The document provides background information on Starbucks, including its history from founding in 1971 through expansion led by Howard Schultz in the 1980s and 1990s. It discusses Starbucks' vision, mission and objectives. It also performs external analysis using PEST and Porter's Five Forces frameworks to understand the business environment and competitive landscape.
The ppt descibes the the Branding and marketing strategies of Starbucks Under 8 functional Bracket like Logo, Standardisation, expansion, Globalisation, Co-branding, Augmented Services, Facing Competition and Pricing Strategies.
An interesting analysis of Starbucks's SWOT, 4Ps, Strategy, Marketing, Finance etc. Hope you will enjoy this presentation. Go through the slides and don't forget to hit like and share buttons. All the best.
The ppt descibes the the Branding and marketing strategies of Starbucks Under 8 functional Bracket like Logo, Standardisation, expansion, Globalisation, Co-branding, Augmented Services, Facing Competition and Pricing Strategies.
An interesting analysis of Starbucks's SWOT, 4Ps, Strategy, Marketing, Finance etc. Hope you will enjoy this presentation. Go through the slides and don't forget to hit like and share buttons. All the best.
Starbucks has evolved from a mere seller of coffee products to a full-fledged chain “restaurant”, offering not only coffee products but also other beverages, foods, and merchandise.
Starbucks is still a global leader in the coffee shop chain business
Introduced an online app making it more convenient for customers to locate stores and place orders
Starbucks slogan of “Uniquely Starbucks” continues to play a huge role in company’s success
A Fortune 500 company, Starbucks share prices reached its peak in 2006 and declined unexpectedly in 2008. Although its business has picked up in 2011 with an increase in operating profits, Starbucks has lost its market leader position to Costa, a chain coffee shop business owned by Whitbread plc. Starbucks’ strategic issues are its decrease in market share, negative brand perception that was invoked by its competitors and its devalued Starbucks’ Experience that was its competitive advantage. A situational analysis of Starbucks was conducted to indicate possible opportunities and threats. Internal analysis and competitor analysis was conducted simultaneously to identify Starbucks distinctive capabilities and weaknesses against competitors. Strategic options such as Market Penetration, Product Development and Market development were assessed for their suitability, acceptability and feasibility. Strategic choices that unravel three issues that Starbucks is challenged with are presented in the report.
All aspect of strategic management of Stabucks.
If you would like to download these slides, send me via: nguyenpuyen91@gmail.com with your purpose of download.
Starbucks has evolved from a mere seller of coffee products to a full-fledged chain “restaurant”, offering not only coffee products but also other beverages, foods, and merchandise.
Starbucks is still a global leader in the coffee shop chain business
Introduced an online app making it more convenient for customers to locate stores and place orders
Starbucks slogan of “Uniquely Starbucks” continues to play a huge role in company’s success
A Fortune 500 company, Starbucks share prices reached its peak in 2006 and declined unexpectedly in 2008. Although its business has picked up in 2011 with an increase in operating profits, Starbucks has lost its market leader position to Costa, a chain coffee shop business owned by Whitbread plc. Starbucks’ strategic issues are its decrease in market share, negative brand perception that was invoked by its competitors and its devalued Starbucks’ Experience that was its competitive advantage. A situational analysis of Starbucks was conducted to indicate possible opportunities and threats. Internal analysis and competitor analysis was conducted simultaneously to identify Starbucks distinctive capabilities and weaknesses against competitors. Strategic options such as Market Penetration, Product Development and Market development were assessed for their suitability, acceptability and feasibility. Strategic choices that unravel three issues that Starbucks is challenged with are presented in the report.
All aspect of strategic management of Stabucks.
If you would like to download these slides, send me via: nguyenpuyen91@gmail.com with your purpose of download.
A free version of Starbucks Corporation SWOT analysis 2016. To get the full presentation buy the SWOT here: https://www.strategicmanagementinsight.com/swot-analyses/starbucks-swot-analysis.html
We look at the role of the Brand Leader, how to develop marketing execution strategy, tools to make marketing decisions and how to give direction to an agency.
At Beloved Brands, we make brands stronger and we make brand leaders smarter. We can build a Brand Management Training Program, to unleash the full potential of your team.
1. Strategic Thinking
2, Creating a Beloved Brand
3. Consumer Centricity
4. Brand Positioning
5. Brand Plans
6. Creative Briefs
7. Brand Analytics and the business review
8. Marketing Execution
9. Strategic Media Plans
10. Winning the Purchase Moment
Workshop on How to Think Strategically.
We teach brand leaders to think strategically. We show them how to ask the right questions before seeing solutions, how to map out a range of decision trees that intersect and connect by imagining how events will play out. We take them through the 7 elements of good strategy: vision, opportunity, focus, speed, early win, leverage and gateway. We look at strategy from a competitive position, consumer connectivity, core strength and situational
Skeem Saam in June 2024 available on ForumIsaac More
Monday, June 3, 2024 - Episode 241: Sergeant Rathebe nabs a top scammer in Turfloop. Meikie is furious at her uncle's reaction to the truth about Ntswaki.
Tuesday, June 4, 2024 - Episode 242: Babeile uncovers the truth behind Rathebe’s latest actions. Leeto's announcement shocks his employees, and Ntswaki’s ordeal haunts her family.
Wednesday, June 5, 2024 - Episode 243: Rathebe blocks Babeile from investigating further. Melita warns Eunice to stay clear of Mr. Kgomo.
Thursday, June 6, 2024 - Episode 244: Tbose surrenders to the police while an intruder meddles in his affairs. Rathebe's secret mission faces a setback.
Friday, June 7, 2024 - Episode 245: Rathebe’s antics reach Kganyago. Tbose dodges a bullet, but a nightmare looms. Mr. Kgomo accuses Melita of witchcraft.
Monday, June 10, 2024 - Episode 246: Ntswaki struggles on her first day back at school. Babeile is stunned by Rathebe’s romance with Bullet Mabuza.
Tuesday, June 11, 2024 - Episode 247: An unexpected turn halts Rathebe’s investigation. The press discovers Mr. Kgomo’s affair with a young employee.
Wednesday, June 12, 2024 - Episode 248: Rathebe chases a criminal, resorting to gunfire. Turf High is rife with tension and transfer threats.
Thursday, June 13, 2024 - Episode 249: Rathebe traps Kganyago. John warns Toby to stop harassing Ntswaki.
Friday, June 14, 2024 - Episode 250: Babeile is cleared to investigate Rathebe. Melita gains Mr. Kgomo’s trust, and Jacobeth devises a financial solution.
Monday, June 17, 2024 - Episode 251: Rathebe feels the pressure as Babeile closes in. Mr. Kgomo and Eunice clash. Jacobeth risks her safety in pursuit of Kganyago.
Tuesday, June 18, 2024 - Episode 252: Bullet Mabuza retaliates against Jacobeth. Pitsi inadvertently reveals his parents’ plans. Nkosi is shocked by Khwezi’s decision on LJ’s future.
Wednesday, June 19, 2024 - Episode 253: Jacobeth is ensnared in deceit. Evelyn is stressed over Toby’s case, and Letetswe reveals shocking academic results.
Thursday, June 20, 2024 - Episode 254: Elizabeth learns Jacobeth is in Mpumalanga. Kganyago's past is exposed, and Lehasa discovers his son is in KZN.
Friday, June 21, 2024 - Episode 255: Elizabeth confirms Jacobeth’s dubious activities in Mpumalanga. Rathebe lies about her relationship with Bullet, and Jacobeth faces theft accusations.
Monday, June 24, 2024 - Episode 256: Rathebe spies on Kganyago. Lehasa plans to retrieve his son from KZN, fearing what awaits.
Tuesday, June 25, 2024 - Episode 257: MaNtuli fears for Kwaito’s safety in Mpumalanga. Mr. Kgomo and Melita reconcile.
Wednesday, June 26, 2024 - Episode 258: Kganyago makes a bold escape. Elizabeth receives a shocking message from Kwaito. Mrs. Khoza defends her husband against scam accusations.
Thursday, June 27, 2024 - Episode 259: Babeile's skillful arrest changes the game. Tbose and Kwaito face a hostage crisis.
Friday, June 28, 2024 - Episode 260: Two women face the reality of being scammed. Turf is rocked by breaking
Meet Crazyjamjam - A TikTok Sensation | Blog EternalBlog Eternal
Crazyjamjam, the TikTok star everyone's talking about! Uncover her secrets to success, viral trends, and more in this exclusive feature on Blog Eternal.
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Tom Selleck Net Worth: A Comprehensive Analysisgreendigital
Over several decades, Tom Selleck, a name synonymous with charisma. From his iconic role as Thomas Magnum in the television series "Magnum, P.I." to his enduring presence in "Blue Bloods," Selleck has captivated audiences with his versatility and charm. As a result, "Tom Selleck net worth" has become a topic of great interest among fans. and financial enthusiasts alike. This article delves deep into Tom Selleck's wealth, exploring his career, assets, endorsements. and business ventures that contribute to his impressive economic standing.
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Early Life and Career Beginnings
The Foundation of Tom Selleck's Wealth
Born on January 29, 1945, in Detroit, Michigan, Tom Selleck grew up in Sherman Oaks, California. His journey towards building a large net worth began with humble origins. , Selleck pursued a business administration degree at the University of Southern California (USC) on a basketball scholarship. But, his interest shifted towards acting. leading him to study at the Hills Playhouse under Milton Katselas.
Minor roles in television and films marked Selleck's early career. He appeared in commercials and took on small parts in T.V. series such as "The Dating Game" and "Lancer." These initial steps, although modest. laid the groundwork for his future success and the growth of Tom Selleck net worth. Breakthrough with "Magnum, P.I."
The Role that Defined Tom Selleck's Career
Tom Selleck's breakthrough came with the role of Thomas Magnum in the CBS television series "Magnum, P.I." (1980-1988). This role made him a household name and boosted his net worth. The series' popularity resulted in Selleck earning large salaries. leading to financial stability and increased recognition in Hollywood.
"Magnum P.I." garnered high ratings and critical acclaim during its run. Selleck's portrayal of the charming and resourceful private investigator resonated with audiences. making him one of the most beloved television actors of the 1980s. The success of "Magnum P.I." played a pivotal role in shaping Tom Selleck net worth, establishing him as a major star.
Film Career and Diversification
Expanding Tom Selleck's Financial Portfolio
While "Magnum, P.I." was a cornerstone of Selleck's career, he did not limit himself to television. He ventured into films, further enhancing Tom Selleck net worth. His filmography includes notable movies such as "Three Men and a Baby" (1987). which became the highest-grossing film of the year, and its sequel, "Three Men and a Little Lady" (1990). These box office successes contributed to his wealth.
Selleck's versatility allowed him to transition between genres. from comedies like "Mr. Baseball" (1992) to westerns such as "Quigley Down Under" (1990). This diversification showcased his acting range. and provided many income streams, reinforcing Tom Selleck net worth.
Television Resurgence with "Blue Bloods"
Sustaining Wealth through Consistent Success
In 2010, Tom Selleck began starring as Frank Reagan i
From Slave to Scourge: The Existential Choice of Django Unchained. The Philos...Rodney Thomas Jr
#SSAPhilosophy #DjangoUnchained #DjangoFreeman #ExistentialPhilosophy #Freedom #Identity #Justice #Courage #Rebellion #Transformation
Welcome to SSA Philosophy, your ultimate destination for diving deep into the profound philosophies of iconic characters from video games, movies, and TV shows. In this episode, we explore the powerful journey and existential philosophy of Django Freeman from Quentin Tarantino’s masterful film, "Django Unchained," in our video titled, "From Slave to Scourge: The Existential Choice of Django Unchained. The Philosophy of Django Freeman!"
From Slave to Scourge: The Existential Choice of Django Unchained – The Philosophy of Django Freeman!
Join me as we delve into the existential philosophy of Django Freeman, uncovering the profound lessons and timeless wisdom his character offers. Through his story, we find inspiration in the power of choice, the quest for justice, and the courage to defy oppression. Django Freeman’s philosophy is a testament to the human spirit’s unyielding drive for freedom and justice.
Don’t forget to like, comment, and subscribe to SSA Philosophy for more in-depth explorations of the philosophies behind your favorite characters. Hit the notification bell to stay updated on our latest videos. Let’s discover the principles that shape these icons and the profound lessons they offer.
Django Freeman’s story is one of the most compelling narratives of transformation and empowerment in cinema. A former slave turned relentless bounty hunter, Django’s journey is not just a physical liberation but an existential quest for identity, justice, and retribution. This video delves into the core philosophical elements that define Django’s character and the profound choices he makes throughout his journey.
Link to video: https://youtu.be/GszqrXk38qk
Maximizing Your Streaming Experience with XCIPTV- Tips for 2024.pdfXtreame HDTV
In today’s digital age, streaming services have become an integral part of our entertainment lives. Among the myriad of options available, XCIPTV stands out as a premier choice for those seeking seamless, high-quality streaming. This comprehensive guide will delve into the features, benefits, and user experience of XCIPTV, illustrating why it is a top contender in the IPTV industry.
As a film director, I have always been awestruck by the magic of animation. Animation, a medium once considered solely for the amusement of children, has undergone a significant transformation over the years. Its evolution from a rudimentary form of entertainment to a sophisticated form of storytelling has stirred my creativity and expanded my vision, offering limitless possibilities in the realm of cinematic storytelling.
Panchayat Season 3 - Official Trailer.pdfSuleman Rana
The dearest series "Panchayat" is set to make a victorious return with its third season, and the fervor is discernible. The authority trailer, delivered on May 28, guarantees one more enamoring venture through the country heartland of India.
Jitendra Kumar keeps on sparkling as Abhishek Tripathi, the city-reared engineer who ends up functioning as the secretary of the Panchayat office in the curious town of Phulera. His nuanced depiction of a young fellow exploring the difficulties of country life while endeavoring to adjust to his new environmental factors has earned far and wide recognition.
Neena Gupta and Raghubir Yadav return as Manju Devi and Brij Bhushan Dubey, separately. Their dynamic science and immaculate acting rejuvenate the hardships of town administration. Gupta's depiction of the town Pradhan with an ever-evolving outlook, matched with Yadav's carefully prepared exhibition, adds profundity and credibility to the story.
New Difficulties and Experiences
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Expectation and Delivery
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Are the X-Men Marvel or DC An In-Depth Exploration.pdfXtreame HDTV
The world of comic books is vast and filled with iconic characters, gripping storylines, and legendary rivalries. Among the most famous groups of superheroes are the X-Men. Created in the early 1960s, the X-Men have become a cultural phenomenon, featuring in comics, animated series, and blockbuster movies. A common question among newcomers to the comic book world is: Are the X-Men Marvel or DC? This article delves into the history, creators, and significant moments of the X-Men to provide a comprehensive answer.
In the vast landscape of cinema, stories have been told, retold, and reimagined in countless ways. At the heart of this narrative evolution lies the concept of a "remake". A successful remake allows us to revisit cherished tales through a fresh lens, often reflecting a different era's perspective or harnessing the power of advanced technology. Yet, the question remains, what makes a remake successful? Today, we will delve deeper into this subject, identifying the key ingredients that contribute to the success of a remake.
From the Editor's Desk: 115th Father's day Celebration - When we see Father's day in Hindu context, Nanda Baba is the most vivid figure which comes to the mind. Nanda Baba who was the foster father of Lord Krishna is known to provide love, care and affection to Lord Krishna and Balarama along with his wife Yashoda; Letter’s to the Editor: Mother's Day - Mother is a precious life for their children. Mother is life breath for her children. Mother's lap is the world happiness whose debt can never be paid.
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Monday, 3 June 2024
Episode 47
A friend is compelled to expose a manipulative scheme to prevent another from making a grave mistake. In a frantic bid to save Jojo, Phakamile agrees to a meeting that unbeknownst to her, will seal her fate.
Tuesday, 4 June 2024
Episode 48
A mother, with her son's best interests at heart, finds him unready to heed her advice. Motshabi finds herself in an unmanageable situation, sinking fast like in quicksand.
Wednesday, 5 June 2024
Episode 49
A woman fabricates a diabolical lie to cover up an indiscretion. Overwhelmed by guilt, she makes a spontaneous confession that could be devastating to another heart.
Thursday, 6 June 2024
Episode 50
Linda unwittingly discloses damning information. Nhlamulo and Vuvu try to guide their friend towards the right decision.
Friday, 7 June 2024
Episode 51
Jojo's life continues to spiral out of control. Dintle weaves a web of lies to conceal that she is not as successful as everyone believes.
Monday, 10 June 2024
Episode 52
A heated confrontation between lovers leads to a devastating admission of guilt. Dintle's desperation takes a new turn, leaving her with dwindling options.
Tuesday, 11 June 2024
Episode 53
Unable to resort to violence, Taps issues a verbal threat, leaving Mdala unsettled. A sister must explain her life choices to regain her brother's trust.
Wednesday, 12 June 2024
Episode 54
Winnie makes a very troubling discovery. Taps follows through on his threat, leaving a woman reeling. Layla, oblivious to the truth, offers an incentive.
Thursday, 13 June 2024
Episode 55
A nosy relative arrives just in time to thwart a man's fatal decision. Dintle manipulates Khanyi to tug at Mo's heartstrings and get what she wants.
Friday, 14 June 2024
Episode 56
Tlhogi is shocked by Mdala's reaction following the revelation of their indiscretion. Jojo is in disbelief when the punishment for his crime is revealed.
Monday, 17 June 2024
Episode 57
A woman reprimands another to stay in her lane, leading to a damning revelation. A man decides to leave his broken life behind.
Tuesday, 18 June 2024
Episode 58
Nhlamulo learns that due to his actions, his worst fears have come true. Caiphus' extravagant promises to suppliers get him into trouble with Ndu.
Wednesday, 19 June 2024
Episode 59
A woman manages to kill two birds with one stone. Business doom looms over Chillax. A sobering incident makes a woman realize how far she's fallen.
Thursday, 20 June 2024
Episode 60
Taps' offer to help Nhlamulo comes with hidden motives. Caiphus' new ideas for Chillax have MaHilda excited. A blast from the past recognizes Dintle, not for her newfound fame.
Friday, 21 June 2024
Episode 61
Taps is hungry for revenge and finds a rope to hang Mdala with. Chillax's new job opportunity elicits mixed reactions from the public. Roommates' initial meeting starts off on the wrong foot.
Monday, 24 June 2024
Episode 62
Taps seizes new information and recruits someone on the inside. Mary's new job
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1. 1.0 INTRODUCTION
Name : Starbucks Corporation (NASDAQ: SBUX)
Headquarters : Seattle, Washington, U.S.
Employees : 176,000 in 2008
Revenue for 2008 : US$10.383 billion
CEO : Howard Schultz (Founder of Starbucks coffeehouse)
Starbucks Corporation is an international coffeehouse chain based in Seattle,
Washington, United States. 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. Through the
Starbucks Entertainment division and Hear Music brand, the company also
markets books, music, and film. 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.
Strategic Management PMS 3393 1
2. 1.1 BACKGROUND OF THE COMPANY
1.1.1 Era before Howard Schultz
In 1971, three academics, English Teacher Jerry Baldwin, History Teacher Zel
Siegel and writer Gordon Bowker opened Starbucks Coffee, Tea and Spice in
Touristy Pikes Place Market in Seattle. The three were inspired by entrepreneur
Alfred Peet (whom they knew personally) to sell high-quality coffee beans and
equipment. The store did not offer fresh brewed coffee by the cup, but tasting
samples were sometimes available. Siegel will wore a grocers apron, scooped
out beans for customers while the other two kept their day jobs but came by at
lunch or after work to help out. The store was an immediate success, with sales
exceeding expectations, partly because of interest stirred by the favorable article
in Seattle Times. Starbucks ordered its coffee-bean from Alfred Peet but later on
the three partners bought their own used roaster setting up roasting operations in
a nearby ramshackle building and developed their own blends and flavors. By the
year 1980s the company had four Starbucks Stores in Seattle area and had been
profitable every year. Later on, Siegel left the company and Jerry Baldwin took
over day-to-day management of the company. Gordon Bowker remained as an
owner but devoted most of his time in his Design Firm. In 1981, Howard Schultz,
the vice president of U.S operations for Swedish Maker of stylish kitchen
equipment and coffeemakers decided to pay Starbucks a visit. He was curious
about why Starbucks was selling so many of his company products. He was
impressed with the company management and the quality products the make.
Schultz asked Baldwin whether there was any way he could fit into Starbucks
and it took long time to decide his request. He tried many times till one day he
was given a job of heading marketing and overseeing the retail stores.
Strategic Management PMS 3393 2
3. 1.1.2 Era with Howard Schultz
Howard Schultz spent most of his working hours in the four stores learning the
retail aspects of the company business; Schultz was overflowing with ideas for
the company. His biggest inspiration and vision for Starbucks future came during
1983 when the company sent him for an international house wares show to
Milan, Italy. There he spotted an espresso bar and went to take a coffee. He was
impressed with the coffeehouse services and decided to stay at Milan for a week
to explore all coffee bars and learned as much as he could about the Italian
passion for coffee drinks. He made a decision to serve fresh brewed coffee,
espressos, and cappuccinos in its stores and try to create an American version of
Italian coffee bar culture. He shared his idea with Baldwin and it took nearly a
year to convince Jerry Baldwin to let him test an espresso bar. In April 1984, the
first espresso bar was opened and it was a successful too. Yet Baldwin felt
something is wrong. After Schultz failed to convince Baldwin for the expansion of
business, he left Starbucks in 1985. Schultz started the “Il Giornale” coffee bar
chain in 1985 and the coffeehouse was very successful. In 1987 Starbucks
owner Jerry Baldwin and Bowker decide to sell the whole Starbucks chain to
Schultz's Il Giornale, which rebranded the Il Giornale outlets as Starbucks and
quickly began to expand. Starbucks opened it’s first locations outside Seattle at
Waterfront Station in Vancouver, British Columbia, and Chicago, Illinois, that
same year. At the time of its initial public offering on the stock market in 1992,
Starbucks had grown to 165 outlets. In 2009 The Company plans to open a net of
900 new stores outside of the United States.
Strategic Management PMS 3393 3
4. 2.0 STARBUCKS’ VISION, OBJECTIVES AND MISSION
2.1 Vision Statement
Starbucks vision statement is;
” To establish Starbucks as the most recognized and respected brand in
the world and become a national company with values and guiding
principles that employee could be proud of “
The vision statement clearly describes the dream or the future of the company
that is to be the worlds most well known coffeehouse and also to be the most
appreciated and positively graded brand by all levels of people around the world.
The company also focuses its vision to employee satisfactions, so that the
employees will be happy.
2.2 Objectives of Starbucks
Is to Grow by making employees feel valued
Starbucks approach the employee with good compensation and comprehensive
benefits package. The company beliefs that sharing the company’s success with
the people who made happen will help them think and acts like an owner of the
company.
Is to Recognize that every dollar earned passes through employees’
hands
Starbucks will always appreciate the employee as the revenue which is
increasing every year is by the efficient and hardworking employees. This drastic
increase in profit is not recognized without the support of the employees who
attracts the customers to a long term relationships with the coffeehouse.
Strategic Management PMS 3393 4
5. Use the pays, benefits and opportunities for personal development to
help gain employee loyalty and become difficult to imitate.
Paying scale and fringe benefit package allowed it to attract motivated people
with above average skills and good work habits and also to make the employee
to be loyal with Starbucks.
2.3 Mission Statement
Starbucks Mission Statement is;
“Establish Starbucks as the premier purveyor of the finest coffee in the
world while maintaining our uncompromising principles while we grow.”
The six principles are:
1. Provide a great work environment and treat each other with
respect and dignity.
2. Embrace diversity as an essential component in the way we do
business.
3. Apply the highest standards of excellence to the purchasing,
roasting and fresh delivery of our coffee.
4. Develop enthusiastically satisfied customers all of the time
5. Contribute positively to our communities and our environment
6. Recognize that profitability is essential to our future success.
Strategic Management PMS 3393 5
6. 2.3.1 Analyzing the Mission Statement Component
Starbucks mission statement is needed to be analyzed to see the total number of
mission component it has.
NO COMPONENT YES/NO
1. Customers Yes
2. Products or services Yes
3. Markets Yes
4. Technology No
5. Concern for survival, profitability and growth Yes
6. Philosophy Yes
7. Self-Concept Yes
8. Concern for public image Yes
9. Concern for employees No
This is a good mission statement. This mission statement lacks of 2 components:
Technology and Concern for employees. The company must evaluate whether it
is technologically advanced and even though the company’s vision is concern to
employee, it still have to add it in mission statement.
2.3.2 Proposed Mission Statement
Strategic Management PMS 3393 6
7. Establish Starbucks as the premier purveyor1
of the finest coffee in the world and
also to be established as the most employee valued company while maintaining
our uncompromising principles as we grow together with technological advances.
The six principles are:
1. Provide a great work environment and treat each other with respect
and dignity.
2. Embrace diversity as an essential component in the way we do
business.
3. Apply the highest standards of excellence to the purchasing, roasting
and fresh delivery of our coffee.
4. Develop enthusiastically satisfied customers all of the time
5. Contribute positively to our communities and our environment
6. Recognize that profitability is essential to our future success.
3.0 SITUATIONAL ANALYSIS
1
Purveyor means provider
Strategic Management PMS 3393 7
8. 3.1 External analysis
3.1.1 PEST Analysis
Political
Globalization today has changed worldwide trend of doing business. Companies
find it difficult to survive by relying solely on domestic market. The borders
between various countries are getting invisible. Companies are nowadays
creating business in various countries without boundaries. Advertisements are all
over the world for many products. Company strategists find it not an easy task to
expand the business beyond borders. The basic need for globalization is to learn
the different cultures of the country they plan to start business. Taking all aspects
including tax rates, law and legislation is important in globalization.
Economic
People are nowadays looking for more income to continue their luxurious life.
The number of two income households is getting increased all over the world.
People are looking forward for products which reduce their time to be spent on.
Improved customer service, immediate availability, trouble free operation of
products is becoming more important. Since the world is facing crisis, people are
looking forward for cheap and quality products. Price is becoming priority to
customers. Increase in the inflation rates and increase in unemployment is also a
factor for demand in lower priced products.
Social, Cultural, Demographic and Environmental
According to these analyses, it creates different type of consumer and
consequently needs for different products, different services, and different
strategies. In the view of social, employees should have benefits.
Consequently, after retirement for the group of baby boomer, there must be an
allocation of funds for the retiree to support there families in life long. Provide
Strategic Management PMS 3393 8
9. BARGAINING POWER
OF SUPPLIERS
POTENTIAL ENTRY OF
NEW COMPETITORS
BARGAINING POWER
OF CONSUMERS
POTENTIAL
DEVELOPMENT OF
SUBSTITUTE
PRODUCT
RIVALRY AMONG
COMPETING FIRMS
benefits such as Medicare and Medicaid retirement beneficial. Next, products are
produced in globally must convenience and attractive to be used by any
customers. A cultural connection is created, among customers because
producing the products with quality flexible price for the rich and middle class
family. People are also looking forward for free chemical products. This means
that the product is free from chemical or additional flavor mix and it is made from
natural products.
Technological
Mass communication and high technology are creating patterns of diverse
cultures worldwide. Revolutionary technological changes and discoveries are
having a dramatic impact on organization. Internet is the world information
spread machines that have covered an interaction from one user to another user.
In contrast, advertising through have brought high achievement into marketing
strategy. For example, advertising products into facebook so that the users can
consume on their products .Online purchasing, this option it will create less
hassle to customer for purchasing the products which they needed.
Advancement of the technology can cause the life cycle of the product changed
and increased in the distributing of the products. High technology of the
Machineries can increased the supply of the products while achieve a better
profits for the organization.
3.1.2 Porters five Forces
Strategic Management PMS 3393 9
10. The Radial Diagram above is Porter’s Five-force model. It helps the Company’s
strategists to evaluate the industry growth, market development and organization
Strategy accompanied with the good intuitive judgment. The big corporation firm
such as Starbucks needs a systematic and effective external-audit system
because external forces among foreign countries vary so greatly. The analysis of
the Competitive can be divided into Porter’s Five-Forces. The five forces are as
follows:
1. Potential entry of new competitors
2. Potential development of substitute products
3. Bargaining power of suppliers
4. Rivalry among competing firms
5. Bargaining power of consumer
Strategic Management PMS 3393 10
11. Potential entry for new competitors shows a balance between different
firms competing in a market. It also refers whenever a new partner enter into a
market, they may become threat for one and opportunity for other competing
partners. As all the new entries and existing firms are competing with each other
so the new entry will definitely make an effect on every one transacting in the
market. Starbucks new competitor is the McDonalds’ “McCafe”. There is a great
deal of risk of entry by potential competitors due to the low start up costs.
McDonalds is able to add specialty coffee to their existing services to tap into the
specialty coffee market. There is potential of $125,000 per year in revenue to be
made by each store if they are able to successfully enter the specialty coffee
market.
A potential development of substitute products also develops an
environment of competition in the market among the competing partners. As all
firms want to compete in term of quality and substitute will lasts for longer in the
market if the quality of the substitute will be greater than the existing alternate.
Nowadays coffees are being canned or bottled. The option to buy bottled coffee
is also inexpensive compared to coffee in a mug at the Starbucks store. With the
focus on time management, canned product is the ultimate choice.
Other factors also have a major impact on the substitutes. Collective
bargaining power of supplier is if vendors are less in the market and the
organizations that have to purchase from those vendors is high. The demand for
those suppliers will be more as the firms have to purchase from that less
suppliers. The bargaining power of supplier affects the intensity of competition in
an industry. It is best to have a mutual agreement between the supplier and the
buyer. Starbucks have gone through this situation when the world coffee bean
price increased by the suppliers in 2001. Starbucks have no choice but to buy at
expensive price from the suppliers.
Strategic Management PMS 3393 11
12. Later on, Starbucks decided to prepare an agreement document regarding
to purchase coffee beans at a fixed price. There is more bargaining power for
suppliers of technological innovations such as automated coffee machines, latte
and espresso machines, etc because there are not as many suppliers for such
equipment as there are for coffee beans. Starbucks may pursue a backward
strategy to gain control or ownership of suppliers.
The rivalry among the competing firms is the most powerful of the 5
competitive forces. Starbucks primary competitors were restaurants, specialty
coffee shops, doughnut shop, supermarket and all other stores selling hot and
cold coffees. In 2003, there was 14000 specialty coffee outlets in U.S itself.
Starbucks also faced competition from nationwide coffee manufactures that
distributed their coffee through supermarkets pricing them cheaper compared
with Starbucks. Anyway, Starbucks feels that their excellence services and the
high quality of their coffee is the biggest strength of them. Other than this
Starbucks may lower their prices or add more features in their stores and may
also increase their advertising all around the world.
Last but not least is the bargaining power of consumer. When customer
are concentrated or large or buy in volume, they bargaining power represent a
major force affecting the intensity of competition in an industry. This may arise
when the consumers can inexpensively switch to competing brands. Customers
did not really have bargaining power when it came to premium coffee such as
Starbucks. The sheer scale of Starbucks’ business reduces the bargaining power
of any single group of buyers.
Porter’s Five Forces Table
Strategic Management PMS 3393 12
13. Porters
five
Forces
Details Industry
profitability
Rivalry Among Competing Firm
HIGH
There is intense competition in the coffee
market amongst established coffee shops that
are fighting to get customers. There are local
coffee shops offering specials to lure potential
customers in. Restaurants are opening earlier
and closing later to accommodate customers on
the go. With the 85% North American
customers taking their coffee to go,
convenience is a major factor
LOW
Potential of new competitors
HIGH
There is a great deal of risk of entry by potential
competitors due to the low start up costs.
McDonalds is able to add specialty coffee to
their existing services to tap into the specialty
coffee market. There is potential of $125,000
per year in revenue to be made by each store if
they are able to successfully enter the specialty
coffee market.
LOW
Potential development of
substitute products HIGH
Water is a substitute which is healthy for us and
it is free. The option to buy bottled water is also
inexpensive compared to coffee. With the focus
on healthier living, water is the ultimate choice.
LOW
Bargaining power of suppliers
HIGH
There is more bargaining power for
suppliers of technological innovations such
as automated coffee machines, latte and
espresso machines, etc because there are
not as many suppliers for such equipment
as there are for coffee beans
LOW
Bargaining power of consumers
HIGH
Customers did not really have bargaining power
when it came to premium coffee such as
Starbucks. The sheer scale of Starbucks’
business reduces the bargaining power of any
single group of buyers.
LOW
3.1.3 Competitive Profile Matrix
Starbucks Caribou coffee Gloria Jean’s coffee
Strategic Management PMS 3393 13
14. CRITICAL
SUCCESS FACTOR
WEIGHT
(WT)
RATING WT
SCORE
RATING WT
SCORE
RATING WT
SCORE
Advertising 0.10 4 0.40 4 0.40 3 0.30
Product Quality 0.20 4 0.80 3 0.60 2 0.40
Price
Competitiveness
0.05 2 0.10 3 0.15 3 0.15
Management 0.08 3 0.24 2 0.16 3 0.24
Financial position 0.05 3 0.15 3 0.15 2 0.10
Customer loyalty 0.10 3 0.30 2 0.20 2 0.20
Global expansion 0.15 4 0.60 2 0.30 2 0.30
Employee benefits 0.10 4 0.40 2 0.20 2 0.20
Customer Service 0.17 3 0.51 2 0.34 2 0.34
TOTAL 1.00 3.50 2.50 2.23
Starbucks shown highest score and the second highest were Caribou Coffee and
Gloria Jean’s coffee shows the lowest Score. The competitive profile matrix
(CPM) weighs product quality. The product quality (0.20) and is the most
important item on the list of critical success factors. Starbucks score on this
factor as the highest in comparison to their two chief competitors, Caribou and
Gloria and reflecting a distinctive competitive advantage in the market. Customer
service 0.17, Employee benefits 0.10 and global expansion 0.15 replicates a high
level of importance on the CPM. The advertising weight, 0.10, on CPM does not
reflect a high level in ranking the critical success factors, but does release
valuable information in comparison to their competitors on the CPM. Starbucks
rates and scores the lowest on the price competitiveness factor.
3.1.4 External Factor Evaluation Matrix (EFE)
Strategic Management PMS 3393 14
15. Weight of TWSO=0.6+0.3+0.2+0.30
=1.40/0.45
= 3.11
Weight of TWST=0.45+0.60+0.20
=1.25/0.452
= 2.78
External Evaluation Matrix comprises of 2 lists. Both are important for the
company. It’s identified as the opportunities and threats of the company. The
factors are rated from 1 till 4, where 1 is the lowest and 4 is the highest. The
highest weight is assigned to the most important factors or several very important
factors. The most important factors maybe a threat or an opportunity. In this
case, it is an opportunity.
Strategic Management PMS 3393
Key External Factors
Opportunities Weigh
t
Rating Weighted
Score
Globalization makes it easy to enter
international market
0.15 4 0.60
People are looking for cheap internet
connections.
0.10 3 0.30
Express foods are getting famous to reduce
time to be spent.
0.10 2 0.20
Demand for non-chemical and healthy
products.
0.10 3 0.30
Threats
Increase in the inflation rates creates a
demand in lower priced products.
0.15 3 0.45
Many companies are pricing their products
cheaper to impress customers.
0.20 3 0.60
Increase in hypermarkets and economical
supermarkets
0.10 2 0.20
1.00 2.55
15
16. Based on the key external factors, the most critical factors are that many
companies are pricing their products cheaper to impress customers. Increase in
the inflation rates creates a demand in lower priced products comes along as the
most critical threats to the company.
Anyway, there are still opportunities to increase the growth of the
company. It is known that the factors which carries most weight is the factor that
most to be address. Globalization makes it easy to enter international market is a
good opportunity for Starbucks. Since the total weighted score is 2.78 generally
Starbucks is not so effective in addressing its CFS which exists in its current
environment. It needs to upgrade its effectiveness.
However, this is subject to further analysis of individual weighted score of
opportunities (TWSO) and weighted score of threats (TWST). Based on the
calculation, as shown in the table above, is more effective in addressing the
Opportunities .Still, Starbucks must find the way to reduce the threats to focus on
the future challenges.
3.2 THE INTERNAL ANALYSIS
3.2.1 Financial Analysis
A) Projected Income Statement
Fiscal Years 2003-2005
Strategic Management PMS 3393 16
17. Oct 2
2005
% Oct 3
2004
% Sept 3
2003
% Diff.
between
2005
and
2004
Diff.
between
2004
and
2003In dollar’ 000, except per share amounts
Net revenue:
Retail $5391927 $4457378 $3449624 21 29
Specialty 977373 836869 625898 17 34
Total net revenue $6369300 100 5294247 100 4075522 100 20 30
Operating expenses:
Store operating expenses 2165911 34 1790168 34 1379574 34 21 30
Other operating 197024 3 171648 3 141346 4 15 21
Depreciation and
amortization expenses 340169 5 289182 6 244671 6 18 18
24
60
General and
administrative
development
Income from equity
venture
357114
76745
6
1
304293
59071
6
1
244550
36903
6
1
17
30
Operating income 780615 12 606587 12 420850 10 29 44
Gain on sale of
investment
- - - - - - - -
Net earnings $494467 8 $388973 7 $265355 7 27 47
Net earning per share-
diluted $0.61 0 $0.49 0 $0.34 0 24 44
Analysis summary
The Total net revenue for the Starbucks shows steadily increased from 2003
until 2005.The big increase from 2003 to 2004 could be due to the major
customer demand and customer royalty for the product. Total net revenue can be
divided into retail and specialty. Retail is meant by selling food beverage directly
Strategic Management PMS 3393 17
18. to customer and specialty means customer royalty. The sale for 2004-2005
periods is less then 10% from 2003 to 2004 which is 20%.
Another significant observation from the statement is the operating income. It is
shown that from 2003 to 2005 the income is increased. It could be because of
the performance of the company is going concern. Operating income from 2003
to 2004 is increased by 44%.This drastic increase is because of the purchase of
Seattle's Best Coffee and Torrefazione Italia from AFC Enterprises, bringing the
total number of Starbucks-operated locations worldwide to more than 6,400.
While the shareholder is important to any company, the net earnings per share
are equivalently important to the shareholders. As observed, the net earnings of
share diluted of the company increased from $0.34 in 2003 to $0.49 in 2004,
reaching $0.61 by 2005. This is because of the company performance in
achieving target. The net earnings per share increased by 44% from 2003 to
2004 and increased by 24% from 2004 to 2005.
B) Projected Balance Sheet
Fiscal years 2003-2005
Strategic Management PMS 3393 18
19. In millions, except
For per Share Items
Oct 2
2005
Different
Between
2004
and2005
%
Oct 3
2004
Different
Between2004
and2003
%
Sept 30
2003
Current assets $1209334 (11) $1350895 46 $924029
Current liability 1226996 64 746259 23 608703
Working Capital (17662) 604636 80 335767
Total assets 3514065 4 3386541 22 2776112
Long-term
debt(including
current portion) 3618 17 4353 (14) 5076
Shareholders equity $2090634 (15) $2470211 19 $2068689
Analysis summary
As observed in the above table current assets increased for 2003-2004 by 46%.It
could be because of company activations and reloads on Starbucks Cards, but
for the year 2004-2005 is dropped by 11% because of the advertising Starbuck
coffee
Besides, the shareholder Equity increased due to the increases in net earning for
the company. While the shareholder equity decreased for about 15% in
comparison of 2004-2005. However shareholder equity increased by $2090634
in 2005 it’s because of the stability net earning.
Long term debt shown in the table dropped 14% from 2003 to 2004 previously it
was known company’s net earning increases, thus it could mean that the
Strategic Management PMS 3393 19
20. company has extra earnings to pay off debt. Since this is a long term debt, the
amount is tremendously big and by reducing it by 14% within a year shown that
the development new shops really has a big impact on the company’s
performance.
C) Financial Ratio
1. Liquidity ratios
2005 2004
Strategic Management PMS 3393 20
21. Current ratio = $1209334 = $1350895
$1226996 $746259
= 0.99 x = 1.81 x
The Current ratio is another test of a company's financial strength. It calculates
how many dollars in assets are likely to be converted to cash within one year in
order to pay debts that come due during the same year. Liquidity can be
measured through current ratios and quick ratio. An acceptable current ratio
varies by industry. The more liquid the current assets are, the smaller the current
ratio can be without cause for concern. For most industrial companies, 1.5 is an
acceptable current ratio and Starbucks current ratio is 0.99x for the year 2005
compared to 1.81 x for the year 2004. This can be considered as a decline and
should be seriously concerned and still enough to cover up current liability or
short-term debt.
2. Leverage Ratio
2005 2004
Long term
Debt-to-total-assets ratio
= $3618 = $4353
$2090634 $2470211
= 0.0017 = 0.0018
The Debt-to-total-assets ratio Shows the proportion of a company's assets which
are financed through debt. If the ratio is less than one, most of the company's
assets are financed through equity. If the ratio is greater than one, most of the
company's assets are financed through debt.
Companies with high ratios are said to be "highly leveraged," and could be in
danger if creditors start to demand repayment of debt and for Starbucks, the ratio
is very low at both years. The ratio is 0.0017 at 2005 and 0.0018 for the year
Strategic Management PMS 3393 21
22. 2004 respectively and the ratio drop slightly. This means that most of the
Starbucks assets are financed through equity and is safe if creditors start to
demand repayment of debt.
3. Activity Ratio
2005 2004
Fixed assets turnover = $6369300 = $5294247
$2304731 $2035646
= 2.76x = 2.6x
2005 2004
Total assets turnover = $6369300 = $5294247
$3514065 $3386541
= 1.81x = 1.56x
Activity ratios show how effectively a firm’s assets are being managed. Activity
analysis, together with the leverage ratios are the key factors in determining
profitability. Fixed Asset turnover ratio is one of the measures of activity. Another
activity measure is the Total Asset turnover ratio. Based on the above tables,
Starbucks has a bigger asset turnover which means that the company is using its
assets more efficiently than other competitors in the industry. Company’s “no-
inventory” policy has significant effects on its superiority. In both ratios , there is a
slide increase which shows the company’s efficiency on using assets has
increased too.
4. Profitability Ratios
2005 2004
Strategic Management PMS 3393 22
23. Gross Profit Margin = $6369300-2605212 = $5294247-2191440
$6369300 $5294247
= 0.59 (59%) = 0.58 (58%)
Profitability ratios measure and explain the ability of the firm to generate income.
Gross profit margin has increased. This shows that the company has a greater
margin to cover the operating expenses and yield a profit.
2005 2004
Net Profit Margin = $494467 = $388973
$6369300 $5294247
= 0.078 (7.8%) = 0.073 (7.3%)
There is a small increase in the profit after tax. This shows that the company’s
profit has increased. Yet, the percentage of profit compared with the sales is
small which is 7.8% from total sales is the net income of year 2005.
2005 2004
Return on Total Asset( ROA) = $494467 = $388973
$3514065 $3386541
= 0.14 (14%) = 0.12(12%)
The ratio is considered an indicator of how effectively a company is using its
assets to generate earnings before contractual obligations must be paid. The
greater a company's earnings in proportion to its assets, the more effectively that
company is said to be using its assets. Starbucks ROA ratio shows that in year
2005 the efficiency of using assets to generate earning has increased from 12%
to 14%.
2005 2004
Return on equity ( ROE) = $494467 = $388973
Strategic Management PMS 3393 23
24. $2090634 $2470211
= 0.24 (24%) = 0.16 (16%)
Return on equity measures a corporation's profitability by revealing how
much profit a company generates with the money shareholders have
invested. The ROE is useful for comparing the profitability of a company to that
of other. Starbucks shows a drastic increase from 16% to 24% for the year 2005.
This shows that the company is generating a good profit from the shareholders
money. This will, increase the shareholders amount in future.
EPS
Year 2005 2004
Earning per share $0.61 $0.49
The earnings per share are a good measure of profitability. When compared with
EPS of similar companies, it gives a view of the comparative earnings or
earnings power of the firm. EPS ratio calculated for a number of years indicates
whether or not the earning power of the company has increased. Starbucks EPS
has increased and thus showing that the earning power has increased.
3.2.2 Internal Factor Evaluation Matrix
Strategic Management PMS 3393 24
25. Key Internal Factors Weight Rating Weighted Score
Strengths
1. Huge market expansion to China,
Brazil, India and Russia
0.21 4 0.84
2. Provide a great work environment 0.10 4 0.40
3. Apply the highest standards of
excellence in services.
0.10 3 0.30
4. Starbucks has monopolistic
advantages over its competitors.
0.10 3 0.30
5. Purchased Ethos healthy water for
8 million and also does not use
chemical flavor for coffee.
0.12 4 0.48
6. Launching the sales of
Frappuccino in Japan and Taiwan.
0.08 3 0.24
Weaknesses
1. Price of coffee is high at Starbucks 0.10 2 0.20
2. less marketing and advertising its
product
0.07 2 0.14
3. Starbucks products are not
available at supermarket
0.12 2 0.24
TOTAL 1.00 3.14
TOTAL WEIGHTED SCORE FOR STRENGHT / TOTAL SCORE FOR STRENGHT
TWSS: 0.84+0.40+0.30+0.30+0.48+0.24 /0.21+0.10+0.10+0.10+0.12+0.08
: 2.56/0.71
: 3.60
TOTAL WEIGHTED SCORE FOR WEAKNESS / TOTAL SCORE FOR WEAKNESS
TWSW: 0.20+0.14+0.24 / 0.10+0.07+0.12
: 0.58/0.28
Strategic Management PMS 3393 25
26. : 2.00
Internal Factor Evaluation (IFE) Matrix is a summary step in conducting an
internal strategic-management audit. This strategy-formulation tool summarizes
and evaluates the major strengths and weaknesses in the functional areas of
business, and it’s also provides a basis for identifying and evaluating relationship
among those area. Based on key Internal Factor, the most advantage factor is
Starbucks' company is expanding its market to china, Brazil and Russia. These
are very big markets and will definitely increase its growth.
The strategic of Starbucks' services provided, quality of coffees and management
of the company makes strength became as very important factor. It is because
Starbucks' provide a great work environment and treat each other with respect
and dignity. Besides of that, other than that, Starbucks Purchase Ethos healthy
water for 8 million and also does not use chemical flavor for coffee. This is also a
great strength to it as its coffee’s are free from chemical flavors and it blends and
mix the real hazelnuts to the coffee.
Since the total weighted score is 3.14 generally Starbucks is effective in
addressing its CFS which exists in its current environment. But still, its weakness
is also high. 2.00 is very high, this means that Starbucks is still weak in
identifying its weakness.
Since Starbucks' has its own strength to increase the growth of the company,
there is also has weaknesses. The prices of coffees sold at Starbucks are higher
compared with other stores. This is a major strength for other competitors.
Other than that, Starbucks does not interest in marketing its products through
advertisings a lot. It focuses on its quality coffee which has the power to attract
customers.
Anyway, this is subject to further analysis of individual weighted score of
strength (TWSS) and weighted score of weakness (TWSW). Based on the
calculation, as shown in the table above, is more effective in addressing the
Strategic Management PMS 3393 26
27. Strength, still, Starbucks' must find the way to overcome weaknesses to focus on
the future challenges.
.
Strategic Management PMS 3393 27
28. 3.3 TOWS Analysis
Strategic Management PMS 3393
STRENGTHS
S1.
Huge market expansion to China,
Brazil, India and Russia
S2.
Provide a great work environment
S3.
Apply the highest standards of
excellence in services.
S4.
Starbucks has monopolistic advantages
over its competitors.
S5
Purchased Ethos healthy water for 8
million and also does not use chemical
flavor for coffee.
S6
Launching the sales of Frappuccino in
Japan and Taiwan
WEAKNESSES
W1
Price of coffee is high at
Starbucks
W2
less marketing and
advertising its product
W3
Starbucks products are
not available at
supermarket
OPPORTUNITIES
O1.
Globalization makes it easy to enter
international market
O2.
People are looking for cheap internet
connections
O3.
Express foods are getting famous to
reduce time to be spent
O4.
Demand for non-chemical and
healthy products
SO Strategies
S1,S3,O1,O2,O3
Do advertisements about the FREE
internet connections and the excellent
service they provide.
S5,O4
Starbucks shall increase the healthy
products into market as the demand
for it is high.
WO Strategies
W1,W2,O1,O3
Reduce the price and Advertise the
products all over the places.
W1,W3,O3
Do R&D to sell products at
supermarkets without reducing the
quality with cheap price
28
29. Strategic Management PMS 3393
ST Strategies
S2,S3,S4,T1,T2
Starbucks needs to change its
market strategy by reducing the
price to compete with the
competitors.
WT Strategies
W1,W2,T1,T2
Create new complementary products
which contain good quality and lower
price to attract more customers.
W3,T3
Starbucks needs to analyze the way
to reduce the risks of selling its coffee
products at supermarkets as
customers are demanding for it.
THREATS
29
T1.
Increase in the inflation rates
creates a demand in lower
priced products.
T2.
Many companies are pricing
their products cheaper to
impress customers.
T3.
Increase in hypermarkets and
economical supermarkets
30. 3.4 Space Matrix
FINANCIAL STRENGTHS
RATING
1. A Starbucks asset is financed through equity and is safe if creditors
start to demand repayment of debt. Long term debt-to-equity ratio is
only 0.0017.
5
2. Starbucks Return on Asset ratio shows that in year 2005, the
efficiency of using assets to generate earning has increased from
12% to 14%.
4
3. Starbucks net income increased to $494.5 million in the year 2005
compared with $388.9 million in 2004. There is an increase of 21.3%
in the income of Starbucks.
4
13
INDUSTRY STRENGTHS
RATING
1. Starbucks Coffee Liqueur was the top selling new spirit product,
grossed sales over $8million annually. 4
2. Starbucks agreed to serve Starbucks Coffee in all United flights.
3
3. “Starbucks Everywhere” approach has increased foot traffic for all the
stores in area. This makes customers easy to fine Starbucks all the
places in town.
5
12
Strategic Management PMS 3393
+6 = best +1= worst
30
31. ENVIRONMENTAL STABILITY
RATING
1. Starbucks products prices are high compared with competing coffee
houses. They price their products several dollars below then Starbucks
price.
-4
2. Demand for Starbucks products to be supplied in supermarkets
increase. But, doing that will put Starbucks business in risk as
customers don’t know the way to brew the coffee.
-2
3. Increase in world coffee bean price in 2001, forced Starbucks to
increase its beverages and coffee sold at retail. -3
-9
COMPETITIVE ADVANTAGES
RATING
1. Starbucks coffee and beverages are high in quality brewed by well
trained employees. -1
2. Starbucks teamed up with T-mobile WI-Fi service to provide internet
access to all over Starbucks Coffeehouse -1
3. There are 16,120 Starbucks coffeehouses worldwide and plan to open
another 1800 stores. -2
4. Starbucks is a customer oriented Coffeehouse.
-2
-6
Strategic Management PMS 3393
-1 = best -6= worst
31
32. CONCLUSION
FS Average is 13/3 = 4.3
IS Average is 12/3 = 4.0
ES Average is -9/3 = - 3.0
CA Average is -6/4 = - 1.5
Directional Vector Coordinates: X- axis: 4.0 + (-1.5) = 2.5
Y- axis: 4.3 + (-3.0) = 1.3
SPACE MATRIX
FS
+6 -
CONSERVATIVE AGGRESSIVE
+5 -
+4 -
+3 -
+2 -
+1 - (2.5, 1.3)
CA IS
I I I I I I I I I I I I
-6 -5 -4 -3 -2 -1 0 +1 +2 +3 +4 +5 +6
-1 -
-2 -
-3 -
DEFENSIVE -4 - COMPETITIVE
-5 -
-6 -
ES
Starbucks must pursue a strategy that is Aggressive. The strategies that include in aggressive strategies is
backward integration, forward integration, horizontal integration, market penetration, market development,
product development and diversification which include related and unrelated diversification.
Strategic Management PMS 3393 32
33. 3.5 BCG Matrix
HIGH MEDIUM LOW
HIGH
MEDIUM
LOW
SUMMARY
The Boston Consulting Group (BCG) matrix is enhancing a multidivisional firm’s
efforts to formulate strategies. This matrix allows a multidivisional organization to
manage its portfolio of businesses by examining the relative market share
position and the industry growth rate each division relative to all other divisions in
the organization. Starbucks are measured to identify the stores strategic position
in the Boston Consulting Matrix. The BCG matrix, were included 4 divisions
which is Question Marks, Star, Cash Cows, and Dogs. In division quadrant I,
shows low relatives market position, high growth industry. Firms cash needs are
high and cash generation is low.
Strategic Management PMS 3393 33
Backward, Forward, or
Horizontal Integration
Market Penetration
Market Development
Product Development
STARS
II
STARBUCKS
Market Penetration
Market Development
Product Development
Divestiture
QUESTION MARKS
I
Product Development
Diversification
Retrenchment
Divestiture
CASH COWS
III
Retrenchment
Divestiture
Liquidation
DOGS
IV
34. This division decides to strengthen on pursuing an intensive strategy. Division
quadrant II, identifies best long-run opportunities for growth and profitability. Star
division is high relative market share and high industry growth rate. In convince
of substantial investment to maintain or strengthen their dominant positions. Next
in quadrant III, Cash Cows with high relative market share position but compete
in a low growth industry ,while this division will be managed to maintain strong
position for as long as possible.
Finally, in quadrant IV Dogs have low relative market share position
and compete in a slow or no market growth industry. This divisional are weak
into internal and external position and often liquidated, divested or trimmed down
the retrenchment. Retrenchment can be best strategy to pursue because many
dogs bounced back, after strenuous asset and cost reduction, to become viable,
profitable divisions. In contrast, the highest scored is 3.5, and it determinant that
relative share position is HIGH.
Besides that, Starbucks Income Statements shows the Net Revenue
were consecutively increased between the years 2003 until 2005. The revenues
on the year 2003 is $4075,000, while $2191,000 in year 2004, $6369,000 in year
2005. Moreover, the industry sales growth rate between year 2004 and 2005is
56.3%.It determinant HIGH position of industry sales growth rate. In conclusion,
Starbucks were identified in STAR division. This division represents the
Starbucks long-run opportunities for the growth and profitability. While, this
division is in high relative market share and industry growth rate and
subsequently they received substantial investment. The divisions are forward,
backward, and horizontal integration, market penetration, market development
and product development are will be considered.
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35. 4.0 MAJOR ISSUES
4.1 Corporate Level
Starbucks’ coffees price much expensive than other market competitor
product, it is because Starbucks’ purchased only high quality coffee
beans, This will increase the quality of the product as well as the price of
the product. As Starbucks have many competitors, this will be an
advantage of the competitors. People are also nowadays looking forward
for cheap products. Even though Starbucks has its own customer who
spends their money to get the quality coffee, it still has to look for the other
people who are running to the next store.
4.2 Functional Level
Starbucks have poor marketing strategy on advertising. They prefer to
build the brand by promoting the drinks cup-by-cup with customers. In this
way, the advertisement ends until they drink the coffee, while some
groups of people willing to support the advertisement for timing just to
taste the drink for free. The chances to attract valuable customers are very
low. Therefore, it also affects gross profit of Starbucks, the study does not
show drastic increased between year 2004 and 2005. The percentages of
the profit increased from 58% in year 2004 to 59% in year 2005. This
would because of lack of marketing strategy in advertising. The company
spent total of $87.7 million on advertising in fiscal 2005, up from $49.6
million in fiscal 2003. It show Starbucks does not emphasize on funding
the money into advertisement.
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36. Starbucks does not emphasize in distributing their products to
supermarkets. They are very concern on quality of the coffee; if the
coffees were packaged into plastic bags the mixing of the beans will not
be as accurate. It will cause the taste of the coffee will be different and the
coffee beans would not be fresh as grinded beans. In addition, the
organization did not show a proper guideline to mix the coffee to
customer. Therefore, the packaging coffee in supermarket did not have
same taste as coffee which mixed in the Starbucks. Customer’s
satisfaction on the coffee will badly affect and as well as demand of the
Starbucks coffee.
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37. 5.0 RECOMMENDATION
5.1 CORPORATE LEVEL
Reduce their price by producing a new product of coffee using cheaper beans or
may come out with special discounts promotions to increase the sales.
Starbucks’ coffee is world’s preeminent global brand. Starbucks’ should decrease
price of the coffee to face competition from nationwide coffee manufactures.
They also can do promotion or promote packages of coffee set to impress
customers, such as McDonald promoting their product. If the challenge was met
successfully, in all likelihood company’s best years lay on the strategic road
ahead.
5.2 BUSINESS LEVEL
Large companies like Starbucks can effectively pursue Focus-Based Strategy in
conjunction with differentiation or cost leadership based strategy. Being a lower
cost store will increase the difference between Starbucks and other stores. At
present, Starbucks competitors are attempting to specialize in the coffee
business, therefore Starbucks must pursue focus strategy to increase its
strength.
5.3 FUNCTIONAL LEVEL
Advertisement can develop through internet that services convinced for users to
access, give the brochures, do road shows, so that public come to know more
about Starbucks details. Market penetration and market development will help to
increase the sales and reduce the weakness in Starbucks. Distribute packaging
of Starbucks instant coffee will definitely increase the sales as it is a demand
from customers.
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38. Introducing accurate mixing level of the coffee in a tea bag style will increase the
sales at supermarkets. Packing it together with the guidelines on mixing coffee
beans and sugars with milk to result same taste of coffee will never reduce the
quality of the coffee. Providing proper steps to customer will make a better quality
of coffee indeed.
.
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39. 6.0 CONCLUSION
Starbucks success is achieved through a few factors.
Outstanding Quality of the coffee brewed
Excellent service provided at the stores
Fast growth of new stores all around the world
These factors not only have increased the sales but also the reputation among
the coffee lovers. Starbucks encounters aggressive competition in all areas of its
business activity. The market for each of their business segments are
characterized by vigorous competition among major corporations with long
established positions and a large number of new and rapidly growing firms.
Anyway, as Starbucks have a good financial capacity with good strategies; it can
overcome all the competitors to shine high as the first class coffee purveyor.
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