case # 5: starbucks coffee company

Case # 5: Starbucks Coffee company

Team MembersAbdul Majid

Umer Hayat

Azfar SajjadUsman Anwar

Faisal Ibrahim

Starbucks 07/31/2015

Table of Contents• Introduction• Vision Statement• Mission Statement (1990-2008)• EFE matrix• IFE matrix• CPM matrix• SWOT matrix• SPACE matrix• IE matrix• GRAND STRATEGY matrix• BCG matrix• Action Plan & Recommendations


History


• First Starbucks opened in Seattle Washington

• March 30, 1971

• Jerry Baldwin-English Teacher

• Gordon Bowker-Writer

• Zev Siegh – History Teacher

CONTINUE…

• Entrepreneur Howard Schultz joined the company

in 1982

• Director of Retail Operations and Marketing

• Idea of selling beverages


CONTINUE…• April, 1984 first store to sell beverages was opened

• Served 400 customers – over the 250 customer

average at their best store

• II Giornale Acquires Starbucks

• Howard Schultz – Starbuck’s President and CEO


CONTINUE…• World's premier roaster and retailer of specialty

coffee

• 8,812 company-owned stores

• 7,852 licensed stores in more than 50 countries


CONTINUE…• Annual sales of about $10 billion as of April 2010

• Sell : beverages, pastries, whole bean coffee,

ground coffee, and coffee-related products


VISION STATEMENT

To inspire and nurture the human spirit – one person, one cup and one neighborhood at a time.


Mission Statement1990 – October 2008

• Establish Starbucks as the premier purveyor of the

finest coffee in the world while maintaining our

uncompromising principles as we grow.


Competition

McDonalds Dunkin Donuts

Second Cup New World Coffee

Caribou Coffee


EXTERNAL FACTOR EVALUATION


External Factors Evaluation (EFE Matrix)

Weight Rating Weighted Score

Opportunities

International Markets .10 1 .10

Global expentipion .11 4 .44

Long-term Industry Growth .10 3 .30

New product mix .09 4 .36

Purchasing companies .10 1 .10

Strong financial support .12 4 .48

Threats

Terrorist Attacks & Safety issue .11 3 .33

New entrants .09 4 .36

Government Regulations .10 3 .30

US market saturation .08 3 .24

TOTAL 1.00 3.01

INTERNAL FACROR EVALUATION


Internal Factor Evaluation (IFE Matrix)

Weight Rating Weighted Score

Strengths Innovation .11 4 .44

Global presence .12 4 .48

Profitability .06 3 .18

Brand Recognition .10 4 .40

Store ambience .12 4 .48

High market share and market growth .06 3 .18

Limited number of strong competitors .06 3 .18 High quality customers service .08 4 .32

Weaknesses High employee turnover .10 1 .10

High prices .06 2 .12

Over dependence on US markets .05 2 .10

Too many products .08 1 .08

TOTAL 1.00 3.06

COMPETITIVE PROFILE MATRIX


(CPM) Starbucks McDonalds Dunkin

Donuts

3.072.76

3.20

1.00Total

0.2730.27

30.18

20.09Financial Position

0.3330.33

30.33

30.11Customer Service

0.3630.36

30.48

40.12Global Expansion

0.6840.51

30.68

40.17Customer Loyalty

0.4530.45

30.45

30.15Price Competitivenes

0.3630.36

30.36

30.12Product Variety

0.4230.28

20.42

30.14Advertising

0.2020.20

20.30

30.10Product Quality

ScoreRating

Score

Rating

Score

Rating

Weight

Critical Success Factor

COMPETITIVE PROFILE MATRIX

CPM of Star Bucks is 3.20 which is higher than its competitors so they have competitive advantage.

SWOT MATRIX


SWOT MatrixStrengths – S1) Profitability2) Brand Recognition3) Global Presence

Weaknesses – W 1) Uneven worldwide

distribution2) Product Pricing3) Overdependence on US

markets

Opportunities – O 1) Global Expansion2) New Markets3) Purchasing Companies

SO Strategies1) Re invest profit in new

markets2) Use its brand to sell new

products3) Expand global presence by

purchasing companies

WO Strategies 1) New markets will balance distribution2) Lower prices for new products3) Purchase companies to survive

Threats – T1) New entrants2) US market saturation3) Government Regulation

ST Strategies1) Offer better stakeholder

value2) Ensure a strong foundation3) Grow according to the rules

and regulations

WT Strategies 1) Enter into new countries before competition2) Lower prices in Asia

SPACE MATRIX


SPACE MatrixInternal Strategic Position External Strategic PositionFinancial Strength (FS) Rating Environmental Stability (ES) RatingReturn on InvestmentWorking CapitalNet incomePrice Earning Ratio

5664

Technological changesRate of inflationCompetitive pressureDemand VariabilityPrice Range of Competing Service

-3-3-2-5-1

FS average 5.25 ES average -2.80

Competitive Advantage (CA) Rating Industry Strength (IS) RatingMarket ShareService qualityCustomer loyaltyCompetition’s capacity utilization

-1-2-2-1

Profit potentialGrowth potentialFinancial StabilityResource utilization

6555

CA average -1.50 IS average 5.25

Conclusion:-Directional vector coordinates: X-axis -1.50 + 5.25 = 3.75 Y- axis 5.25 + (-2.80) = 2.45Therefore, the Starbucks should pursue Aggressive Strategy.

+6

+6-6

-6

SPACE Matrix FS

ES

ISCA

Conservative Aggressive

CompetitiveDefensive

(3.75, 2.45)

IE MATRIX


(IE) Internal & External Matrix

IFE Total Weighted Scores (3.06)

EFE Total Weighted Scores

(3.01)

Strong4.0 to 3.0

Average2.99 to 2.0

Weak1.99 to 1

High 3.0 to

4.0

GROW & BUILD

Medium

2.0 to

2.99

Low1.0 to

1.99

GRAND STRATEGY MATRIX


Grand Strategy MatrixWEEK COMPETITIVE

POSITION

RAPID MARKET GROWTH STRONG

COMPETITIVE

POSITION

Quadrant II Quadrant I

Quadrant III Quadrant IV

SLOW MARKET GROWTH

BCG MATRIX


Grand Strategy MatrixWEEK COMPETITIVE

POSITION

RAPID MARKET GROWTH STRONG

COMPETITIVE

POSITION

Quadrant II Quadrant I

Quadrant III Quadrant IV

SLOW MARKET GROWTH

Action Plan & Recommendations

• Enhance atmosphere– Entertainment to attract more customers

• Increase marketing• Advertise• Sales promotions• Promote healthy products


case # 5: starbucks coffee company

Business

Transcript of case # 5: starbucks coffee company