technical development of food and beverage products and new equipment.
• Approx. $9 million, $7 million and $7 million during fiscal 2010, 2009 and 2008, on technical RnD, in
addition to customary product testing and product and process improvements in all areas of its business.

21. Internal Factor Evaluation (IFE) Matrix
S. No. Key Internal Factors Weight Rating Weighted Score
Strengths
1. World’s largest coffee company/ Brand identification 0.10 4 0.40
2. Strategic partnership 0.05 3 0.15
3. Premium quality products 0.04 4 0.16
4. Global expansion 0.08 4 0.32
5. Expanding product line s 0.04 4 0.16
6. Mobile payment plan 0.04 4 0.16
7. Customer service 0.05 3 0.15
8. Work environment and loyal employees 0.04 4 0.16
9. Helping suppliers to develop 0.03 3 0.09
10. Financial ratios 0.04 4 0.16
Weaknesses
11. High Price coffee 0.09 2 0.2
12. Waste water claim 0.04 1 0.04
13. Little diversification 0.06 2 0.12
14. High operating expenses 0.06 1 0.07
15. Increasing competition 0.04 2 0.08
16. Operation difficulty in new countries 0.04 2 0.10
.17. Products not available at supermarkets 0.04 2 0.08
18. More investment to saturated US market 0.04 1 0.04
19. Less marketing and advertising efforts 0.05 2 0.10
20. Inconsistency in Quality 0.03 1 0.03

22. ANALYSIS OF CURRENT STRATEGIES
KEY GENERIC STRATEGIES
• One of the key strategy that Starbucks followed since its inception is that of product differentiation offering
differentiators such as premium product mix, locations, coffee beverages reputation and supreme customer service that
translated to building a premium valued brand which is costly to imitate for competitors.
• Starbucks has also followed a shrewd strategy of strategic alliance and making smart acquisitions. Starbucks didn’t
follow franchising model and operated company oriented stores and joint ventures in international markets.
• Starbucks has made some key acquisitions such as Teavana (Tea products), Bay Breads (premium bread products),
Evolution Fresh (fresh juice products) etc. to use the product diversification strategy.
• The core competence of Starbucks has been its ability to effectively leverage their cornerstone product differentiation
strategies by offering a premium product mix of high quality beverages and snacks. Starbuck’s brand equity is built on
selling the finest quality coffee and related products.

23. MAJOR ISSUES
1. CORPORATE LEVEL
• Starbucks coffees price much expensive than other market competitor product. is because Start
bucks purchased only high quality coffee beans. This will increase the quality of the product as
well as the pace of the product As Starbucks have competitors. this will be an advantage of the
competitor People are also nowadays looking forward for cheap products. Even though
Starbucks has its own customer who spends the money to get the quality coffee, it still has to
look for the other people who are running to the next store.
2. Functional Level
• Starbucks have poor marketing strategy on advertising. They prefer to build the brand by
promoting the drinks cup-by-cup with customers. b this way, the advertisement ends until they
drink the coffee, while some groups of people willing to support the advertisement for timing
hiring just to taste the drink for free.

24. MINOR PROLEMS
• Expensive Products: While Starbucks does differentiate their products with being highly quality
couple with the whole ‘Starbucks Experience’, in times of economic sluggishness, consumers to
have so switching costs to competitor’s products with lower prices and forgo paying a premium.
These premium prices could also pose some weakness for it to succeed in developing countries.
• Self-Cannibalization through Overcrowding: By aggressive expansion and high saturation due
to overcrowding in the market leads to self cannibalization and diminishes long term growth
targets of Starbucks. This is happening especially in the United States where Starbucks operates
8078 stores.17

25. SWOT Matrix
STRENGTHS
1. High Market Share and Market Growth.
2. Global Brand Recognition.
3. Product of the Highest Quality.
4. Strong Human Resource Management.
5. Location and Aesthetic Appeal of Stores.
6. Diverse Product Portfolio.
7. Goodwill among Customers due to Social
Responsibility Initiatives.
8. Customer-based Loyalty.
9. Use of Technology and Mobile-Outlets.
10. Limited Number of Competitors.
WEAKNESS
1. Expensive Products.
2. Self-Cannibalization due to Overcrowding.
3. Over-dependence on the USA Market.
4. Negative Large Corporate Image.
5. American/European Coffee Culture Clash with Other Countries.
6. Inability to show Consistency in Quality across Starbucks Stores
Worldwide.
7. Centralized Control.
8. High Operating Cost.
9. Environmental Issues.
10. Increased Financial Debts.
OPPORTUNITIES
1. Expanding into Emerging Markets.
2. Product Diversification.
3. Expansion of Retail Operations.
4. Technology Advances.
5. New Distribution Channels.
6. Brand Extension.
7. Market Penetration.
8. Mergers and Acquisitions.
9. Co-branding with Other Food Manufacturers.
10. High Growth Rate in Emerging Markets.
THREATS
1. Intense Competition/ Substitutes / Rivalry.
2. Price Volatility in the Global Expansion Market.
3. Developed Countries Market Saturation.
4. Changing Customer Taste and Lifestyle Choices.
5. Health Consciousness.
6. Incompatibility with Foreign Markets.
7. Brand Detachment.
8. Labor Union Issues.
9. Entry Barriers in International Markets.
10. Security Risks.
STATEGIC ANALYSIS

26. TOWS Matrix
SO
1. High Market Share and Market Growth will be
captured by New Distribution Channels. (S1, O5).
2. Global Brand Recognition will be acquired by
Product Diversification. (S2, O2).
3. Diverse Product Portfolio due to Brand Extensions
(S6,O6).
4. Use of Technology and Mobile Outlets due to
Technology Advancement. (S9,O4).
5. Strong Human Resource Management cause
Expansion of Retail Stores. (S4,O3).
ST
1. Product of the Highest Quality overcome the Changing Customer
Taste and Lifestyle Choices. (S3, T4).
2. Diverse Product Portfolio eliminates Incompatibility with Foreign
Markets. (S6, T6).
3. Strong Human Resource Management overcome Labor Union
Issues (S4,T8).
4. Customer-based Loyalty reduce Brand Detachment (S8, T7).
WO
1. High Operating Cost can be Overcome by Co-
branding with Other Food Manufacturers. (W8,O9).
2. Over-dependence on the USA Market can be reduced
by Expanding into Emerging Markets (W3, O1).
3. Environmental Issues can be reduced by
Technological Advancement (W9,O4).
4. American/European Coffee Culture Clash with Other
Countries can be reduced by Mergers and Acquisitions
(W5, O8).
WT
1. Discard Expensive Products to avoid Incompatibility with Foreign
Markets (W1, T6).
2. Avoid Inability to show Consistency in Quality across Starbucks
Stores Worldwide to minimize Changing Customer Taste and
Lifestyle Choices (W6, T4).
3. Eliminate American/European Coffee Culture Clash with Other
Countries to reduce Entry Barriers in International Markets (W5,
T9).
4. Reduce High Operating Cost to avoid Price Volatility in the
Global Expansion Market (W8, T2).
STATEGIC ANALYSIS

27. IE MATRIX

28. BCG MATRIX
Relative Market Share
IndustrySalesGrowthRate(Percentage) High Medium Low
1.0 0.50 0.0HighMediumLow
-200+20

29. Starbuck
GRAND STRATEGY (GS) MATRIX
Quadrant II
Market development
Market penetration
Product development
Horizontal Integration
Divestiture Liquidation
Quadrant I
Market development
Market penetration
Product development
Integration (any direction)
Related diversification
Quadrant III
Retrenchment
Related Diversification
Unrelated Diversification
Horizontal Integration
Divestiture
Liquidation
Quadrant IV
Joint Ventures
Strategic Alliances
Merger Acquisition
Related Diversification
Unrelated Diversification
Rapid Market Growth
Rapid Market Growth
WeakCompetitivePosition
StrongCompetitivePosition

30. QUANTITATIVE STRATEGIC (QSPM) MATRIX
Alternative 1 (SO)
Expand Market Share
Alternative 1 (ST)
Maintain Market Share
Key Factors Weight AS TAS Weight AS TAS
Strengths
Successful and Popular Product Lines 0.15 4 0.6 0.15 2 0.3
Access to High Quality Arabica Coffee Beans 0.1 4 0.4 0.1 2 0.2
Strong Supply Chan Management 0.1 4 0.4 0.1 3 0.3
Strong Intellectual Property & RnD Capabilities 0.05 4 0.2 0.05 4 0.2
Strong Financial Muscle 0.1 4 0.4 0.1 2 0.2
Strong Brand Image 0.1 3 0.3 0.1 3 0.3
Reputable Customer Service 0.05 3 0.15 0.05 2 0.1
Strong and Reputable Partners 0.05 4 0.2 0.05 1 0.05
Variety of Flavors 0.05 0 0 0.05 0 0
Weaknesses
Overextension of Product Portfolio 0.1 0 0 0.1 4 0.4
High Prices of Products 0.05 4 0.4 0.1 4 0.4
Environmental Issues 0.05 1 0.05 0.05 3 0.15
Sum Weights 1 1
Opportunities
High Growth Rate in Emerging Markets 0.2 4 0.8 0.2 1 0.2
High Growth Potential of a Single Served Coffee Market 0.1 4 0.4 0.1 2 0.2
High Growth Potential for Flavored Coffee in US Market 0.05 4 0.2 0.05 2 0.1
High Growth Potential for Courtesy Coffee Products 0.05 4 0.2 0.05 2 0.1
Threats
High Bargain Power of Suppliers 0.15 3 0.45 0.15 4 0.6
Trademark Infringement in Emerging Markets 0.1 4 0.4 0.1 4 0.4
Increased Competition from Local Competitors and New Entrants from
Emerging Markets
0.15 4 0.6 0.15 4 0.6
Saturated Market in Developed Economies 0.1 3 0.3 0.1 4 0.4
Increasing Price Sensitivity of Customers 0.1 3 0.3 0.1 4 0.4

31. RECOMMENDATIONS
• Increase international expansion: The first & foremost recommendation for Starbucks would be to increase
its existence in international countries (excluding United States of America). Aggressive marketing strategies
shall be followed at Starbucks to expand its operations.
• Technology friendly atmosphere: Starbucks shall try to build a technology friendly atmosphere. With the rise
in internet facilities an increasing shifts have been made from consumer’s work locations to home offices.
• Become environment friendly: Many efforts have been made by Starbucks to improve their image as an
environment friendly store; still there is scope for further improvements. Some of the ways which shall be
followed by Starbucks to become an environment friendly store would be to recycle the porcelain cups,
encourage the customers not to waste the food products & recycle the plastic Starbucks cards
• Continuous Improvements in the coffee: It would be quite an important task for Starbucks to continually
improve the taste of the coffee. In order to improve the quality of coffee, Starbucks shall analyze its brewing
systems on timely basis and consider renovations. They shall patent & copyright their way of accomplishing
the brewing process. This will add as a competitive advantage for Starbucks.