STARBUCKS

8/30/2012

Apeejay School Of Management, Delhi

Presented By: Disha Paliwal Karan Gulati Rishabh Sharma Shilpi Tiwari Shruti Kumari Tanvi Gupta 1 Vidhu Gupta

COMPANY OVERVIEW
Started in 1971 in Seattle, Washington by Gerald Baldwin, Ziev Siegl and Gordon Bowker Original name Starbucks Coffee, Tea and Spice

Main focus : Quality of Coffee offered to customers

In 1988, the owners sold Starbucks Chain to Howard Schultz

Whole Beans and Premium-Priced coffee Beverages in new stores

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Apeejay School Of Management, Delhi

.contd.
Target Customers : White collar Patrons between the 25 < age < 44
By 1992 , the company had 140 stores in Northwest & Chicago

First store outside North America opened in the mid 1990s

Dominant specialitycoffee brand in North America by 2002

Grew from 55 stores in 1989 to currently 16120 stores in 49 countries

8/30/2012

Apeejay School Of Management, Delhi

SWOT ANALYSIS
Strengths Weakness

SWOT
Opportunities
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Threats
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Apeejay School Of Management, Delhi

STRENGTHS
Product Diversification High Visibility Locations to Attract Customer Valued and motivated employees, good work environment

Industry Market Leader Huge Sales without Advertisement

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Apeejay School Of Management, Delhi

WEAKNESS
Focus on Growth & Expansion rather than Customer Satisfaction
Product Pricing(expensive) Self Cannibalization Lack of Strategic Marketing Group High Operating Costs

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Apeejay School Of Management, Delhi

OPPORTUNITIES
Penetration into International Markets

Technological Advances Innovation of New Products

Evolution of Customer Base

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Apeejay School Of Management, Delhi

THREATS
Increasing Competition

US Market Saturation

Increasing levels of Customer Dissatisfaction

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Apeejay School Of Management, Delhi

GROWTH ANALYSIS
Product Innovation Retail Expansion Service Innovation

Drivers
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RETAIL EXPANSION
Opening stores new markets Over 300 company stores in the UK, Australia and Thailand

About 900 Licensed stores in Asia , Europe, Middle East , Africa and Latin America
Companys goal was to ultimately have 15000 international stores Company opened 525 company-operated & 225 licensed store in North America

Growth was driven by increased consumption of

Specialty Coffee amongst US population
525

North America

900

UK, Australia, Thailand

300 Asia, Europe, Middle East, Africa, Latin America

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Apeejay School Of Management, Delhi

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PRODUCT INNOVATION
New products were launched on regular basis Success of new product dependent on acceptance of partners In 1995 introduction of coffee and non-coffee based line of Frappuccino beverages was companys most successful innovation The bottled version of Frappuccino distributed by PepsiCo became $400 million franchise Frappuccino captured 90% of ready to drink coffee category

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Apeejay School Of Management, Delhi

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SERVICE INNOVATION
Launched Starbucks stored value card(SVC) About 6 million cards had been issued

Initial activations and reload had reached $160 million in sales

T-mobile HotSpot wireless service was introduced in August 2002 The service offered high-speed Internet Access In selected stores in US and Europe
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CONCLUSION
Starbucks strategy is fairly simple: increase the perception of high quality of a commodity product adapt stores to the consumers lifestyle, and covers the areas completely Formidable growth from a commodity product, with virtually no marketing, spending just 1% of its annual revenues on advertising. Starbucks should also focus on customer satisfaction, rather than focusing only on Growth and Expansion
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Howard Schultz: We arent in the coffee business, serving people. We are in the people business, serving coffee.

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Apeejay School Of Management, Delhi

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