STARBUCKS

BS in Management Science
OPERATIONS MANAGEMENT - MGT214

Group Project

Instructors Name: Ms. Dalal Bamufleh

IT IS NOT JUST COFFEE, IT IS STARBUCKS COFFEE

STUDENTS NAMES
Alaa Gain 06120012
Shoroq Al-Khateeb 09120108
Ebtehaj Lafi 08220255
Afnan Al-Gain 09120068
Abrar Muzain 08120002
Alaa Muzain - 08120011

IT IS NOT JUST COFFEE, IT IS STARBUCKS COFFEE

BACKGROU
ND
Since 1971, Starbucks Coffee
Company has been committed
to ethically sourcing and
roasting the highest
qualityArabica coffee in the
world. Today, with stores around
the globe, the company is the
worlds premier roaster and
retailer of specialty coffee.

HISTORY
1971 Starbucks
Coffee, Tea, and Spice
store (coffee bean
roasting) opened in
Seattles Pike Place
Market.

1987 Il Giornale
acquired Starbucks and
changed the name into
Starbucks Corporation.

1982 Howard Schultz

joined Starbucks.

1986 Howard Schultz

established Il Giornale
Coffee Company.

1992 Starbucks
decertified the union
and made IPO.

1995 Starbucks
Coffee International
opens in Japan
Starbucks
implemented ESOP.

IT IS NOT JUST COFFEE, IT IS STARBUCKS COFFEE

LOGO

IT IS NOT JUST COFFEE, IT IS STARBUCKS COFFEE

PRODUC
TS
Starbucks Corporation offers coffee products and caf
services throughout the world. It sells high-quality whole
bean coffees (from around the world) along with other
types of freshly brewed coffees, premium teas and
espresso beverages, hot and cold. It also offers various
sodas and juices, pastries and confectionery, coffeerelated accessories such as the Starbucks mugs, and
other caf related products such as the Starbucks CD.
Starbucks sells its special products through its companyoperated retail stores, warehouse club chains, office
coffee distributors, institutional foodservices such as
hotels and airlines, mail-order catalogs, and through its
electronic store.

MISSION
Company
Mission
Statement:
Establish Starbucks as
the premier purveyor of
the finest coffee in the
world while maintaining
our uncompromising
principles while we
grow.

Environment
al Mission
Statement:
Starbucks is
committed to a role of
environmental
leadership in all facets of
our business.

GOALS

Building
a
Compan
y with
Soul.

Opposing
Franchisin
g because
of Quality
Control
and
Culture.

Only
selling
coff ee
beans
without
artifi cial
fl avors.

Satisfy
custome
rs by all
means.

Employee
s
contributi
o-n and
involveme
nt in
making
Starbucks
a better
company.

SWOT
ANALYSIS

STRENGTH

- Starbucks is the market leader in the coffee

Market.
- Customers are satisfied with the quality and
taste of Coffee.
- High brand equity.
- Operating in 40 countries worldwide.
- Huge number of employees approx. 13
thousand.

WEAKNESS
- Pricing are higher as compared to the
competitors.
- High operating cost
- The business profits are highly
dependent on coffee product.

OPPORTUNITY

- Entry into Asian market like Pakistan, India and

Bangladesh.
- Market penetration in International countries.
- Co-branding with other food manufactures.
- Whole bean sales in supermarkets like.

THREATS:
- Numbers of competitors are increasing, like
Barista, Caf coffee Day, Gloria jeans coffee.
- Variation in coffee prices in developing countries
- People started to become more health conscious
- Labour Unions issues in US and international
countries
- Starbucks facing huge resistance in international
countries over cultural and political issues.

OPERATION
MANAGEMENT
GLOBAL
STRATEGY

INVENTURY
MANAGEMENT

COMPRTITIVE
STRATEGY

LAYOUT
STRATEG
Y

QUALITY
STRATEGY

PROCESS
STRATEGY

GLOBAL
STRATEGY
BY ALAA

IT IS NOT JUST COFFEE, IT IS STARBUCKS COFFEE

GLOBAL
STRATEGY
International
Strategy

- Businesses moving from domestic to an international strategy give the firm

greater return on its investments.
- In 1995, due to the saturation of the United States market, Starbucks
started to expand its business overseas.
- By 2001, Starbucks had more than 150 stores and plans to continue its
success.
- The company began by entering into joint ventures with local businessmen.
- Starbucks a strong expansion campaign, opened in foreign markets by
2001.
- This plan made the opening of over 600 stores located out of the United
States possible.
- More than 200 units including China, Japan, Kuwait, Lebanon, New Zealand,
Malaysia, the Philippines, Singapore, South Korea, Taiwan, and Thailand.

COMPETITIVE
STRATEGY
BY ALAA

IT IS NOT JUST COFFEE, IT IS STARBUCKS COFFEE

COMPETITIVE
STRATEGY
Focused differentiation
by serve niche buyers
better than rivals.

Starbucks has resources

and capabilities to
effectively serve an
attractive niche.

Buyers have distinctive

preferences, special
requirements, or unique
needs.

Costly or difficult for

multi-segment
competitors to meet
specialized needs of
niche members.

Have unique
capabilities to
serve needs of
target buyer
segment.

Big enough to be
profitable and offers
good growth
potential.

QUALITY
STRATEGY
BY SHOROQ

IT IS NOT JUST COFFEE, IT IS STARBUCKS COFFEE

QUALITY
STRTEGY
For Starbucks, quality simple
means.

The company even uses "mystery

shoppers.
Starbucks coffee buyers spend
about 18 weeks each year visiting
coffee growers and suppliers.
Starbucks gets the first pick of
some of the worlds best coffee
crops.

QUALITY
STRATEGY

Quality means conformance to standards:

be welcoming
be genuine
be considerate
be knowledge
be involved
TQM tools:
Continuous improvement .
Just-in-time (JIT).

PROCESS
STRATEGY
BY EBTEHAJ

IT IS NOT JUST COFFEE, IT IS STARBUCKS COFFEE

PROCESS
STRATEGY

Repetitive Focused
Strategy for
Frappuccion/Milkshak
es

- Modules combined for many output options (many cup

types & same cap type)
- Repetitive operations
- Just-in-Time inventory
- Fixed, well-known costs, due to experience
- Specialized equipment (coffee machines, customized
blenders, etc.)
- Well-trained staff (Starbucks policy to train coffee
specialists)

PROCESS
STRATEGY

IT IS NOT JUST COFFEE, IT IS STARBUCKS COFFEE

PROCESS
STRATEGY

- Is the process designed to achieve

competitive advantage in terms of
differentiation, response, or low
cost?
Yes, it is. Repetitive Focused
Strategy is an intersection
between Process Focused
Strategy and Product Focused
Strategy, hence it incorporates
advantages of the two.

- Does the process

maximize customer value
as perceived by the
customer?
Yes, thanks to
incorporating House of
Quality tool in the
design process.

Will the process

win orders?

- Does the process

eliminate steps that
do not add value?
Yes, it does, thanks
to the specialized
equipment and welltrained personnel.

It is possible, as
Starbucks strives to
take over the
coffee shakes
market niche with
its product.

LAYOUT
STRATEGY
BY AFNAN

IT IS NOT JUST COFFEE, IT IS STARBUCKS COFFEE

The idea behind the Starbuckss stores layouts was to

recreate the experience in the espresso bars in Italy

IT IS NOT JUST COFFEE, IT IS STARBUCKS COFFEE

In the U.S. customers want take-out service and a place to sit in

the store while having a drink

IT IS NOT JUST COFFEE, IT IS STARBUCKS COFFEE

Starbucks has become a third place for customers to go

to get away from daily hectic

IT IS NOT JUST COFFEE, IT IS STARBUCKS COFFEE

LAYOUT
STRATEGY

Starbucks Coffee Store Layout in a City in Michigan

LAYOUT
STRATEGY

Recommendations and suggestions

INVINTORY
STRATEGY
BY ALAA & ABRAR

IT IS NOT JUST COFFEE, IT IS STARBUCKS COFFEE

INVENTORY
STRATEGY
Inventory
management

The techniques that

Starbucks company use it
to manage their
inventory are

JIT
means all the
goods that are
available to sell in
the warehouse.

MRP

INVENTORY
STRATEGY
Corporatelevel

Reduce their price by producing a new product of coffee

using cheaper beans
ormaycomeoutwithspecialdiscounts
promotionstoincreasethe sales.

Business level
Starbucks can effectively pursue Focus-Based Strategy in
conjunction withdifferentiation orcost leadership based
strategy.

Functionallevel
Advertisement can developthrough internetthat
servicesconvinced for usersto access, give the brochures, do
road shows, so that public come to know more about Starbucks
details.

CONCLUSION
Starbucks success is
achieved through a few
factors:
1. Outstanding Quality of the coffee.
2. Excellent service provided at the
stores
3. Fast growth of new stores all around
the world.

These factors not only have

increased the sales but also
the reputation among the
coffee lovers.

REFERENCES

Starbucks Official Site

http://www.starbucks.com/
Starbucks Details Strategy for Profitable Growth
http://news.starbucks.com/news/corporate+news/financial/2009+annual+meeting+of+shareholders.htm
Starbucks - Design of Goods and Services
http://www.oxbridgewriters.com/essays/finance/design-of-goods-and-services.php
Starbucks Strategy
http://www.slideshare.net/tommy2cruise/starbucks-strategy
Starbucks SWOT Analysis
http://www.slideshare.net/shahkiran79/starbucks-swot-analysis
Starbucks Marketing
http://www.slideshare.net/Heekuk/starbucks-marketing
Starbucks Global Strategy
http://brainmass.com/business/international-business/402609
Operation Management
http://dc169.4shared.com/doc/XnYqb0C-/preview.html
Starbucks Final Presentation
http://www.slideshare.net/guest020532/starbucks-final-presentation
Berger, A., Buchman, J., Chase, D. & Hsu, S. (2003). Starbucks. Retrieved on November 12, 2009 from,
http://74.125.153.132/search?q=cache:z1kF8ZdXtXoJ:www.loudoffice.com/donald/resume/portfolio/Starbucks
.ppt+STARBUCKS+
B+managing+quality&cd=2&hl=tl&ct=clnk&gl=ph.
Thompson, A. & Gamble, J. (1999). Starbucks Corporation. New York: The McGraw-Hill Companies. Retrieved on
November 12, 2009
Starbucks Website (2009). Starbucks, Inc. Retrieved on November 12, 2009 from, http://news.starbucks.com.

THANK
YOU

IT IS NOT JUST COFFEE, IT IS STARBUCKS COFFEE