Starbucks Rev 2 - LATEST

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Presentation Outline About StarbucksOverview Timeline of Starbucks Starbucks Values Starbucks Mission Statement Starbucks Environmental Mission Statement Starbucks 6 Guiding Principles Corporate Social Responsibility

Macro-Environmental Analysis Economics Political/Legal Demographics Social/Cultural Technological

Malaysia Industry Analysis

SWOT Analysis Competitive Analysis Internal Analysis Target Market Segment Product Life-Cycle & Sales Trend Analysis The Starbuck Model Marketing Strategies Placement Strategies Promotion Campaign Plan

Conclusion Recommendation


OVERVIEW Established in 1971 at Seattle, Washington Famous for its quality fresh-roasted coffee beans and stylish atmosphere. Over 9,000 stores worldwide Product lines include : beverages (coffee, Tazo tea, soda, juices) pastries whole coffee beans coffee-related hardware and equipment merchandise (mug, CDs)



Starbucks Values STARBUCKS VALUES Passion for Everything We Do Integrity Entrepreneurial Spirit & Drive Pride & Success Respect for Our Partner

STARBUCKS MISSION STATEMENTEstablish Starbucks as the premier purveyor of the finest coffee in the world while maintaining our uncompromising principles while we grow.

STARBUCKS ENVIRONMENTAL MISSION STATEMENTStarbucks is committed to a role of environmental leadership in all facets of our business.

CORPORATE SOCIAL RESPONSIBILITY Focuses its efforts on: Improving social and economics conditions for coffee farmers Minimizing environmental impact; Making a positive contribution in the communities where they do business; and Providing a great work environment for their partners (employees).

Established the Starbucks Foundation in 1997

Corporate Social CORPORATE SOCIAL Responsibility RESPONSIBILITY (contd)of CARE, worldwide relief and A major contributor development organization (Health, Education, and Humanitarian aid) Provides financial support to community literacy organizations Participate in local charitable projects 2004 EnviroStars Recognized Leader Award for its community service and environmental activities


MALAYSIA INDUSTRY ANALYSISThe coffeehouse business has grown every year. Lifestyle factors converge to make the coffee industry strong at all times. Coffeehouse provides calm, invigorating ambiance for people to socialize, relax or catch up on work. Coffee drinking is now an all-day activity. Not unusual for a well located coffeehouse to exceed a daily average of 900 customers. The business of coffeehouse definitely will continue to grow intensely.

FINANCIAL REVIEW 2008 Starbucks Malaysia, which became a 50% associated company of the Berjaya Group during the financial year, registered a 26.2% and 4% increase in revenue and pretax profit respectively as compared to the previous year. This is mainly due to the growth of new stores and growing popularity of the brand and its products.

FINANCIAL REVIEW 2008 Thus led to More new customers visiting the stores Increased frequency of visits by existing customers as the company expands its stores to new states and towns in Malaysia. Opening 21 stores Bringing the total number of Starbucks Coffee stores to 109 stores nationwide. Consistency in introduction of new and innovative food and beverage products.


FINANCIAL REVIEW 2008(contd) Complimentary WIFI service offered at all Starbucks stores nationwide continued to be well received by customers who used the facility for both business and leisure. The company launched a strategic coffee knowledge program in all its stores, called Coffee Seminars conducted by certified coffee masters. Starbucks is committed to opening more stores as well as introducing new store designs and programs to cater to the various needs of its customers.



In a time of inflation when the purchase of non-essential items is down, Starbucks is feeling the effects. 600 Starbucks locations will close by mid-year 2009 12,000 employees will lose their jobs. Offer relocation packages to many employees, severances to others. In response to competition and imitators, Starbucks now offers the bottomless $1.00 coffee. Fewer than 200 new US locations will be opened in 2009 in comparison to 900 new US locations projected to be opened in 2008.

Economic growth in countries where Starbucks operates, such as USA, Pacific Asia and Europe, stipulates the firms growth strategies. The Starbucks business depends on economic factors in developing countries, where it buys the coffee beans.

As Starbucks is expanding internationally, trade restrictions, tariffs, tax policies and employment laws of related to their business countries have influence upon Starbucks. Starbucks has to take into account very different political situations in countries from which it buys coffee and countries the company expands to: from extensive poverty and deep social inequality (Latin America) to the fast growing economy of Asia.

As predicted, by 2010 60% of the worlds population will live in the Asia Pacific region Starbucks had two class action suits pending since 2001: Carr vs. Starbucks and Sheilds vs. Starbucks Possible threats on a change in import laws for its imported coffee beans could greatly affect numerous areas of production for the company

People ages 15-64 make up the largest percentage of the US population Starbucks targets both males and females, mainly 18-30 year olds, but really does cater for everybody's needs Starbucks customers are mainly in their final years of high school, in university or just starting to work. All these customers have had a good education

Principles Towards Environment Understand environmental issues & share information with partners, Develop innovative & flexible solutions to bring about change, striving to buy, sell & use environmentally friendly products, Recognize that fiscal responsibility is essential to our environmental future, Instill environmental responsibility as a corporate value, measure & monitor progress for each project, and Encourage all partners to share in the mission

Participating and organizing activities such as neighborhood clean-ups and walk-a-thons Recycling and reusing of resources Buying policies Waste reduction Green Team to install the environmental views into trainees Consumer preferences could shift from coffee to other beverages

In line with the launching of Starbucks Shared Planet recently, Starbucks Malaysia has planned to achieve the following goals by 2010: Reaching 5,000 volunteer hours in 2009 across Malaysia. Achieving 2% target of customers using Starbucks reusable mug over paper or plastic cup in 2009. Conducting at least two community activities in support of local neighbourhood causes per district per year. Implementing in-store recycling starting from stores in the Klang Valley in 2009.

Organizing the first Starbucks Shared Planet Store Award Program in 2009. Establishing the first Starbucks Social Entrepreneurs project in 2009. Increasing energy conservation by 5% in 2009

Technologies allow Starbucks to offer the higher standard quality products Introduction of the Starbucks Card Most if not all Starbucks location have WI-FI for consumer needs Its computerized roasters allow the company to create unique computerized curves in roasting coffee beans.

Starbucks invests in research to obtain even better quality of roasting and various blending. Starbucks uses the Internet as a distribution mechanism and implement Internet cafes to attract customers. New methods of working such as mobile communication, intranet gives enables prompt communication .



STRENGT HS Product diversification Established logo, developed brand, copyrights, trademarks, website and patents Company operated retail stores, International stores (no franchise) High visibility locations to attract customers Valued and motivated employees, good work environment

Good relationships with suppliers Industry market leader Globalized Customer base loyalty Product is the last socially accepted addiction Widespread and consistent Knowledge based Strong financial foundation It is a global coffee brand built upon a reputation for fine products and services. It has almost 9000 cafes in almost 40 countries.

WEAKNE SSES Lack of internal focus (too much focus on expansion) Ever increasing number of competitors in a rowing market Cross functional management Product pricing (expensive) Starbucks has a reputation for new product development and creativity. However, they remain vulnerable to the possibility that their innovation may falter over time. Dependant on a main competitive advantage, the retail of coffee. This could make them slow to diversify into other sectors should the need arise.

OPPORTUN ITIES Expansion into retail operations Technological advances New distribution channels (delivery) New products Distribution agreements Brand extension

Emerging international markets Continued domestic expansion / domination of segment Co-branding with other manufacturers of food and drink, and brand franchising to manufacturers of other goods and services both have potential.

THREATS Competition (restaurants, street carts, supermarkets, other coffee shops, other caffeine based products) US market saturation Coffee price volatility in developing countries Negative publicity from poorly treated farmers in su