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What are the attractions and disadvantages
of Starbucks Corporation?
Presenter: Chi-Che Yuri Liang
Instructor: Dr. Pi-Ying Teresa Hsu
Date: Nov. 10, 2008
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? (26 Mar, 2008). Starbucks Corporation Company Profile. Datamonitor Business Information Company. Retrieved October 13, 2008, from: http://www.datamonitor.com/companies/company/?pid=E86AFA79-07E1-4115-AA0C-0016416541FE
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Content
I. Introduction
II. Purpose
III. Methods
IV. My opinion
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Wherever we are, we both have an
important ritual for starting most days.
We stop in to a Starbucks store for a cup
of coffee. -Howard Schultz, 2006 Chairman of Starbucks Corporation
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IntroductionMulti-international Corporation
(MNC)
Head Office Starbucks Corporation2401 Utah Avenue SouthSeattleWashington 98134USA
Argentina, Australia, Brazil, Canada, China, Colombia, Denmark, Egypt, France, Germany, Greece, Hong Kong, Indonesia, Ireland, Israel, Japan, …………50 countries↑
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Purposegreen coffee beans
and the coffee-related accessories
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SWOT Analysis
Strengths Weaknesses
a. Strong brand imageb. Wealthy financial performance c. Large scale of operations
a. Weak compliance functionb. Narrow product mixc. Low employee productivity
Opportunities Threats
a. New marketsb. Hear Music Labelc. Growing specialty coffee market
a. Intense competitionb. Volatile coffee pricesc. The Forbidden City
controversy
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Strength-Strong brand image
852008
882007
912006
RankRanking year
The 100 Top Brands 2006-2008 ranking of BusinessWeek and Interbrand an international branding consulting firm.
BEST GLOBAL BRANDS (2008). http://www.interbrand.com/best_global_brands.aspx
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3,607
3,099
2,5762005
Brand value ($m) Ranking year
2006
2007
2008 3,879
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Strength—Wealthy financial performance
28.6% Net profit (after tax)
28.6% Operating profit (gross profit)
24% Sales revenues
[Price (of product) X Quantity Sold]
Growth rateFinancial Performance
The company’s revenues, operating profit and net profit from 2002-2006
Compound Annual Growth Rate (CAGR). http://www.investopedia.com/terms/c/cagr.asp
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11.3% 15.3% Other industries
18%19%Starbucks
Investment Equity
(Stocks)
Companies
Company's average CAGR return on equity and investment during 2002-2006
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Strength—Large scale of operations
over 146,000 people Employees
more than 44 million people.Customers per week
over 13,000 locations in 39 countries Amount of stores
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59.5Diedrich Coffee
7,787Starbucks
Revenue ($m) Companies
225.3Green Mountain Coffee
Roasters (GMCR)
The revenues of Starbucks and two of its competitors in 2006.
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Weakness—Weak compliance function
Starbucks has been involved in several legal proceedings.
The company violated requirements of the *FLSA( Fair Labor Standards Act), a lawsuit was set from June 2004 to August 2007.
*FLSA: a federal labor law of general and nationwide application, including Overtime, Minimum Wages, Child Labor Protections, and the Equal Pay Act.
The company violated the California Labor Code by allowing shift supervisors to receive tips, a lawsuit was set from October 2004 to May 2007.
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Weakness—Narrow product mix
77%
15%
3%
5%beverages
food items
green coffee bean
coffee makingequipment andother merchandise
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Weakness-Low employee productivity
93,330Other industries
average
53,408Starbucks
Revenue($)Companies
The revenue per employee of Starbucks and other industries in 2006
Net profit($)
Diedrich Coffee 84,054
8,299
x
3,870
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Opportunity—New markets
Adobe Acrobat Document
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Opportunity—Hear Music Label
Starbucks and Concord Music Group,
in March 2007.
Hear Music record label
a. All traditional music retail outlets b. Starbucks locations.
a. Improve visibility of Starbucksb. Add stability to its revenues.
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Threat—The Forbidden City controversy
Negative advertisement in recent months (Report publication Date: 26 Mar, 2008)
Be conflicting with the rich Chinese culture of the Forbidden City
May create an impression among the public that the company is culturally numb, which would negatively impact its brand image.
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My research
TopicWhat will MNC modify to meet the satisfaction of diversified culture in different countries?-Take Starbucks in Taichung City as an example.
ParticipantsPeople who have the experience of drinking Starbucks coffee.
Methodology Approximately 300 questionnaire.
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Thanks for your attention!!