Starbucks strategic management presentation outlines the company's business description, industry overview, and key strategies. Starbucks was established in 1971 and has grown to over 9,000 stores worldwide. Their mission is to inspire and nurture the human spirit through quality coffee. Starbucks faces issues of market saturation domestically but sees opportunities for international growth. Their strategies include rapid store expansion, extensive training, innovative products, and ensuring quality coffee sourcing.

1. Starbucks strategic management
MORIBA TOURAY

2. Presentation Outline
 Introduction to Starbucks
 Business Description
 Industry Overview
 Company Overview
 Key Strategic Environment
 Industry Analysis
 Internal Analysis
 SWOT Matrix Framework
 Starbucks Strategies
 Strategic Implementation of Action Plan
 8. Implementation and control
 Recommendation

3. About Starbucks
 Overview
 Mission
Vision
Long-term Objectives
 Corporate Values and
Business Principles

4.  Established in 1971 at Seattle, Washington
 Famous for its quality fresh-roasted coffee beans
and stylish atmosphere.
 Over 9,000 stores worldwide
 Product lines include :
− beverages (coffee, Tazo tea, soda, juices)
− pastries
− whole coffee beans
− coffee-related hardware and equipment
− merchandise (mug, CDs)
Overview

5. Starbucks Mission
 “To inspire and nurture the human spirit -
one person, one cup and one neighborhood
at a time.”
 Creating a culture of warmth and
belonging, where everyone is welcome.
 Acting with courage, challenging the status
quo
 Being present, connecting with
transparency, dignity and respect.
 Delivering our very best in all we do,
holding ourselves accountable for results.

6. Starbucks Vision
 “To establish Starbucks as the premier
purveyor of the finest coffee in the world
while maintaining our uncompromising
principles while we grow.”

7. Starbucks Value
 Creating a culture of warmth and
belonging, where everyone is welcome.
 Acting with courage, challenging the
status quo
 Being present, connecting with
transparency, dignity and respect.
 Delivering our very best in all we do,
holding ourselves accountable for results

8. Starbucks Objectives
 Premier purveyor of the finest coffee in the
world
 Maintain Uncompromising principles
 Develop enthusiastically satisfied
customers all of the time.
 Contribute positively to our communities
and our environment.
 Recognize that profitability is essential to
our future success.
 Starbucks is committed to a role of

9. Potential Issues
 A number of problems at home and abroad
 At home, Starbucks is facing market
saturation
 Economic conditions in the US and certain
International markets
 Market saturation comes store
cannibalization a situation where one
company store takes away business from
other stores
 Starbucks needs to find a way to convince
more customers to visit stores more often.

10. Industry Analysis
 Specialty coffee sales are increasing by
20% per year and account for nearly 8% of
the 18 billion dollar U.S. coffee market.
 Coffee statistics show that among coffee
drinkers the average consumption in the
United States is 3.1 cups of coffee per
day.
 Independent coffee shops equal $12
billion in annual sales

11. Industry Life Cycle

12. Market Share
Concentration

13. Starbucks PESTLE
Analysis
 Political Influences
-Relationships between U.S. and
countries producing coffee beans
− Environmental regulations
− Industry-specific regulations
 Economic Influences
− Demand for food and beverages
− Customers’ buying power
− Exchange rate & taxation

14. Starbucks PESTLE Analysis
 Social Influences
- Trend
- Consumer preferences
 - Changes in lifestyle and occupation
 - Education
 Technological Influences
-Advances in manufacture
-Biotech and agricultural development
-IT developments

15. Starbucks PESTLE Analysis
 Legal Factors
- Environmental rules and regulations
- Environmental disasters in countries which
produce coffee beans
- Global warming and other Environment
issues
 Environmental Factors
- Introduction of stricter customs and trade
regulations
- Licensing regulations

16. SWOT Analysis

17. Porters Five Forces

18. Starbucks Competence

19. Common Size Financial
Analysis
 Risen about 18% over the past 12 months
an impressive gain considering the S&P
500 is up just 2% during this same
timeframe.
 In 2018, Starbucks' net earnings amounted
to 4.52 billion U.S. dollars, up from
approximately 2.88 billion U.S. dollars the
previous year.
 Corporation reported earnings amounting
to approximately 4.52 billion U.S. dollars.

20. Financial Ratio

21. Internal Factors Evaluation
Matrix
 Strong brand image.
 Extensive global supply chain.
 Moderate diversification through
subsidiaries
 Strong culture
 Attention to detail
 Innovative and risk taking

22. External Factor Evaluation
Matrix
 Rising mobile purchases (opportunity)
 Technology transfers to coffee farmers
(opportunity)
 Rising availability of specialty coffee
machines for home use (threat)
 Saturation of the coffee industry

23. Starbucks’ Strategy
Rapid store expansion strategy
• Domestic store expansion
− A three-year expansion strategy
− “Starbucks everywhere” approach
• International store expansion
− Company-owned and company-operated stores or licensing
− Created a new subsidiary, Starbucks Coffee International
− Expanded its consumer products channel in South Pacific region

24. Starbucks’ Strategy
• Employee Training and Recognition
− Systems to recruit, hire and train baristas and store managers
 screening
 training programs
 awards for partners
• Real Estate, Store Design, Planning, and Construction
− A broad range of store formats (the right image and character)
− A “stores of the future” project team
− High-traffic, high-visibility store locations
− Control of average store opening costs
− Wi-Fi availability at stores

25. Starbucks’ Strategy
Product Line
•Wide range of products choices
•Special product promotion
•Selling music CDs
•Joint ventures
PepsiCo
Dreyer’s Grand Ice Cream
 Jim Beam Brands
•Acquisitions
 Hear Music
 Ethos Water
•Starbucks Cards
•Partnership with Bank One

26. Starbucks’ Strategy
Coffee purchasing strategy
• Building relationship with growers and exporters, checking on
agricultural conditions and crop yields, and searching out varieties
and sources that would meet Starbucks’ standards.
• Using fixed-price purchase commitment and purchasing coffee future
contracts
• Contributing to the sustainability of coffee growers and helping
environment conservation
• Purchasing and marketing Fair Trade Certified coffee
• Promoting coffee cultivation methods that protected biodiversity and
maintained a healthy environment

27. Industry and Competitive
Analysis
Generic Competitive Strategy

28. Market Penetration Strategy

29. Starbucks Generic Value
Chain
 Primary activities Inbound logistics:
Sourcing coffee from diverse coffee beans
producers.
 Operations: They have operation in 75
countries
 Outbound logistics: Most of its product
mix are sold in-store and some through
large box retailers.
 Marketing and Sales: Investment in
marketing activities

30. Starbucks Generic Value
Chain
 Service: Providing supreme level of
customer services
 Human Resource Management: Great
benefits, and employee empowerment
 Technology development: Investments in
innovative technologies
 Procurement: Products from a diverse
group of suppliers and has fixed contracts
with some of the suppliers.

31. VRIO Analysis

32. Strategic Implementation Action
Plan

33. Evaluation & Control
 Compare performance with desired
results and provides the feedback
 Determine what to measure
 Establish Standards of Performance
 Measure Actual Performance
 Compare Actual Performance with the
standard
 Take Corrective Action

34. Recommendation
 A re-invigoration of “Just Say Yes” and
“Exceed the expectations of your customers”
 Slow down the rate of new licensed stores.
 Marketing campaigns featuring the western,
high-quality, and “hip” image of Starbucks
 Starbucks should capitalize on the growth
opportunities in the Asia Pacific region

35. QUESTION?
END