...CASE 1 – 1 Starbucks - Going Global Fast ------------------------------------------------- ------------------------------------------------- Didem Akdemir ------------------------------------------------- Mignon Pemberton ------------------------------------------------- Yunella Webb ------------------------------------------------- ------------------------------------------------- 2 IBMS Feb11 Table of Contents 1. Summary 2 2. Questions 4 3. Sources 6 1. Summary Starbucks’ success Starbucks is one of the largest chains of coffee shops in the world. They started their business in the early 80s as a tiny chain of Seattle coffee shops, grew rapidly in the 90s and now own 5,689 coffee shops in 28 countries. This chain of coffee shops is very well managed by a well-seasoned management team popularly known as H2O, because of Howard Schultz (Chairman and Chief Global Strategist), Howard Behar ( Head of North American Operations), and Orion Smith (CEO). This year (2002) it had about 1200 and it was still in the early stages of its plan to colonize the world. Problem Although, the company has expanded enormously, since it went public in 1991, this growth can not last much longer. New profits in the saturated home market are difficult to make. Although, there are still 8 states with no Starbucks stores in the U.S. One outlet for every 9400 people is the norm according to Starbucks and this has not been reached yet. The company admits that while...
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...Running Head: Starbucks Starbucks Case Analysis Victor F. Hogan The George Washington University PSPR 6210: Corporate Social Responsibility July 15, 2012 Starbucks serves a total of four billion paper cups to their customers each year. During Earth Month 2010, Starbucks created a way for their customers to make an environmental impact and try reusable mugs. If one Starbucks customer switches to reusable mugs, then that one person saves seven trees each year. The Starbucks public relations team developed an integrated communications campaign focused around five key phases that underscored the company’s support for environmental responsibility and a premier customer experience. Through research done by Edelman, Starbucks found that the number one issue consumers’ care about is the environment, and nearly two-thirds of consumers are more likely to trust brands that are socially and ethically sound. Starbucks found that through their website, MyStarbucksIdea.com, that recycling and cups were the top socially responsibility ideas. With the millions of people that visit Starbucks’ 16,000 locations around the world, the company decided that they would put their mass appeal to good works and help along with the green movement. Starbucks recycled cup promotion in recognition of Earth Month 2011 was meritoriously conveyed due to the corporations strategic “green” initiatives. The company...
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...Valerie Bauer Case #1 Starbucks Due: 9/23/12 1. Based on the case information and your personal experiences, list at least five things you know about Starbucks. This list offers you some idea about your cognitions concerning the coffee shop chain. After reading the case I have a greater amount of knowledge about Starbucks. From my personal experience and from reading the case I know that starbucks is a fortune 500 company since the year of 2003. I know that Starbucks has expanded to over 16,000 stores worldwide. From reading the case I learned that Starbucks is trying to expand internationally and that they are trying to have 500 stores operating in Asia. I also know that starbucks not only sells coffee but they sell hot sandwiches, bakery items, a variety of games, and other great products. I also learned from reading the case that 63% of their employees are women. Cognition refers to what a person thinks and believes about a particular product. Consumers develop knowledge, meanings, and beliefs based on their experiences (Peter & Olson, 2010, P 21). These things that I know about Starbucks are based on my cognitions about this coffee shop chain. Knowledge about a company is important to me so facts such as Starbucks being a fortune 55 company since 2003, having over 16,000 stores, and trying to have 500 stores in Asia would be things that I would remember and find fascinating. My personal memories and experiences of going to Starbucks I always remember them being...
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...Case Study: STARBUCKS 1. Many of the same environmental factors, such as cultural factors, that operate in the domestic market also exist internationally. Discuss the key cultural factors Starbucks had to consider as it expanded into China. As Starbucks expanded into China, they had to consider such cultural factors as: how the vast population of tea drinkers would take to the “new” palate of coffee, what generation they were appealing to; the older generation who are more collective, or the younger generation who is more individualistic? Starbucks marketed themselves as “China’s new sophistication,” which to their benefit took off in great response. The younger generation gravitated towards Starbucks and its Western belief in individuality. It still gathers both generations because its popularity and function is a place outside of the house/school/work that people like to gather, hang out, and been seen. 2. Discuss the key political and legal factors Starbucks had to consider in the Chinese marketplace. What are the risks of entering a country with these factors? What changes have occurred in China’s political and legal structure to the advantage of foreign companies? Entering the Chinese market, Starbucks had to consider the political facts of the country being a one-party dictatorship. By China being dominate in its set ways, it was a prevalent risk and factor that could affect the business overnight and without warning. Before 2001 when Beijing entered the...
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...MG Case 1.1 Starbucks – Going Global Fast Starbuck Corporation is an American coffee company and coffeehouse-chain founded in 1971 in Seattle, Washington. In 1987, the three owners sold the Starbucks chain to Howard Schultz, a former employee, and quickly began to expand, going from 17 coffee shops in Seattle to over 20,891 shops in 62 countries: United States, Canada, Japan, China, United Kingdom, South Korea, Mexico… Since 1987, Starbucks has opened on average two now stores every day. However Starbucks is now facing some challenges. The sales have dropped from $10.4 billion in 2008 to $9.8 billion in 2009. The corporation had to close 475 stores in the United States in 2009 to reduce costs. The market is saturated across the United States and Canada, and Starbucks is now facing employee’s dissatisfaction. 1. The controllable elements are about the firm characteristics and research and development. The firm’s characteristics are: the products (Hot and cold beverages, snacks, pastries…), the price (premium prices for their products), promotion (the firm has saved a lot of marketing cost by relying on word of mouth), channel of distribution (20,891 outlets in 62 countries which shows that Starbucks has good controlled over its channel of distribution). Research and development has an important part of the firm. It has controlled over its R&D process, it has installed automatic espresso machines to increase the speed of service and also offered the prepaid card so...
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...Planet Starbucks: Caffeinating the World Starbucks successfully operated in North American based on its expansion and its unique experience it offered its customers. The success first lies in its size and locations. Starbucks has approximately 6, 294 coffeehouses in North America alone. Many of Starbucks locations in North America are spotted in company owned stores like: high traffic, high- visibility settings such as retail centers, office buildings and university campuses. It also sells products through non-company operated retail stores such as hotels, airlines and restaurants. Not only is location a successful aspect for North America, but also its product variety. Not only does Starbucks sell whole-bean coffees, but they also have rich-brewed coffees, Italian-style espresso drinks, cold-blended beverages, and premium teas. Starbucks has equally worked hard to expand the number of retail stores as well as product innovations and service innovations. An example would be that Starbucks launches new products on a regular basis like they launch a new hot beverage for every holiday season. The three components Starbucks focussed on are: the coffee, the service and the atmosphere. Starbucks takes pride in offering the highest- quality coffee in the world sourced from Africa, Central and South America and Asia- Pacific regions. For service, Starbucks tries to uplift the customers experience every time they enter the store by trying to recognize the customers drink or how they...
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...Company Background The first Starbucks opened in Seattle,on March 30, 1971, by three partners Jerry Baldwin, Zev Siegl, and Gordon Bowker. The three were inspired to sell quality coffee beans and equipment. The first Starbucks cafe was located at 2000 Western Avenue from 1971–1976. This cafe was later moved to 1912 Pike Place Market. In 1987, the original owners sold the Starbucks chain to former employee Howard Schultz, who rebranded his Il Giornale coffee outlets as Starbucks and quickly began to expand. In the same year, Starbucks opened its first locations outside Seattle in Canada. The first Starbucks location outside North America opened in Tokyo, Japan, in 1996. Currently Starbucks has over 20,000 stores in 65 countries. Starbuck’s growth Starbucks started off as a shop selling coffee beans and equipment in this section we will analyze Starbuck’s concept for growth and how it has become one of the biggest coffee shop in the world. After, Schultz acquisition of Starbucks in 1987, he made his dream became a reality by expanding Starbucks worldwide. Initially Schultz planned to open 125 stores in 5years. 1. Company owned store (No franchising) 2. Store design and ambience (Created its own in-house team of architects and designers to ensure that the store will have the right image) 3. “Starbucks everywhere” - Cannibalization (centralized buying) Management believes although blanketing cities with Starbucks store, new store might draw 30 percent of...
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...Case 1: Starbucks 1. Several factors that accounted for the success of Starbucks, the first being its excellent coffee. Starbucks prided itself on its premium, high-quality, coffee; an alternative to normal coffee that was not offered much in the 90s. Its second factor to success is the company’s superior customer service philosophy, which they defined as “customer intimacy” including everything from recognizing a customer and recognizing their drink to customizing a drink to a customer’s preferences. Lastly, the physical environment of the coffeehouses (furniture, décor, lighting, layouts), were used to create an up-scale and inviting ambience that encouraged lounging. These factors of success along with appealing to its target customers of white-collar, serious coffee lovers who were affluent, well-educated, often female and typically between the ages of 25 and 44, helped create a not only a brand but a coffee culture as well. Starbucks’ coffee shops developed an upscale, sophisticated, classy brand image. It was where a customer could indulge in the affordable luxury of drinking the best coffee on the market in a modern and social environment. 2. Starbucks in 2002 was very different than the Starbucks of the 1990s, mostly as a result of the company’s astonishing growth. The two main differences coming from the company’s expansion are its accessibility and customer base. With now with over 5,000 stores and experiments with new retail formats like drive-troughs, Starbucks’...
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...Mr. Howard Schultz, the chairman and CEO of Starbucks Corporation is faced with some immediate and long term challenges in the year 1996. He needs to keep up the brand image of Starbucks, beat the competition, foray into new horizons for expansion, improve on the real estate strategy while maintaining the ‘coffee ‘ experience Starbucks is known for. Immediate issues 1. MacDonald is petitioning for a contract to serve Starbucks coffee. Mr. Howard is sceptical that granting this contract will dilute the brand image of Starbucks. While this can boost revenue in the shorter term, this can also lead to loss in clientele and reputation. Should Mr. Howard agree to the proposal? 2. Starbucks has a goal of having 2000 stores by the year 2000. The number of ‘A’ sites in market has decreased and the task of “street sniffers” is becoming increasingly difficult. The immediate challenge is to expand in different regions of the city. Should he put laser focus on Doppio strategy ? Basic Issues 1. Given Mr Howard’s bad experience at the University store , Starbucks needs to take an active look at the speciality agreements with retailers , restaurants and service providers. They are a big source of revenue generation but any compromise either on the coffee quality or coffee ‘experience’ could lead to loss in clientele, loss of brand and a hard earned niche market segment. 2. The regional competitors such as Second Cup in Canada and Best coffee in Seattle are eating the Starbuck’s...
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...Technology School of Business A350A0050 Business Research Methods Case Starbucks stock value 2006-2010 ”Fall and rise” Contents Introduction 3 Theoretical framework 5 SWOT 5 Strategic Formulation 6 Porters 5 forces model 8 Problem analysis – Case Starbucks 9 Factors leading to the decline in stock price between 2006-2009 9 Starbucks analysis using the 5 forces model 10 Rivalry among existing competitors 10 Threat of substitution products and services 11 Bargaining power of suppliers 11 Bargaining power of buyers 13 Threat of new entrants 14 Summary of the five forces analysis 14 SWOT analysis 15 Strengths 15 Weaknesses 16 Opportunities 16 Threats 17 Customer Value, Satisfaction and Loyalty 18 Generic strategies from Starbucks’s point of view 18 Conclusions 20 References 21 Introduction In the year 2000, Howard Schultz, a long term director of Starbucks left his position as the CEO. Starbucks was on a steady course and had its stock price on the rise until the year 2006. (lähde haastattelu) The global financial crisis hit the coffee giant relatively harder than other companies in the business sector (lähde annual report 2010). In early 2008, due to the poor performance of Starbucks, Howard Schultz felt compelled to return in to the CEO’s position, as Schultz mentioned in his interview for Harvard Business Report in 2010 “The leadership had failed the 180,000 Starbucks people and their families.” (lähde haastattelu). The global...
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...Background: First established in 1971, but the real and actual Starbucks was created in 1987 when an ex employee bought the company after creating one by his own and persuading some investors to buy it. Howard Schultz was the entrepreneur that took the company since its start in Seattle to the actual global enterprise that is today. The innovation has been always in the way of Starbucks, even is seen on its logo that have changed trough the years to give the company an actual image; the first one had a twin-tailed mermaid, and have change to the actual logo know in the modern world. When the company started as Starbucks Corporation, had 17 stores and soon the company started to open more and more stores in the United States, but when the company opened the first store out the United States had already 1014 stores in America; the company also started to purchase companies in different countries in order to enter in new markets, a very well directed strategy of expansion. The rise of this company has been as successful that in the 90’s invested on the stock and had actions, which also gave them to the employees; this behavior was established by Howard Schultz, the owner and director, and he gave an explanation of his actions, he said: "He (my father) was beaten down, he wasn't respected," Schultz said. "He had no health insurance, and he had no workers' compensation when he got hurt on the job." So with Starbucks, Schultz "wanted to build the kind of company that my father...
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...Starbuck Case Analysis Starbuck Case Analysis Company Statement Starbucks, one of the most successfully coffee companies in the world, has been committed to ethically sourcing and roasting the highest-quality coffee in the world. And Howard Schulte, the CEO of Starbuck, explained Starbuck’s long vision as: an idea which was to create a chain of coffeehouses that would become America’s “third place.” Integrated view, Starbuck’s strategic intent captures the essence of winning. Starbuck want to put “high-quality coffee” into “the third place of customers”. The “product” and the “customer” are the two main essences that lead a company to success. As long as you serving the best product to satisfy and attract customers, you will be the winner in the market. In addition, Starbuck‘s strategic intent not only set the long-term goals for the company to achieve, but also provides consistency to short-term actions. “We need to introduce a new hot beverage this quarter.”, “We need to self-cannibalize the store in West Palm Beach today”: both of the two short-term goals completely meet company’s strategic intent. At last, I think Starbuck’s strategic intent gives its employees a strong goal that is worthy of commitment: we are the employees of Starbuck; we should give the customer’s best coffee and make them like our store as their “third place” to come together. Line of Business Starbuck expanded its stores in many locations which are high-traffic, high- visibility settings...
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...Mahammad Rahimov Michael Poliquin Starbucks - Going Global Fast Question 1: Identify the controllable and uncontrollable elements that Starbucks has encountered in entering the global market. The case discusses multiple international markets that Starbucks had entered. Japan, France, Italy, Austria, and the Middle East were mentioned. Starting with the Japanese market, the elements that faced Starbucks there were uncontrollable. The first element was the fierce competition in the Japanese market that already existed, and the fact that Japan’s economy had suffered a blow which resulted in an economic depression. Moving on to the next market, which is France. The elements were also uncontrollable because the policies and regulations in the French republic were extremely sophisticated and biased towards the Labour Unions. Going south towards Italy, which is one of those countries that coffee-drinking is embedded in its culture. Starbucks’ Italian mission was faced by a controllable element, which is Starbucks’ own pricing strategy. In a country where the average Italian is used to paying 65cents (North), and 55cents (South) for a cup of espresso, Starbucks offered their espresso for a $1.5. Also, the fact that Italian coffee houses offer food along with their coffee made it even harder for Starbucks. When Starbucks decided to enter the ‘Imperial City’, which is known around the planet as a centre of Western sophistication, Vienna proved to be culturally adaptable to the...
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...Starbucks Case Study Contents Introduction ............................................................................................................................. 3 Background information and industry analysis ........................................................................ 4 Development and expansion strategies .................................................................................... 6 Internal environment analysis ................................................................................................... 8 SWOT analysis ............................................................................................................................ 9 Strengths .............................................................................................................. .... ............... 10 Weaknesses ............................................................................................................................... 11 Opportunities ............................................................................................................................ 11 Threats ....................................................................................................................... . ............. 11 Conclusion .................................................................................................................................. 12 References........................................................................
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...S w 9B08A016 PY A CRACK IN THE MUG: CAN STARBUCKS MEND IT?1 Michael Herriman, Motohiro Wanikawa, Ryoko Ichinose, Shobhana Darak and Yumana Chaivan wrote this case solely to provide material for class discussion. The authors do not intend to illustrate either effective or ineffective handling of a managerial situation. The authors may have disguised certain names and other identifying information to protect confidentiality. O Ivey Management Services prohibits any form of reproduction, storage or transmittal without its written permission. Reproduction of this material is not covered under authorization by any reproduction rights organization. To order copies or request permission to reproduce materials, contact Ivey Publishing, Ivey Management Services, c/o Richard Ivey School of Business, The University of Western Ontario, London, Ontario, Canada, N6A 3K7; phone (519) 661-3208; fax (519) 661-3882; e-mail cases@ivey.uwo.ca. Version: (A) 2008-10-23 C Copyright © 2008, Ivey Management Services N O T After 20 years of phenomenal expansion, the last six months of 2007 saw Starbucks jolted by a decline in share price of 50 per cent and a decrease in customer visits to its outlets in North America. Its share price was hovering around $19 to $20.2 By mid-2008, it had declined to $18. Its fiscal first-quarter profit in 2007 rose by less than two per cent and in January 2008 it announced the closing of 100 U.S. stores. On July 1, 2008, this...
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