The document provides an agenda and background information for analyzing how Starbucks can compete with rivals and sustain success in the future. It includes a SWOT analysis of Starbucks and rival Dunkin' Donuts, alternatives for Starbucks, and a 3-phase recommendation and implementation plan involving expansion of mobile stores, improving the customer experience and apps, and developing a Starbucks culture through marketing. The phases are estimated to cost $1.6 million over 3 years.

1. STARBUCKS
Canon Consultants: WaiYin Chan
Tik Fai Ling
Angel On KeeWong
1

2. Agenda
• Background
• Issue
• Brief Recommendation
• SWOT Analysis
• Rival Analysis
• Alternatives
• Recommendation
• Implementation Plan
• Finances
• Conclusion
2

3. Starbucks Background
• First Store
in Seattle’s
Pike Place
Market
1971
1987
• Began selling
bottled
Frappuccino coffee
drink through
North American
Coffee Partnership
(Pepsi-Cola North
America)
• Starbucks
came out with
their first mail-order
catalog,
enabling mail-ordering
of
their coffee in
all 50 states
1988
1998
• Acquireed
Tazo, a tea
company
based in
Portland,
Oregon
• Grew from
55 stores
to 15,000
stores
1989 - 2013
3

4. ISSUE
How does Starbucks compete with the rival
and sustain its success for future?
4

5. Brief Recommendation
Expansion Development Improvement
5
Marketing

6. SWOT Analysis – Strength and Weakness
Strength Weakness
• Companies Value $6.9 billion
• Largest coffeehouse chain in the world
• Strong brand image with quality coffee
• No. 19 in Forbes’ TheWorld’s Most
Innovative Companies
• Employee management
• Consistently strong financial and
operating performance
• Lack of internal focus
• Need more of a wide spread customer base
• Product Pricing
• Stores can become crowded at times
• Increasing Number of competitors
6

7. SWOT Analysis – Opportunities and Threat
7
Opportunities Threat
• Extend supplier range
• Expansion to emerging economies
• Increase product offerings
• Expansion of retail operations
• Co-branding with other food
manufactures
• Rising prices of coffee beans and dairy products
• Trademark infringements
• Increased competition from local cafes and
specialization of other coffeehouse chains
• Market Saturation

8. RIVAL:
DUNKIN’ DONUTS
8

9. Dunkin’ Donuts: Strength and Weakness
Strength Weakness
• Strong Brand Name
• High Percent of Change in Sales
• Over 100 varieties of donuts
• Popular for a number of bakery
products like coffee, tea, and hot
chocolate
• Innovative ways to retain
customer by issuing coupon and
discount
• Constant rift with the franchisee
owners and numerous instance of
suing them
• High competition in this industry
makes them hard to gain more
market share.
• Lack of Products Choice
• Limited Geographic Presence
• Weak Advertising Strategy
9

10. Market Share Comparison Between 2011 & 2013
10
2011
2013

11. Positioning
Price
11
Quality

12. Alternatives
Options 1
• Status Quo
Option 2
• Refocused
on the Price
Strategy
Option 3
• Store
expansion to
boost up the
% of change
Option 4
• Refocused
on Customer
Experience
and
Distribution
Channel
12

13. Recommendation
13
Starbucks Apps and Customer Experience
Expansion:
Starbucks Mobile Store
Development:
Starbucks Culture
Improvement:
2014 2015 2016
Marketing:
Promoted through different media
2017

14. IMPLEMENTATION
PLAN
14

15. Target Audience
• Most of the Starbucks are located in big cities / shopping mall
• Middle to Upper Class
• Business associates
• Either single / married
• Have a tendency for a greater amount of disposable income
• College Student
15

16. YOU WANT MORE AUDIENCE!!!
Starbucks Customers
16

17. Phase I: Expansion of Starbucks Mobile
Stores
• Bypass some of the flow from store to truck
• Goal: Make it internationally
• In major cities’ commercial district
• Irregularly to do promotion in College
• Tasting Event for New Product
• Offer “Buy one get one free”
17
Phase I
• Expansion
Phase II
• Improvement
Phase III
• Development
Target:
3 trucks in every
city in 2017

18. Phase I: Expansion of Starbucks Mobile Stores
18

19. Phase II: Customer Experience
• Training Program (Focused on Customer)
• Train the employees to remember the loyal or frequent customers’
names and orders, have conversations with customers, etc.
• Creating customer intimacy
• Customers to feel special and welcome
19
Phase I
• Expansion
Phase II
• Improvement
Phase III
• Development
Make your customer experience
warmer and friendlier

20. How to encourage the employee?
20
• “Star of the Month”
• Allow the consumer to pick the best
employee of the month
• Reward the “Star of the Month” with bonus
• Monthly Bonus: $100-200
• Increase employee’s loyalty
• Increase the willingness to serve better
L
o
l
a

21. Phase II – Starbucks Apps
21
Phase I
• Expansion
Phase II
• Improvement
Phase III
• Development
Source: Google Play Website
1. Make it more user friendly
2. Top Ten Favorite Drinks
3. Allow Customer to Buy Products on Apps
4. Creating personalized promotions
• Combining the customers’ personal / non personal about them
• The amounts and types of purchases they make or any
benefits they receive through Starbucks Cards Programs.
5. Add More Categories
• Examples: Drinks Menu, Food Menu, Nutrition Menu

22. PHASE III – Create Starbucks Culture
•Enhance the Store Experience
•Increase the loyalty
• Uniformity of “Name on the Cup”
•Make it become a culture of
Starbucks
22
Phase I
• Expansion
Phase II
• Improvement
Phase III
• Development:

23. PHASE III – Promote the Starbucks Culture
23
Music
Video
TV program
• Big Bang
Theory
• Broken Girl
Movie
Embedded Advertisements
Phase I
• Expansion
Phase II
• Improvement
Phase III
• Development:

24. FINANCE
24

25. • Starbucks Seems to be unstable
25
Finance – Sales Forecast • Dunkin’ Donut is more stable
Starbucks’s Sales Dunkin’ Donuts’ Sale
Year Sales % of Change
2008 8624
2009 8141 -5.6
2010 8943 9.9
2011 9205 2.9
2012 10007 8.7
2013 10654 6.5
Year Sales % of Change
2008 5572
2009 5706 2.4
2010 5921 3.8
2011 6433 8.6
2012 6774 5.3
2013 7150 5.6

26. Finance - Growth Rate
Growth rate of
Starbucks:
3.975%
Growth rate of
Dunkin’ Donut:
5.14%
We hope to:
• Make the growth rate more stable
• Increase the growth rate gradually catch up with the growth rate of Dunkin’ Donut
26

27. Finance – Sales Forecast
27
2015
$11,201.62
2016
$11,777.38
2017
$12,382.74

28. Finance - Phase I
• Target 3 trucks in every city in 2017
• $60,000 to get a food truck on the ground
• 13 cities
• Operating Cost for 1 truck $50,000
• First try to operate 1 truck in each city
• Total budgets to buy trucks in 2014 - 2015: $780,000
• Cost of operating trucks: $650,000
Source: http://www.forbes.com/sites/investopedia/2012/09/27/the-cost-of-starting-a-food-truck/ 28

29. Finance - Phase II
Spend 1100 hour
for making an
apps
Hire Specialist:
$150 / hour
Approximated Cost:
$165,000
Source: http://appmuse.com/appmusing/mobile-app-development-costs-revisited/ 29

30. Finance - Phase III
Average cost of TV commercial for one quarter:$109,000
Average cost of TV commercial for one year:$436,000
Cost of Making a tier 1 commercial:$5,000
Assume 4 commercial per year
Total cost of making commercial $20,000
Source: http://www.adweek.com/news/television/their-prime-broadcast-spot-costs-soar-132805 30

31. Conclusion
Attract more
people by
increasing
exposure if
food trucks
Enhance our
application
to increase
data
exchange
with
customer
Increase
loyalty by
increase
intimacy with
customer
Increase
customer by
more
aggressive
advertising
31

32. QUESTIONS?
32

33. Appendix A – Starbucks Mission Statement in 2013
Our Mission
To inspire and nurture the human spirit – one person, one cup and one neighborhood at a time.
Our Vision Our Goals
Coffee
It has always been, and will always be, about quality. We’re passionate about ethically sourcing the finest coffee beans, roasting them with great care
and improving the lives of people who grow them. We care deeply about all of this; our work is never done.
Partners
We’re called partners, because it’s not just a job, it’s our passion. Together, we embrace diversity to create a place where each of us can be ourselves.
We always treat each other with respect and dignity. And we hold each other to that standard.
Customers
When we are fully engaged, we connect with, laugh with and uplift the lives of our customers – even if just for a few moments.
Sure, it starts with the promise of a perfectly made beverage, but our work goes far beyond that. It’s really about human connection.
Stores
When our customers feel this sense of belonging, our stores become a haven, a break from the worries outside, a place where you can meet with
friends. It’s about enjoyment at the speed of life – sometimes slow and savored, sometimes faster. Always full of humanity.
Neighborhood
Every store is part of a community, and we take our responsibility to be good neighbors seriously. We want to be invited in wherever we do business.
We can be a force for positive action – bringing together our partners, customers and the community to contribute every day. Now we see that our
responsibility – and our potential for good – is even larger. The world is looking to Starbucks to set the new standard, yet again. We will lead.
Shareholders
Every store is part of a community, and we take our responsibility to be good neighbors seriously. We want to be invited in wherever we do business.
We can be a force for positive action – bringing together our partners, customers and the community to contribute every day. Now we see that our
responsibility – and our potential for good – is even larger. The world is looking to Starbucks to set the new standard, yet again. We will lead.
Environmental
 Understanding of environmental issues and sharing information with our partners.
 Developing innovative and flexible solutions to bring about change.
 Striving to buy, sell and use environmentally friendly products.
 Recognizing that financial responsibility is essential to our environmental future.
 Instilling environmental responsibility as a corporate value.
 Measuring and monitoring our progress for each project.
 Encouraging all partners to share in our mission.
33
Source: Company Website

34. Appendix B – Starbucks Financial Performance
(2007-2013)
34

35. Appendix C – Dunkin’ Donuts’ Financial Performance
(2008-2013)
35

36. Appendix D – Majority of Starbucks Retail Sales
Specialty Coffee Beverage
61%
Whole-Bean Coffees
Food
16%
15%
Coffee-related products
8%
Specialty Coffee Beverage Food Whole-Bean Coffees Coffee-related products
36
Source: Company Website