Starbucks Presentation Son

7/31/2019 Starbucks Presentation Son

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ATAKAN NAL 2521

BAHADIR DURAN 2417

ALAR EREL 2500

KEMAL UAR 2504

LEVENT BOZKURT 2542


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Founded in 1971 by Gordon Bowker, Jerry Baldwin, and Zev Siegl, who

joined forces to open a coffee shop in Seattle, Washington.

By 1972, with the success of the first store, they opened a second store in

University Village, Washington.

Its wholesale business, which sold coffee primarily to local restaurants,

changed its name to Caravali.

In the next 10 years, the business expanded to five stores and hired

Howard Schultz to manage retail sales and marketing.

There are 16858 stores in 50 countries.


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VISION

To inspire and nurture the human spirit-

one person, one cup, and one

neighborhood at a time


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MISSION STATEMENT

Our Coffee

It has always been, and will always be, about quality. Were passionate about ethically

sourcing the finest coffee beans, roasting them with great care, and improving

the lives of people who grow them. We care deeply about all of this; our work is

never done.

Our Partners

Were called partners, because its not just a job, its our passion. Together,

we embrace diversity to create a place where each of us can be ourselves. We

always treat each other with respect and dignity. And we hold each other to that

standard.

Our Customers

When we are fully engaged, we connect with, laugh with, and uplift the lives of our

customerseven if just for a few moments. Sure, it starts with the promise of a

perfectly made beverage, but our work goes far beyond that. Its really about human

Connection.


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MISSION STATEMENTS

Our Stores

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. Its about enjoyment

at the speed of lifesometimes slow and savored, sometimes faster. Always full of

humanity.

Our Neighborhood

Every store is part of a community, and we take our responsibility to be good neighborsseriously. We want to be invited in wherever we do business. We can be a force

for positive actionbringing together our partners, customers, and the community to

contribute every day. Now we see that our responsibilityand our potential for

goodis even larger. The world is looking to Starbucks to set the new standard, yet

again. We will lead.

Our Shareholders

We know that as we deliver in each of these areas, we enjoy the kind of success that

rewards our shareholders. We are fully accountable to get each of these elements right

so that Starbucksand everyone it touchescan endure and thrive.


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MISSION STATEMENT EVALUATION

Customers YES

Protucts and Services YES

Markets NO

Concern for survival, growth and profitability YES

Technology NOPhilosophy YES

Self - Concept YES

Concern for public image YES

Concern for employees YES


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The reason of our existance is giving the most delicious coffee quickly which is grown

and prepared by careful hands. By the power of our coffee, we are trying connect

people and uplift the lives of them. When our customers feel this sense of belonging,

our stores become a heaven, a break from the worries outside, a place where you can

meet with friends. Its about enjoyment at the speed of lifesometimes slow andsavored, sometimes faster. We want to be invited in wherever we do business. We

enjoy the kind of success that rewards our shareholders. We can be a force for

positive actionbringing together our partners, customers, and the community to

contribute every day. The world is looking to Starbucks to set the new standard,

yet again. We will lead.

OUR MISSION STATEMENT


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EFE ANALYSISOpportunity weight rate

weighted

ave.

Stability in the economy in USA for 2 years (No increase in minimum wage) 0,07 4 0,28

Population increase at Asian- American and Hispanic segments in USA 0,02 1 0,02

According to the last scientific researches, "Coffee is a harmful drink" idea changed

oppositely 0,055 2 0,11

The coffee sales increased by %25 between 2005-2010. Sales were $18,839 million

dolars in 2010 0,08 4 0,32

The small companies have high risk for bankruptcy in the industry 0,055 1 0,055

In developing countries, coffee store culture is rising 0,08 3 0,24

Increasing demand on healthy and organic foods 0,04 4 0,16

Growing demand for eating outside 0,07 3 0,21total 0,47 1,395

Threatweight rate

weighted

ave.

Due to the effects of last economic recession in 2008, the consumers are more price

oriented on eating outside. 0,07 2 0,14

Climate change can play a huge role in the amount of coffee 0,06

3

0,18Labor costs are increasing rapidly in the change of economic situations 0,06 3 0,18

Food prices are increasing repidly in the change of economic situations 0,07 2 0,14

Wide range of direct and nondirect competitors 0,09 3 0,27

Mc Donald's entrance to coffee market with Mc Coffee with low prices 0,07 2 0,14

Quality of non beverage products (foods) would not be the same in different countries 0,055 3 0,165

Low-barriers for entry in to the market 0,055 1 0,055

total 0,53 1,27

2,665


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IFE ANALYSISStrength weight rate

weighted

ave.

Starbucks is one of the most attractive company for employment 0,05 4 0,2

Starbucks is the leader company in coffee industry from the point of market share andfinancial power 0,11 4 0,44

Reachable even beyond the starbucks shops 0,08 4 0,32

Globaly spreaded stores 0,08 4 0,32

Continuous research and development 0,06 3 0,18

Has a powerful franchising system 0,07 4 0,28

Powerful brand image 0,06 4 0,24

Confortable and relax environment 0,06 3 0,18Cutomer loyalty is high (The starbucks experience) 0,07 4 0,28

total 0,64 2,44

Weakness weight rate

weighted

ave.

They don't have a different international brand 0,06 1 0,06

They don't have market segmentation internationally 0,065 1 0,065

Managerial problems due to large range organisation 0,05 2 0,1

Adaptation to technological innovation is not enough 0,02 2 0,04

They don't have their own coffee farm 0,035 1 0,035

The high percentage of the operations is inside of USA 0,07 2 0,14

Digital and information department has just generated 0,03 2 0,06

They can't attract customers in the evenings as good as they do in day time 0,03 2 0,06

total 0,36 0,56

3


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CPM MATRIX

Starbucks Caribou Coffee Dunkin' Donuts Mc Donald's

Weight Rate Score Rate Score Rate Score Rate Score

Advertising 0,05 2 0,1 1 0,05 1 0,05 4 0,2

Product Quality 0,2 4 0,8 4 0,8 2 0,4 1 0,2

Price

Competitiveness 0,15 2 0,3 1 0,15 3 0,45 4 0,6

Management 0,1 3 0,3 3 0,3 3 0,3 3 0,3

Financial Position 0,1 4 0,4 2 0,2 3 0,3 4 0,4

Customer Loyalty 0,1 4 0,4 3 0,3 3 0,3 2 0,2

Global Expantion 0,2 4 0,8 2 0,4 2 0,4 4 0,8Market Share 0,1 4 0,4 2 0,2 3 0,3 3 0,3

1 3,5 2,4 2,5 3


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SOOPPORTUNITY STRENGTH ACTION

In developing countries, coffee

store culture is rising

Globaly spreaded

stores

Focus on market research in

developing countries and

increase the store number

(franchised or self_owned)at the most rapidly growing

markets

Population increase at Asian-

American and Hispanic segments

Continuous research

and development

Developing new products for

different cultural tastes

(Hispanic, Asian American)

Increasing demand on healthy and

organic foods

Continuous research

and development

Supporting agricultural farms

which has organic farmentrepreneurs

(Festivals, financial support,

sponsorships for exhibitons)

The coffee sales increased by %25

between 2005-2010.

Sales were $18,839 million dolars

in 2010

Has a powerful

franchising system

Focus on giving franchising to

the local big companies

to rapid grow in developing

countries.

The small companies have high risk

for bankruptcy in the industry

Starbucks is the

leader company in

coffee industry

from the point of

market share and

financial power

Chasing opportunities for

profitable horizontal

integration opportunities

SWOT


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WO

OPPORTUNITY WEAKNESS ACTION

In developing countries,coffee store culture is rising

The high percentage of

the operations is inside

of USA

Increase operations indeveloping countries

Increasing demand on

healthy and organic foods

They don't have their

own coffee farm

Backward integration to coffee

farms

to produce organic products

The small companies have

high risk for bankruptcy in

the industry

They don't have market

segmentation

internationally

Horizontal integration for local

coffee chains with their brand

Growing demand for eating

outside

They can't attractcustomers in the

evenings

as good as they do in

day time

Investment on differentrestaurant and coffee

segments

for serving different time of

the day

SWOT


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STTHREATS STRENGTH ACTION

Climate change can play a

huge role in the amount ofcoffee

Continuous researchand development


farms to produce moreefficiently

Mc Donald's entrance to

coffee market with Mc Coffee

with low prices

Powerful brand image

(cutomer loyalty)

Activities to increase customer

loyalty and to make the people

feel that

they can find their individual

self in Starbucks(Customer cards and database

for interests etc.)

Wide range of direct and

nondirect competitors

Reachable even beyond

the starbucks shops

Increasing Global

Development (Consumer

goods) in Europe

Low-barriers for entry in to

the market

Has a powerful

franchising systema

Attractive payment tables and

credit options for franchisers

(for growing rapidly in the

market by collecting interest of

investors)

SWOT


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WTWEAKNESS THREATS ACTION


huge role in the amount of

coffee


own coffee farm


farms to produce more

efficiently


nondirect competitors

They don't have a

different international

brand,


segmentation

internationally

Generating new brand to focus

on different segments of

customers.

Therefore, there will be aflexible pricing system for

competing

with different competitors

Food prices are increasing

rapidly in the change of

economic situations

Labor costs are increasing


economic situations

Labor costs are increasing


economic situations

Digital and informationdepartment has just

generated Using technological

developments to decrease

labour requirement

(Order systems, etc)Managerial problems

due to large range

organization

SWOT


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SPACE (The Strategic Position and Action Evaluation) Matrix

Internal Strategic Position

Financial Position (FP)

Competitive Position (CP)

comparing company with other companies

External Strategic Position

Industry Position (IP)

Stability Position (SP)

comparing industry with other industries


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Financial Position of Starbucks

Variables Starbucks Sector

Numerical

Value (1-6)

ROI 27,6% 14,16% 6

Leverage

Dept to

equity ratio 12,6% 67,5%

Long term deptto Total Capital

12,6% 79,90%

Liquidity Current Ratio 1,8 1,52 5

Cash Flow Price/cash flow 22,8 12,92 6

Inventory Turnover 6,5 33,12 1

Earnings per share 1,5 3,53 2

Price earnings ratio 33,2 20,73 6

Average 4,33


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Competitive Position of Starbucks

Variables

Numerical

Value

((-1)-(-6))

Market Share

Starbucks is the leader company in coffee

industry (16858 coffee shop in 50 countries) -1Product quality

"The starbucks experience" is the key factor

that distinguist Starbucks from other competitors. -2Customer loyalty

"The starbucks experience" is the key factor that

distinguist Starbucks from other competitors.

-2Control over

suppliers

and distrubitors

Starbucks is the leader company in coffee

industry (16858 coffee shop in 50 countries)-2

-1,75


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Industry Position

Variables

Numerical

Value (1-6)

Growth potential Industry %18 (Analyst estimates) 5Profit Potential

Growing demand for eating outside

In developing countries, coffee storeculture is rising 4

Financial StabilityStability in the economy in USA for 2 years

(No increase in minimum wage) 44,33


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Stability Position

Variables

Numerical

Value((-1)-(-6))

Rate of inflationStability in the economy in USA for 2 years (No

increase in minimum wage) -3Demand variability


In developing countries, coffee store culture is rising -4Price range of competing

products

Mc Donald's entrance to coffee market with Mc

Coffee with low prices -5Competitive pressure Wide range of direct and nondirect competitors -4Price elasticity of demand

Mc Donald's entrance to coffee market with Mc

Coffee with low prices -4

Risk involved in business


In developing countries, coffee store culture is rising

The coffee sales increased by %25 between 2005-

2010.

Sales were $18,839 million dolars in 2010-1

-3,5


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SPACE MATRIXCalculationsSP Average is -3,5 IP Average is 4,33CP Average is -1,75 FP Average is 4,33Directional Vector Coordinates: x-axis: -1.75 + (+4 .33)= +2,58y-axis: -3,5 + (+4.33) = 0,83

Conclusion Aggressive ProfileA financially strong firm that has achieved major competitive advantages in a growing and stable industryStrategies

Backward,forward,horizontal integration

Backward integration for foods, buying the newly starting hopefull

organizationsMarket penetration

Market development Search for new markets in developing countriesProduct development Launching a new brand and concept for the other hours of the dayDiversification (related or unrelated) Increasing Global Development (Consumer goods) in Europa


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BCG Matrix

Relative Market Share PositionSector Leader 1.0

Industry Sales Growth Rate(In revenue) 11,41%


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BCG Matrix


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IE Matrix


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IE Matrix

The IFE Total Weighted Scores 3 Strong internal position

The EFE Total weighted Scores 2,67 Medium external position

Area IV

GROW AND BUILD

Backward, Forward, or Horizontal

Integration

Market Penetration

Market Development

Product Development


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GSM Matrix

Competitive Position Sector Leader 1

Strong

Competitive

Position

QUADRA

NT 1Market Grow Industry Sales Growth Rate(in revenue)

11,4

1%Rapid Grow


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GSM Matrix

QSPM Matrix


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QSPM Matrix

Key Factors

Investing on Far East

and Middle Asia

Backward integration

to coffee production

Acquire a bar chain for

Increasing Consumer

goods

Opening 100 new

Seattle Coffee

(Kore,China,Kazakhista

n,etc.) with franchising

system with local giant

sfirms

serving different time

of the day (eg: hard

rock Cafe)

to $10 million in 2013

in Europe

shops in USA and 50 in

Europe to compete

with Mc donalds

Threat weight AS TAS AS TAS AS TAS AS TAS AS TAS

Due to the effects of last

economic recession in 2008,

0,07 0 1 0,07 0 4 0,28 4 0,28

the consumers are more

price oriented on eating

outside.


huge role0,06 0 4 0,24 1 0,06 0 0in the amount of coffee

Labor costs are increasingrapidly in the

0,06 2 0,12 0 0 0 0

change of economic

situations

Food prices are increasing

rapidly in

0,07 1 0,07 4 0,28 0 0 3 0,21

the change of economic

situations


nondirect competitors 0,09 3 0,27 3 0,27 0 0 4 0,36

Mc Donald's entrance to

coffee

0,07 2 0,14 2 0,14 2 0,14 0 4 0,28

market with Mc Coffee with

low prices

Quality of non beverage

products (foods)

0,055 0 0 0 2 0,11 0

would not be the same in

different countries

Low-barriers for entry in to

the market 0,055 2 0,11 0 0 0 1 0,055

total 0,53

Investing on Far East

d Middl A i A i b h i f I i C d

Opening 100 new Seattle

C ff


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Key Factors

and Middle Asia

Backward integration to

coffee production

Acquire a bar chain for Increasing Consumer goods Coffee

(Kore,China,Kazakhistan

,etc.) with franchising

system with local giant

sfirms

serving different time of the

day (eg: hard rock Cafe)

to $10 million in 2013 in

Europe

shops in USA and 50 in Europe

to compete with Mc donalds

Opportunity

Stability in the economy in USA for2 years

0,07 0 0 3 0,21 3 0,21 3 0,21(No increase in minimum wage)

Population increase at Asian-

American

0,02 0 0 0 0 1 0,02and Hispanic segments in USA

According to the last scientificresearches, "Coffee is a harmful

drink" idea changed oppositely 0,055 2 0,11 0 0 3 0,165 2 0,11

The coffee sales increased by %25

between 2005-2010. Sales were

$18,839 million dolars in 2010 0,08 3 0,24 3 0,24 0 4 0,32 3 0,24

The small companies have high

risk for bankruptcy in the industry 0,055 0 0 0 0 0

In developing countries, coffee

store culture is rising 0,08 4 0,32 3 0,24 0 0 0

Increasing demand on healthy and

organic foods 0,04 2 0,08 1 0,04 0 2 0,08 0

Growing demand for eating

outside 0,07 3 0,21 0 4 0,28 0 3 0,21

total 0,47

TOTAL 1

Investing on Far East and Opening 100 new Seattle


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Key Factors

Investing on Far East and

Middle Asia


production

Acquire a bar chain for Increasing Consumer goods


Coffee

(Kore,China,Kazakhistan,etc.

) with franchising system

with local giant sfirms




Europe



Weakness weight

They don't have a

different international

brand 0,06 0 1 0,06 4 0,24 0 4 0,24


segmentation

internationally 0,065 0 0 4 0,26 0 4 0,26

Managerial problems

due to large range

organisation 0,05 0 0 0 0 0

Adaptation totechnological

innovation is not

enough 0,02 0 0 0 0 0


own coffee farm 0,035 0 4 0,14 0 0 0

The high percentage of

the operations is inside

of USA 0,07 3 0,21 0 0 3 0,21 0

Digital and information

department has just

generated 0,03 0 0 0 0 0

They can't attract

customers in the

evenings as good as

they do in day time 0,03 0 0 4 0,12 0 0

total 0,36


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Key FactorsC

Investing on Far East and

Middle Asia


production

Acquire a bar chain for Increasing Consumer goods


Coffee

(Kore,China,Kazakhistan,etc.)

with franchising system with

local giant sfirms




Europe



Strength weight

Starbucks is one

of the most

attractive

company for

employment 0,05 3 0,15 3 0,15 3 0,15 0 3 0,15

Starbucks is the

leader company

in coffee industry

from the point of

market share and

financial power 0,11 3 0,33 4 0,44 0 4 0,44 3 0,33

Reachable even

beyond thestarbucks shops

0,08 0 3 0,24 1 0,08 4 0,32 0

Globaly spreaded

stores 0,08 2 0,16 0 0 3 0,24 2 0,16

Continuous

research and

development0,06 2 0,12 2 0,12 0 2 0,12 0

Has a powerful

franchising

system 0,07 4 0,28 2 0,14 4 0,28 0 4 0,28Powerful brand

image 0,06 4 0,24 2 0,12 4 0,24 4 0,24 1 0,06

Confortable and

relax

environment 0,06 0 0 4 0,24 0 0

Cutomer loyalty is

high (The

starbucks

experience)0,07 1 0,07 1 0,07 4 0,28 4 0,28 1 0,07

total 0,64TOTAL 1 3,23 3 2,58 3,015 3,525


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CURRENT SITUATION IN 2012

no focus => no effective impact

Supporting the farmers to increase the quality of the coffee beans

Tend to service for different individual demands

Opens new Seattle Coffee shops in USA

In Britain they increased the sales of consumer goodLean operation researches are generated to decrease labor cost


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CONCLUSION

Opening 100 new Seattle Coffeeshops in USA and 50 in Europe to compete withMc Donalds 3,23

Investing on Far East and Middle Asia

(Kore, China, Kazakhistan etc.) with franchisingsystem with local giant firms 3,525


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REFERENCES

Cnbc.com

Forbes.com

Finance.yahoo.com

Starbucks.com

Concept and Cases


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