S T A R B U C K S

Ashley Anderson Arnold CarinoJoanna Louie

Quynh NguyenPia Rodil

Michelle TapiaNathan Trujillo

Agenda• Company Background

o Company Historyo Key Factso Company Leadershipo Products and Serviceso Mission Statemento Mission Statement Evaluationo Proposed Mission Statement

• Internal Factors Evaluation

• External Factors Evaluation

Company History

● 1971-Starbucks founded as single store in Seattle’s Pike Place Market.14

● 1982- Howard Schultz joins Starbucks as director of retail operations and marketing. 14

● 1987- II Giornale acquires Starbucks assets and changes name to Starbucks Corporation. Opens in Chicago and Vancouver. 14

● 1992-Starbucks decertified the union and made IPO. 14

Quynh Nguyen

Company History

● 1993-Opens first roasting plant in Washington. 14

● 1996-Opens first stores outside of North America in Japan and Singapore. 14

● 1998- Acquires Tazo, a tea company based in Oregon.Lauches Starbucks.com. 14

● 2011- Changes its logo in honor of its 40th anniversary.

14

Quynh Nguyen

Key Facts● Headquarter in Seattle, Washington. 3

● The average Starbucks customer visits the store six times per month. The most loyal 20% of customers visit 16 times per month. 3

● Offers more than 87,000 possible drink combinations. 3

● In 2013: >19,767 stores worldwide and 14.9 billion U.S. dollars in total revenues, up 12% from the previous year. Global store sales increased 7%. 19

Quynh Nguyen

Company Leadership

• Howard Schultz

• Chairman and CEO4

• Joined Starbucks in 1982 21

• Not passionate about coffee5

Pia Rodil

Products

Michelle Tapia

16

Services

Michelle Tapia

• “Servicescape” 8

• Wi-fi 16

• Subscriptions 16

• e-Gifts 16

• My Starbucks reward 16 (Starbucks, 2014)

Mission Statement

Our mission: to inspire and nurture the human spirit -- one person, one cup and one neighborhood at a time. 15

Joanna Louie

“”

Mission Statement Evaluation Matrix

Joanna Louie

Concern for employees NO

Concern for Public Image NO

Concern for Survival and Growth NO

Customers NO

Markets NO

Philosophy YES

Products and Services NO

Self-concept NO

Technology NO

Proposed Mission Statement

Joanna Louie

Joanna Louie

15

Joanna Louie

15

15

15

Joanna Louie

15

15

15

Joanna Louie

Proposed Mission Statement

Joanna Louie

Our mission: to inspire and nurture the human spirit – one person, one cup and one neighborhood at a time. We’re passionate about ethically sourcing the finest coffee beans, roasting them with great care, and improving the lives of people who grow them. We’re called partners, because it’s not just a job, it’s our passion. Together, we embrace diversity to create a place where each of us can be ourselves. When we are fully engaged, we connect with, laugh with, and uplift the lives of our customers – even if just for a few moments. When our customers feel this sense of belonging, our stores become a haven, a break from the worries outside, a place where you can meet with friends. Every store is part of a community, and we take our responsibility to be good neighbors seriously. We understand what it’s like to be busy, so we make sure to position our stores where you work, shop, travel, and dine. As technology continues to improve, so do our stores and services. We strive to keep our stores as savvy and up-to-date as possible to provide our customers with an attractive environment to meet, greet, or get work done. We know that as we deliver in each of these areas, we enjoy the kind of success that rewards our shareholders.

Proposed Mission Statement

Joanna Louie

Current Strategies

●Global Matrix 22

● Transnational 12

● Differentiation 20

Michelle Tapia

External Factors Evaluation (EFE)Key External Factors Weight Rating Score

Opportunities

Number of coffee consumers grew 5% in the last year 11 0.20 5 1

U.S. economy and job growth on the rise 9 0.12 3 0.36

Advances in technology leads to lower cost of operations 0.15 3 0.45

Threats

Chinese regulations (high import duties and tax rates) 9 0.25 1 0.25

Growing trend to be healthy 6 0.13 5 0.65

Climate change in farms where Starbucks get their coffee 17 0.15 5 .75

Total 1.00 3.46

Competitive Profile MatrixStarbucksStarbucks McDonaldsMcDonalds Dunkin’ DonutsDunkin’ Donuts

Critical Success Factors

Weight Rate Score Rate Score Rate Score

Market Share .3 5 1.5 3 .9 2 .6

Price Competitiveness

.1 3 .3 3 .3 4 .4

Customer Service .15 3 .45 4 .6 3 .45

Global Expansion .15 5 .75 5 .75 3 .45

Quality of Product .2 4 .8 2 .4 3 .6

Employee Benefits .1 4 .04 2 .2 3 .3

Total 1.00 3.84 3.15 2.8

Arnold Carino & Joanna Louie

Michelle Tapia

Key Internal Factors Weight Rating Score

Strengths

Strong Brand Name 4 .29 5 1.45

Sound Financial Records 10 .17 4 .68

Market Dominance 10 .20 4 .80

Weaknesses

Self-Cannibalization (Overexposure) 20 .08 1 .08

High Product Price 18 .10 3 .30

Increase In the Price Of Coffee Beans 20 .16 4 .64

Total 1.00 3.95

Internal Factors Evaluation (IFE)

Financial Analysis

Nathan Trujillo

Starbucks McDonalds Dunkin’ Donuts

Market Cap 53.90B 94.06B 5.47B

EPS .15 5.55 1.36

Net Income 116.80M 5.59B 146.90M

Gross Margin .57 .39 .78

P/Sales 3.53 3.35 7.78

PEG 1.40 1.98 1.82

P/E 462.99 17.12 37.79

ROE 2.33% 35.69% 38.39%

ROA 15.83% 14.78% 5.45%

S T A R B U C K SFinal Presentation

Ashley Anderson Arnold CarinoJoanna Louie

Quynh NguyenPia Rodil

Michelle TapiaNathan Trujillo

Agenda

• IE Matrix • SWOT Matrix • Quantitative Strategic Planning Matrix • Final Recommended Strategy • Organizational Structure • Organizational Culture• Strategic Control and Reward Systems• Balanced Scorecard• Target Market• Product Positioning Map

External Factors Evaluation (EFE)Key External Factors Weight Rating Score

Opportunities

Number of coffee consumers grew 5% in the last year 11 0.20 5 1

U.S. economy and job growth on the rise 9 0.12 3 0.36

Advances in technology leads to lower cost of operations 0.15 3 0.45

Threats

Chinese regulations (high import duties and tax rates) 9 0.25 1 0.25

Growing trend to be healthy 6 0.13 5 0.65

Climate change in farms where Starbucks get their coffee 17 0.15 5 .75

Total 1.00 3.46

Key Internal Factors Weight Rating Score

Strengths

Strong Brand Name 4 .29 5 1.45

Sound Financial Records 10 .17 4 .68

Market Dominance 10 .20 4 .80

Weaknesses

Self-Cannibalization (Overexposure) 20 .08 1 .08

High Product Price 18 .10 3 .30

Increase In the Price Of Coffee Beans 20 .16 4 .64

Total 1.00 3.95

Internal Factors Evaluation (IFE)

IE Matrix

Joanna Louie

 

Strengths - S

1. Brand Identity 10

2. Customer Base Loyalty10

3. Variety 3

4. Market Dominance 10

Weaknesses - W

1. Self-Cannibalization 20 2. High Product Price 18

3. Perceived As A Substitute 20

4.Coffee Culture Clash

Opportunities - O

1. Customization 3

2. International Markets 4

3. Product Diversification 3

4. Technological advances lead to higher profits.

SO

S1,O2

Embrace China through brand identity.

S4, O3

Diverse products can lead Starbucks to succeed in other sectors such as the fast-food

industry

WO

W4,O1

Customize to the Chinese Culture

W3,O4

Use trending Apps to maintain customers by offering promotions and coupons

Threats - T

1. Rising prices of coffee beans and dairy products 17

2. Growing Trend To Be Healthy 6

3. Intense Competition 20

4. Saturated Markets in Developed Economies

ST

S2, T1

Uphold the Starbucks Experience to increase and maintain customer base loyalty despite

price increase.

S3, T2

Embrace the products that are healthier such as the “skinny” alternative .

WT

W2, T3

Emphasis on quality.

W1,T4

First-Mover in China. Adjust to the “tea” atmosphere.

SWOT Matrix

Michelle Tapia

Arnold Carino

Quantitative Strategic Planning Matrix

Nathan Trujillo

Final Recommended Strategies

• Embrace China through brand equity

• Implementing an effective hedging strategy, like future contracts, to lock in low prices for high quality coffee beans

• More investments in advertising and marketing initiatives in the face of increased competition in the market.

• Integrating Starbucks loyalty program with the mobile application would also be recommended

Matrix Organizational Structure

Quynh

Quynh

Proposed Matrix Organizational Structure

Michelle Tapia

• Diversity &Inclusion 23

• People Orientated Culture 26

• Eiffel Tower Culture

• Employees are Partners 24

•Starbucks Experience:Cafe Culture 1

What’s It Like To Work For Starbucks?

Michelle Tapia

•Guided Missile Culture • Open Mind• Respect & Dignity

• Respect cultural differences

• Strategic Control & Rewards System • Input Controls: Standard Operating Procedures• Output Controls: ROWEs

Starbucks Culture &

Controls Improvement Proposal

Ashely Anderson

Strategic Control and Reward Systems• Internal Governance Mechanisms

◦ Guided Missile Culture

• Input Controls 31

◦ Customer- focused (Behavior Guidelines) 31

■ Employees are trained to act in specific ways

■ Treat employees well and they will treat the customers well

■ Happy employees lead to return customers

• Output Controls 31

◦ Partner benefits (ROWEs; Intrinsic)

◦ Your Special Blend Package

Balanced Scorecard

Ashely Anderson

Pia Rodil

• Young urban adults

◦ Core customers 26

◦ Ages 18-24 years old 26

◦ Average income: $55,000 27

◦ “Third space” 27

Current Target Market

Pia Rodil

Proposed Target Market• Global strategy: China

◦ urban Chinese upper middle class

◦ concentrated in the big cities 26

◦ 106,000 to 229,000 yuan ($17,000- $34,000) 27

◦ Ages 20 to 50 years old 26

◦ Aspirational appeal 28

Current Product Positioning

Pia Rodil

 

Proposed Product Positioning

Pia Rodil

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Starbucks_EN.pdf

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