Starbucks' strategy focuses on its dominant position in the specialty coffee market through its extensive global store network. However, it faces high competition from thousands of smaller coffee shops and substitutes like tea. Starbucks relies on its core coffee and espresso drinks as cash cows but looks to expand internationally and through new products like instant coffee. Its supply chain carefully sources, samples, roasts, and packages coffee beans to ensure quality in its stores worldwide.

1. STARBUCKS STRATEGY

2. INTRODUCTION
• Starbucks Corporation is an international coffeehouse chain based in Seattle, Washington,
United States.
• CEO: Howard Schultz (Founder of Starbucks coffeehouse)
• Starbucks is the largest coffeehouse company in the world, with 16,120 stores in 49
countries, including around 11,000 in the United States, followed by nearly 1,000 in Canada
and more than 800 in Japan.
• Starbucks sells drip brewed coffee, espresso-based hot drinks, other hot and cold drinks,
snacks, and items such as mugs and coffee beans. Many of the company's products are
seasonal or specific to the locality of the store.
• Starbucks-brand ice cream and coffee are
also offered at grocery stores. Starbucks’ Italian style coffee, espresso
beverages, teas, pastries and confections had made Starbucks one of the greatest retailing
stories of recent history and world’s biggest specialty coffee chain.
• In 2003, Starbucks made the fortune 500.

3. COFFEE INDUSTRY
• Coffee is an important commodity and a popular beverage.
• Over 2.25 billion cups of coffee are consumed in the world every day.
• Over 90% of coffee production takes place in developing countries, while consumption
happens mainly in the industrialized economies.
• Worldwide, 25 million small producers rely on coffee for a living.
• Coffee is also bought and sold as a commodity on the New York Board of Trade.
• The world's largest transfer point for coffee is the port of Hamburg, Germany.

4. Porter’s five forces
Bargaining power of supplier: (high)
1.Farmers have less land to produce(3/4 coffee farms in world are
less than 3 acres.
2.Farmers don’t have desire, the volume, the expertise, connections
to export themselves, because most of the countries regulated
coffee sales . they are having a long negotiation with exporters
about price.
3.Very few exporters are there to export
Industry rivalry: (Low)
1.Low barriers to enter into
retail specialty coffee market .
2.Less regulations.
3.High profit margins.
4.Huge competition
Threat of substitutes:
(high)
1.Speciality coffee is facing
tough challenges from
substitutes like basic
coffee , tea, juice, soft
drinks, alcohol
Bargaining power of consumer: (high)
1.Due to presence of large specialty coffee makers,
consumers have high bargaining power.(3485 competitors
are present in specialty coffee market)
2.Adoptation of healthier life style and replacing of alcohol
with coffee .
3.Low switching cost.
Threat of new entrants : (high)
1.Facing high competition from
flavored coffee makers.
2.A Few players with multiple
outlets becoming tough
competition to star bucks ,
around 5500 coffee bars, cafés
are there in USA and Canada by
1999.

5. BCG
INDUSTRY
GROWTH RATE
RELATIVE MARKET SHARE
INTERNATIONAL
LOCATIONS
HIGH
LOW
LOWHIGH
VIA INSTANT
COFFEE
SEATTLE’S BEST
PRE-BOTTLE
FRAPPACINO’S
COFFEE’S
LATTE’S
FRAPPUCCINO'S

6. • It shows the cash cows as the regular Starbucks line of Coffee’s, Latte’s and Frappuccino's
found at nearly every location. These are stable products that account for the bulk of sales.
• A potential star is the International locations, which hold less financial risk and open doors
for innovation and stability.
• Question marks are the recently added VIA instant coffee to be expanding to grocery stores
and convenient stores. Another question mark is the oft forgotten sub-brand Seattle’s Best.
The company will be revamping this brand and it’s future is unknown.
• Current products like this such as the dog, pre-bottle Frappuccino's account for a tiny fraction
of sales.

7. SUPPLY CHAIN MANAGEMENT
SOURCING
Sourced approximately
50% of its beans from
Latin America
SAMPLING
Extracts 3 different
samples from every
shipment of 250 bags
1. Offer sample sent by
exporter
2. Before the shipment
3. At coffee roasting
plant
ROASTING &
BLENDING
Computerized roasters
roast the coffee beans
under appropriate
temperature and time
Air cooling
PACKAGING
Vacuum -sealing