.............................. 10 2.5 Industry‟s Critical Success Factors ................................................................ 10 2.6 Opportunities & Threats................................................................................ 11 3. Internal Analysis .................................................................................................. 11 3.1 Starbucks‟s Strengths & Weaknesses ............................................................ 11 3.2 Evaluation of Starbucks‟ Main Capabilities .................................................. 12 3.3 Value Chain Analysis ................................................................................... 13 3.4 Starbucks‟ Main Internal Capabilities against industry‟s Critical Success Factors ......................................................................................................... 14 4. Starbucks‟ Current „Issue & Challenges‟ Diagnosis .............................................. 14 4.1 Summary of Key Issues ............................................................................................. 14 4.2 Starbucks‟ Current Strategic Challenges ................................................................ 15 5....
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...Ateneo De Zamboanga University School of Management and Accountancy CASE ANALYSIS “Starbucks Coffee Company: The Indian Dilemma” Prepared by: Barbaso, Jan Paulo E. Bejerano, Hyacinth Vienne A. Deogracias, Scepter Jr. O. March 14, 2014 Background of the Case With a rich history, in 1994, Starbucks Coffee Company was formed and Howard Schultz became its President. Since then the company was the number one coffee retailer and continuously expands its business globally. It pursued international expansion with three objectives in mind: to prevent competitors from getting a head start, to build upon the growing desire for Western brands, and to take advantage of higher coffee consumption rates in different countries. And so seeing that the Asian market is in its developmental stage, it took this opportunity to be a leader in a new industry and so it concentrated its expansion efforts mainly in Asia starting with Japan and China. In 2002, Starbucks announced for the first time that it was planning to enter India. Later it postponed its entry as it had entered China recently and was facing problems in Japan. In 2003, there was news again that Starbucks was reviving its plans to enter India. In 2004, Starbucks officials visited India but according to sources they returned unconvinced as they could not agree on an appropriate partner for its entry. A statement coming from Starbucks said that “Without sounding arrogant, we are looking at our own strategy. There is nothing...
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...ANALYSIS FOR STARBUCKS COFFEE COMPANY Coursework in Business Environment Statement of originality We, the undersigned, declare that this coursework is our own original work. Student registration No: 101033 Signature: …………. 101047 Signature: …………. Program: Business Administration, Level 1 Lecturer: Prof. M. Malinowska The subject that we are going to focus on in the course work is a PESTEL Analysis on Starbucks Coffee Company. This analysis is aimed to familiarize the readers with the six types of factors that influence the activity of such a large and prosperous company as Starbucks. As we all know every business has its ups and downs but by taking into consideration what the influences are, better service and production could be achieved. The emphasis of this project is to discuss the major characteristics of a whole business and providing information about the way it functions. We will also talk about the reflection of Starbucks on the society all over the world. POLITICAL FACTORS Starbucks was established in Seattle, Washington, USA on March, 30, 1971. This is the largest coffeehouse in the world. Since the opening of the first Starbucks store, 30 years ago it becomes more and more popular. Till today Starbucks Co. owns 17,009 stores in 55 countries, which makes it one of the most popular places for a coffee drink. The following chart illustrates some of the countries where coffee stores...
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...» Business and Management ‘Pestle’ Analysis for Starbucks Coffee Company In: Business and Management ‘Pestle’ Analysis for Starbucks Coffee Company ‘PESTLE’ Analysis for Starbucks Coffee Company Political: •High taxation imposed on farmers in those countries producing the coffee bean will usually mean Starbucks pay a higher price for the coffee they purchase. Any fluctuations in taxation levels in the industry are almost certainly ultimately passed on to the consumer. •Trade issues will affect Starbucks predominantly when exporting and importing goods. When another country’s government imposes a tariff it not only results in an efficiency loss for Starbucks but large income transfers can become inconsistent with equity. This extra charge can turn a bargain into a rip-off. Also, since 9/11, trade relations have been adversely affected between the USA and some other countries. •Starbucks should thoroughly investigate the political stability of any country they plan to expand to. Changes in government can lead to changes in taxation and legislation. The American elections may have an effect on Starbucks as new legislation or new or existing government may bring in taxes. Also, those countries in political turmoil or civil war (e.g. Zimbabwe at present) should be approached with great caution when considering new ventures. •The international economy must be brought into consideration as it can affect Starbucks’ sales and markets. The aftermath of 9/11 was an example...
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...Analysis for Starbucks Coffee Company Political: •High taxation imposed on farmers in those countries producing the coffee bean will usually mean Starbucks pay a higher price for the coffee they purchase. Any fluctuations in taxation levels in the industry are almost certainly ultimately passed on to the consumer. •Trade issues will affect Starbucks predominantly when exporting and importing goods. When another country’s government imposes a tariff it not only results in an efficiency loss for Starbucks but large income transfers can become inconsistent with equity. This extra charge can turn a bargain into a rip-off. Also, since 9/11, trade relations have been adversely affected between the USA and some other countries. •Starbucks should thoroughly investigate the political stability of any country they plan to expand to. Changes in government can lead to changes in taxation and legislation. The American elections may have an effect on Starbucks as new legislation or new or existing government may bring in taxes. Also, those countries in political turmoil or civil war (e.g. Zimbabwe at present) should be approached with great caution when considering new ventures. •The international economy must be brought into consideration as it can affect Starbucks’ sales and markets. The aftermath of 9/11 was an example of an economic downturn that affected the world market. •A reduction in licensing and permit costs in those countries producing the coffee bean for Starbucks would lower...
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...Introduction Starbucks is the premier roaster, marketer and retailer of specialty coffee in the world, operating in 63 countries. In 2007 the company was in a need of transformation. Peter Gibbons was hired to manage the supply chain of Starbucks. The company was reorganized and the supply chain has changed dramatically since then (Starbucks, 2012). Here is a diagram showing the supply chain network of Starbucks in 2014: ... Components of the supply chain Starbucks has commitment to sell only the finest coffees and coffee beverages. To ensure compliance with their coffee standards, they control coffee purchasing, roasting and packaging, and the global distribution of coffee used their operations. The company purchases green coffee beans from multiple coffee-producing regions around the world and custom roast them to the exacting standards for our many blends and single origin coffees. The price of coffee is subject to significant volatility. Although most coffee trades in the commodity market, high-altitude Arabica coffee of the quality sought by Starbucks tends to trade on a negotiated basis. Both the premium and the commodity price depend upon the supply and demand at the time of purchase. In addition to coffee, Starbucks also purchases significant amounts of dairy products, particularly fluid milk, to support the needs of Company-operated stores. Products other than whole bean coffees and coffee beverages sold in Starbucks® stores include tea and a number of ready-to-drink...
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...Case 7 Starbucks Coffee Company: The Indian Dilemma Case Digest In 2006, the US based Starbucks Coffee Company, with over 11,000 stores in 36 countries was the No. 1 specialty coffee company in the world. Every week over 40 million customers visited Starbucks coffeehouses. After phenomenal success in the US, and revolutionizing specialty coffee culture, Starbucks undertook international expansion and popularized its specialty coffee worldwide. In the 1990s, Starbucks concentrated its expansion efforts mainly in Asia. The initial pages of the case delineate the origin and growth of Starbucks as a company and a super brand and the strategies adopted by it. In 2002, Starbucks announced that it was planning to enter India. Later it postponed its entry as it had entered China recently and was facing problems in Japan. In 2003, there was news again that Starbucks was reviving its plans to enter India. In 2004, Starbucks officials visited India but according to sources they returned unconvinced as they could not crystallize on an appropriate partner for its entry. In mid 2006, Starbucks announced that they were all set to offer the ‘Starbucks experience’ to Indians in the next 18 months. Recommendation Starbucks is initiating that whether they should enter India or not. I recommend that Starbucks should not enter India because although India has many opportunities, India is risky in terms of their people of having an increasing rate of obesity that if Starbucks sold their...
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...24/05/2010 | | | | “Making your organisation fit for purpose” Starbucks Coffe Company is the world leading brand in roasting and distributing coffee. The company owns now more than 15 000 coffee shops around the globe: it is settled in North America, Latin America, Europe, Middle-East and Asia. The diversity and depth of its offer (from smooth to extra roasted coffee, African, Arabian or Latin, and all the muffins, cookies and sandwiches) allow them to count on an international exposure that has last for many years. Still, their business tends to be flattening. And the number of competitors in their core-business market, even if the competition stays way back them, is growing constantly. Considering these facts, the objective of Starbucks is to strengthen its leadership on the market. We were then approached by Starbucks in this particular goal. In this folder, you will find an entire analysis of the external environment of Starbucks Coffee Company: the macro-environment, the competitors and market and the stakeholders’ expectations will lead to being aware of opportunities and threats. Then, we went on the study of the internal capabilities: the resources and competences, the sustained competitive advantage and the diagnosis of strategic capability that will permit us to define Starbucks’ strengths and weaknesses. [Thus, owing to the results obtained, we endeavour to recommend Starbucks some new and relevant elements for the future strategic direction of the...
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...Strategic Audit of Starbucks Traci Hall Jones College Business Policy and Administration Professor E. Smith June 20, 2011 I. Current Situation A. Current Performance Starbucks is the fastest growing food chain and shows no signs of slowing down. it plans to boost earnings by 20% to 25% annually over the next three to five years and to bring its number of storefronts to 40,000 worldwide which is 10,000 more than McDonald’s. Starbucks is conservative in how it finances its goals. Operating cash flow from existing stores pays for new-store development. So far, the return on new stores has been excellent. Increasing same-store sales has been a tougher order, though, and Chairman Howard Schultz has expressed worries that moves to improve same-store sales with automatic equipment and off-brand merchandise could be turning consumers off. The return on investment (ROI) for Starbucks in 2010 was 22.50%. The market share was $27.33 billion while the profitability was at 30.4% (Donald, 2007). B. Strategic Posture Starbucks has an impressive mission statement because it addresses their product as a whole and their mission for different relationships. “The Starbucks Mission Statement-To inspire and nurture the human spirit - one person, one cup, and one neighborhood at a time. Here are the principles of how we live that every day: Our Coffee-It has always been, and will always be, about quality. We’re passionate about ethically sourcing the finest coffee beans, roasting them...
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...Starbucks Coffee Company The story begins in 1971 in Seattle Washington, back then Starbucks was just a single store in Seattle’s historic Pike Place Market, offering some of the world’s finest fresh-roasted whole bean coffee. “The name, inspired by Moby Dick, evoked the romance of the high seas and the seafaring trading of the early coffee traders.” (Starbucks Company Profile). It wasn’t until the mid-1980s when Starbucks started offering brewed coffee and espresso beverages that they have become so famous of. Starbucks offers a wide range of different coffee products which include: Coffee Beans, Handcrafted Beverages, Merchandise, and Ready-to-drink, and Instant Coffee and Teas. Coffee beans get many of their distinguishing characteristics from where they are cultivated. Starbucks consistently roasts only some of the highest quality Arabica beans, which it sources from several major growing regions of Latin America. Each of the world’s three coffee-growing regions, Latin America, Africa and Asia Pacific have different variables in soil, climate, to elevation that bring out the unique flavors. The signature coffee blends that Starbucks is known from mostly comes from the Asia Pacific Region (Starbucks Coffee Company). It wasn’t until Howard Schultz traveled to Italy and became fascinated with Italian Coffee bars, and sees the potential to develop a similar coffeehouse culture in Seattle. It wasn’t until the 1984 before Starbucks served its first Starbucks Cafe latte and...
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...Strategic Marketing Plan for the Starbucks Coffee Company Table of Contents Introduction and background 3 Company mission, company objectives 3 Market definition and product or brand background 4 Evaluation of results and conclusion about problem 5 Situational Analysis 5 Internal analysis 5 Customer analysis 7 Industry analysis 8 Competitor analysis 11 Distribution and supplier analysis 11 SWOT analysis – Confrontation Matrix 12 Choice of option 13 Marketing objectives/ expected results 13 Marketing strategy 13 Target audiences 14 Brand and product position 14 Decisions regarding marketing mix elements 15 Objectives for marketing mix elements 15 Strategies and tactics for marketing mix elements 15 Financial indicators and budges 16 Evaluation criteria 16 Sources 16 Introduction and background Company mission, company objectives The first Starbucks café was opened in 1971 in Seattle’s historic Pike Place Market. It was only a small café, but it offered some of the world’s finest fresh-roasted whole bean coffees. The company’s name derives from Moby Dick, the novel was written by the American author Herman Melville in 1851. Starbuck is the first mate on a whaling ship named ‘Pequod’, he is an intelligent Quaker (religious group) and he is from Nantucket. The name evoked the romance of the high seas and the seafaring tradition of the early coffee traders. Starbucks chairman, president and chief...
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...2009 Starbucks in Tiawan [pic] History of Starbucks The first Starbucks was opened in Seattle in 1970s by three partners: Jerry Baldwin, Zev Siegel and Gordon Bowker. The name of Starbucks came from Herman Melville’s Moby Dick, a classic American novel about the 19th century whaling industry. The seafaring name seems appropriate for a store that imports the world’s finest coffees to the cold, thirsty people of Seattle. (Starbucks Coffee Company, 2009) Entrepreneur Howard Schultz joined the company in 1982. While taking a business trip in Italy, he visited Milan’s famous espresso bars. He was so impressed with their culture and popularity, he thought he could bring this idea to the United States, this idea would be successful. He was right, Seattle became coffee-crazy after trying lattes and mochas. (Starbucks Coffee Company, 2009) The development of Starbucks expanded beyond Seattle in 1990s. First, they expanded their stores to all states in the United States, and then extended to the world. The U.S. Starbucks stores around the world are based on different market conditions and different organizational structure. There are four kinds of structure which Starbucks uses to expand their stores around the world: own self-employed, joint venture, license agreement, authorized to operate. Moreover, they were the first firm which offered stock options to their part-time employees. Starbucks becomes a publicly traded company. (Starbucks Coffee Company...
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...Company | Starbucks Cafe | Type | Public | Traded as | * NASDAQ: SBUX * NASDAQ-100 Component * S&P 500 Component | Industry | Coffee shop | Founded | Pike Place Market in Seattle, Washington, United States (March 30, 1971) | Founders | * Jerry Baldwin * Zev Siegl * Gordon Bowker | Headquarters | 2401 Utah Avenue South, Seattle, Washington, United States | Number of locations | 21,160 shops[1] (Nov. 27, 2014) | Area served | Worldwide | Key people | * Howard Schultz (Chairman, President and CEO) * Troy Alstead (COO) | Products | Coffee • Tea • Pastries • Frappuccino beverages • Smoothies | Revenue | US$14.89 billion[2] (FY 2013) | Operating income | US$325.4 million[2] (FY 2013) | Net income | US$8.8 million[2] (FY 2013) | Total assets | US$11.5167 billion[3] (2013) | Total equity | US$4.48 billion[2] (FY 2013) | Number of employees | 182,000[4] (2014) | Subsidiaries | * Starbucks Coffee Company * Ethos water * Evolution Fresh * Hear Music * La Boulange Bakery * Seattle's Best Coffee * Tazo * Teavana * Torrefazione Italia | Website | starbucks.com | Starbucks Corporation, doing business as Starbucks Coffee, is an American global coffee company and coffeehouse chain based in Seattle, Washington. Starbucks is the largest coffeehouse company in the world ahead of UK rival Costa Coffee, with 21,160 stores in 63 countries and territories, including 12,067 in the United States, 1,570 in China, 1,451 in...
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...SWOT Analysis Starbucks Donnie Walker Mgmt 303 Starbucks SWOT Analysis Starbucks is a specialty coffeehouse chain that was started in 1971 in Seattle Washington. In 1982, Howard Schultz joined Starbucks, merging the Italian coffee shop culture with the pre-existing Seattle store. The coffee culture soared allowing for expansion of more Starbucks locations throughout the United States to develop during the 1990’s. Starbucks popularity allowed it to become the first publicly traded company. Starbucks continues to expand and currently has more than 15,500 locations in more than 43 countries. Starbucks mission statement is to inspire and nurture the human spirit – one person, one cup and one neighborhood at a time (www.starbucks.com). One of the core strengths Starbucks possesses is its employee management and treatment. Starbucks employees are offered excellent benefits and pay. Starbucks offers a total pay packages called “your special blend”. This package includes: bonuses, 401(k) matching and discounted stock purchase options, adoption assistance and health coverage. Starbucks will help reduce out-of-pocket expenses for education. Very few companies are competitive with their pay and benefits package in this day. Starbucks is the exception and was ranked one of the top 100 companies to work for several years in a row. The appealing employment through Starbucks means less turn around for the company and more profit. Yet another core strength...
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... Introduction Starbucks has been leading the coffee shop market in more than 40 years now. It has always been the place to find the world's best coffees. Its first store was founded at Pike Place Market in Seattle, Washington, United States. It has given a positive outcome so they serve consumers all over the world. The success of Starbucks coffee had come this far because they expand their operation and services and didn't limit their products. They sell not just coffee but tea, pastries, frappuccino, beverages and smoothies as well. Starbucks is the largest coffee house company in the world ahead of UK rival Costa Coffee, with 22, 551 stores in 65 countries and territories, including 12, 739 in Canada, 1,117 in Japan and 830 in the United Kingdom. From Starbuck' founding in 1971 as Seattle coffee bean roaster and retailer, the company has expanded rapidly. Between 1987 and 2007, Starbucks opened on average two new stores every day. Starbucks had been profitable as a local company in Seattle in early 1980's but lost money on its late 1989's expansion into the Midwest and British Columbia. Its fortune did not reverse until the fiscal year of 1989-1990, when it registered a small profit of $812, 000. By the time it expanded into California in 1991 it had become it trendy. The first store outside the United States or Canada opened in Tokyo in 1996, and overseas stores now constitute almost one third of Starbucks' stores. The company planned to open a net of 900...
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