Post on 23-Oct-2014
Starbucks case study
Presented by:
Kenza CharafMouna Gourram
Omar BouzoubaaIliass El AssalIsmail Slaoui
Outline• Vision & Mission• Proposed Mission Statement• Six principles of Starbucks• Objectives & Strategies• SWOT analysis• Matrices• EFE matrix• IFE matrix• SWOT matrix• Space matrix
• Outcomes of Space Matrix• Strategies• Financial Ratios
Vision & Mission
• The Vision statement :
“To inspire and nurture the human spirit— one person, one cup, and one neighbourhood at
a time”
• The mission of Starbucks:
“To establish Starbucks as the premier purveyor of the finest coffee in the world while maintaining our uncompromising
principles while we grow”
Proposed Mission Statement
• “Establish Starbucks as the foremost provider of the deluxe coffee in the world and also to be established as the most employee appreciated company even as maintaining our uncompromising principles as we grow mutually with hi-
tech advances”
six principles of Starbucks
• The six principles of Starbucks are stated as:• Provide a great work environment and having
engaged employees--another part of the Starbucks experience.• Bet on the diversification.• High quality of purchasing raw materials.• Roasting and fresh delivery of our coffee.• Creating an experience and develop satisfied
customers in order to earn customer loyalty.• Contribute positively to our communities and our
environment, and recognize that profitability is essential to our future success.
Objectives :
• Our coffee• Our partners
• Our customers• Our stores • Our neighbourhood• Our Shareholders
SWOT analysis
Strengths Weaknesses
High brand equity
High end coffees
Very good experience
Enormous number of locations
strong ethical values
Exclusive coffee products
High prices
Offer one flavor
Acting just on the coffee industry
Coffee being a product of
dependency
Opportunities Threats
Coffee market growing worldwide
Product diversification to food and
nonfood items
Selling to other companies
Develop international business
Diversifying their business
More competitors focusing on coffee
products (McDonalds, dunkin
donuts…)
Supplier’s dependency and rising in
the cost of coffee and dairy
products.
Financial crisis and recession
Financial Ratios2008 2007 2006
Current Ratio 0.8 0.787 0.79
Quick Ratio 0.48 0.466 0.461
Total Liabilities to total assets
0.56 0.57 0.496
Profit Margin 3% 7.1% 7.2%
Equity Ratio 0.44 0.43 0.5
Debt to Equity 1.28 1.34 0.98
Inventory Turnover
14.98 13.6 12.23
Sales Growth 10.3% 20.8% NA
Net Income -53% 19.2% NA
Matrices
EFE matrix
Key External Factors Weight Rating Weighted Score
Opportunities
Product diversification to food and smoothies 0.2 4 0.8Selling to other companies 0.06 2 0.12Develop international business 0.1 4 0.4Diversifying their business 0.13 2 0.26
ThreatsCoffee Products (Macdonald's, Dunkin Donuts…) 0.24 4 0.96Volatile business environment 0.08 3 0.24Financial crisis and recession 0.19 2 0.38
Total 1 3.16
IFE matrix• See the hard copy
SWOT matrix• See the hard copy
Space Matrix
X axis
Competitive position (CP) --2 Product quality --3 Market capital share --4 Technological know how --2 Control over distributors Average=2.75
Industry position (IP) +6 Profit potential+5 Growth potential+5 Financial stability+5 ease of entry into market Average= 5.25
Yaxis
Financial position (FP) +4 Cash flow from operations+5 Liquidity+5 Leverage+6 Working Capital+4 Cash Flow from Operations Average= 4.8 X axis= 2.50
Stability position (SP) --4 Price range competing products--2 Barriers to entry--2 Competitive pressure--5 Barriers to exit--3 Risk involved in Business Average= 3.2Y axis= 1.6
Outcomes of Space Matrix• Aggressive Profiles:
The space Matrix shows aggressive response of Starbucks. So, the company has to follow these strategies:
• Horizontal integration, • Market penetration• Market development