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Starbucks Strategies - A Brief Overview


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Starbucks Strategies - A Brief Overview

  1. 1. 1<br />Never be without great coffee<br />
  2. 2. 1<br />
  3. 3. Changing Strategy at Starbucks<br />By Group 7:<br />Akhil Bheda GMAY08IB085<br />BandhanKabli GMAY08IB090<br />Himanshu Vyas GMAY08BM066<br />Kunal Sidhwani GMAY08BM069<br />Swati Sharma GMAY08IT051 <br />Uphar Gandhi GMAY08WM151<br />
  4. 4. The Article<br />“The coffee consumption landscape is ripe for disruption”<br />Howard Shultz, CEO, Starbucks<br />
  5. 5. Starbucks – The History<br />Opened by 3 partners in 1971 in Seattle, US<br />Inspired by Alfred Peet who ran high quality coffee beans and equipment company called Peet’s<br />The original store is still open<br />In 1984 bought Peet’s<br />In 1987 sold the chain to Schultz’s II Giornale which rebranded the chain as Starbucks<br />Came with an IPO in 1992<br />Current CEO Howard Schultz<br />
  6. 6. Starbucks – Over the years<br />Largest coffee house company in the world<br />Based at Seattle, USA<br />Owns more than 16000 stores in 48 countries<br />Operates through company owned retail stores<br />Sells drip brewed coffee, espresso based hot drinks, other hot and cold drinks, snacks and other items like mugs.<br />Starbucks Entertainment division and Hear Music<br />Starbucks mission<br />
  7. 7. Reflecting the old strategy<br />
  8. 8. Old Strategy<br />Expand aggressively<br />Opened almost 1 store each working day in the last 2 decades<br />Associated itself as a premium brand<br />Focused on high end, upper middle class customer<br />Promoted itself as a status symbol<br />Sold only pricy lattes and other “affordable luxuries”<br />Moved into selling some premium brands like Frappuccino<br />
  9. 9. Reverberating a Change<br />
  10. 10. Changing Strategy<br />Comments from the current CEO – “This is a big move for us – an opportunity to reinvent a category, create new rituals and grow our customer base.”<br />Closure of cafes from low revenue markets<br />Retrenchment<br />Focus on new customer prices<br />Product Development – Via instant coffee, bundled products<br />Lowered the price of the products<br />Concentric diversification into new markets<br />
  11. 11. Actions taken in 2008<br />A plan to close approximately 600 underperforming stores in the US market, of which 205 were closed as of fiscal year-end<br />Restructuring the Australia business by closing 61 stores and focusing on 23 stored in 3 metros<br />Rationalize infrastructure usage<br />Introduce new beverage platforms like breakfast food offerings, bakery and chilled foods, and a new everyday brewed coffee<br />
  12. 12. Bibliography<br /><br /><br /><br /><br /><br /><br />
  13. 13. Thank You!!<br />