4. About Starbucks
Overview
Specialty Eatery in the Quick-Service Restaurant sector
Established in 1971 in Seattle, Washington
Named after the first mate in Moby Dick
Known for its quality coffee and stylish atmosphere
Over 9,000 locations in 35 countries
New CEO: Jim Donald (2005)
5. About Starbucks
Timeline
1971 – First Starbucks coffee shop opens in Seattle’s Pike Place Market – coffee bean roasting
company
1985 – Howard Schultz becomes CEO and founds Il Giornale Coffee Company – espresso
beverages using Starbucks coffee beans
1987 – Changes name to Starbucks Corporation
1992 – IPO under the trading symbol “SBUX”
1995 – Starbucks Coffee International opens in Japan
1996 – Begins selling bottled Frappuccino drinks
1999 – Acquires Tazo Tea company and Hear Music company
2003 – Acquires Seattle’s Best Coffee
2005 – Introduces Starbucks Coffee Liqueur; Acquires Ethos Water
6. About Starbucks
Mission Statements
Company Mission Statement:
“Establish Starbucks as the
premier purveyor of the finest
coffee in the world while
maintaining our uncompromising
principles while we grow.”
Environmental Mission Statement:
“Starbucks is committed to a role
of environmental leadership in all
facets of our business.”
7. About Starbucks
Corporate Social
Responsibility
“Starbucks focuses its efforts on improving social and economic
conditions for coffee farmers; minimizing our environmental impact;
making a positive contribution in the communities where we do business;
and providing a great work environment for our partners (employees).”
Make Your Mark – matches cash contributions for volunteer work to
designated nonprofits
2004 EnviroStars Recognized Leader Award – for environmental
leadership in the Seattle community
C.A.F.E – Coffee and Farmer Equity – environmentally, socially, and
economically guidelines for buying coffee from farmers – promotes
mutually beneficial relationship
8. About Starbucks
Target Market
Starbucks says that they do not
target a specific market
Products are consumed by
people who want to take a
break from the daily work
routine and those who want a
caffeine stimulant
Distinguished from traditional ‘coffee shop’ because of the
taste of the coffee and the ‘hip’ or ‘fashionable’ store
environment
10. Four P’s Analysis
Products (in store)
Starbucks sells brewed coffees,
espresso beverages, cold blended
beverages, food items, teas,
branded coffee drinks, a line of
ice creams, and a line of compact
discs through its retail stores
Also offers pastries, sodas, juices, games, seasonal novelty
items, and coffee-related accessories and equipment
11. Four P’s Analysis
Products
Starbucks also engages in
purchasing, roasting, and
selling whole bean coffees
worldwide to grocery stores and
large hotels
12. Four P’s Analysis
Price
Prices range from $1.00-$4.20 for drinks
Surprisingly, this is lower than its rivals, although
not by much
Starbucks regular coffee was 4% less expensive
and its iced blended drinks were as much as 30% less
expensive when compared with specialty competition
When compared to quick-service restaurants, however,
Starbucks was more expensive. Dunkin’ Donuts’ 16-ounce latte
is an average of 17% cheaper
13. Four P’s Analysis
Prices on the Rise
Starbucks is planning to
raise prices this year
because of an increase in
milk and green coffee bean
prices
This could also be due to the
fact that specialty
competition has been
charging more
14. Four P’s Analysis
Locations
Operates in all 50 states
plus the District of Columbia
and Puerto Rico.
They also operates in 34
countries outside the United
States such as Australia,
Canada, China, Germany,
Singapore, Thailand, and the
United Kingdom to name a
few.
15. Four P’s Analysis
More on Locations
Starbucks retail stores are typically located in high-traffic, highvisibility locations.
Because the Company can vary the size and format, its stores
are located in or near a variety of settings, including downtown
and suburban retail centers, office buildings and university
campuses.
The Company can also locate retail stores in select rural and offhighway locations to serve a broader array of customers outside
major metropolitan markets and further expand brand awareness.
16. Four P’s Analysis
More on Locations
While the Company selectively locates stores in shopping malls,
it focuses on locations that provide convenient access for
pedestrians and drivers.
To provide a greater degree of access and convenience for nonpedestrian customers, the Company has increased focus on
drive-thru retail stores.
At the end of fiscal 2004, the
Company had approximately 700
Company-operated drive-thru
locations
17. Four P’s Analysis
Promotions
Starbucks has been able to use a standardized advertisement
theme around the world in order to incorporate different
cultures.
Currently they are promoting their new Tazo green tea
Frappuccino Blended crème. (Inspired by Japanese tradition)
19. S.W.O.T Analysis
Strengths
Starbucks Corporation is a very profitable organization,
earning $600 million and generating revenue of $5 billion in
2004.
Ad Week Magazine recognized the Company as one of the
“Most Trusted Brands” in 2003. “The Starbucks logo is
recognized by most, which also helps to retain customers that
travel internationally, allowing them to get the same Starbucks
coffee in the same Starbucks cup that they enjoy back home.”
20. S.W.O.T Analysis
Strengths (continued)
It is a global coffee brand built upon a reputation for fine
products and services. It has about 8500 stores in over 30
countries.
Starbucks was one of the Fortune Top 100 Companies to
Work For in 2005. The company is a respected employer that
values its workforce.
They have strong ethical values and an ethical mission
statement as follows, “Starbucks is committed to a role of
environmental leadership in all facets of our business.”
21. S.W.O.T Analysis
Weaknesses
Starbucks has a reputation for new product development and
creativity. However, they are dependant on a main competitive
advantage, the retail of coffee.
Overcrowding the Market: If Starbucks has two stores close to
each other, they potentially take business away from each other.
They have a strong presence in the United States with more
than three quarters of their cafes located in the home market.
Many have said that they need to look for a portfolio of
countries, in order to spread business risk.
22. S.W.O.T Analysis
Weaknesses (continued)
They have been facing certain difficulties in some of its
international operations. In 2003 Starbucks ended its joint
venture in Shalom in Israel and closed six stores in Tel Aviv.
There was the infamous situation after September 11, when the
Starbucks in Manhattan charged firefighters outrageous prices
for water, $130 for three cases.
26. S.W.O.T Analysis
Opportunities (continued)
Current Locations 2003
Market Expansion
China & Europe
Suria KLCC- Mall at the base of the
Petronas Twin Towers; KL, Malaysia
Menu Expansion?
Full Service Breakfast &
Lunch Eatery?
29. Current Events
Ethos Water
Five cents from the sale of each bottle of
Ethos(TM) Water will support Starbucks
goal of donating $10 million over the next
five years to non-profit organizations that
are helping to alleviate the world water
crisis.
30. Current Events
Giving Voices
The grant program -- called "Giving Voice" -- will primarily
fund educational initiatives for youth, aged between six and 18
years old, in the arts, literacy, and environmental education.
The grants will range from $5,000 to $20,000 and will be
awarded twice a year.
31. Sources
Brewing Equipment; http://www.starbucks.com/retail/brewing.asp
Card; https://www.starbucks.com/card/default.asp
Datamonitor - Starbucks Corporation;
http://www.investor.reuters.com/data/files/Company%20Profile%20Sample%20for%20Reuter
Ethos Water;
http://www.fortune.com/fortune/investing/articles/0,15114,1089995,00.html?promoid=ya
Giving Voice; http://biz.yahoo.com/bw/050802/25224.html?.v=1
Hear Music—Norah Jones;
http://www.starbucks.com/hearmusic/product.asp?category%5Fname=Our+Compilation
Ichiro Card;
https://www.starbucks.com/card/exclusives.asp?category%5Fname=Exclusives&produc
Jim Donald brings new energy to Starbucks CEO post; 31 March 2005;
http://seattlepi.nwsource.com/business/218261_starbucks31.html.
32. Sources
(continued)
Marketing Teacher; http://www.marketingteacher.com/
SBUX: Profile for STARBUCKS CP - Yahoo! Finance
Shareowner: Starbucks corporation
Starbucks Apologizes for Water Flap;
http://www.foxnews.com/story/0,2933,35198,00.html
Starbucks Company Fact Sheet; August 2005;
http://www.starbucks.com/aboutus/Company%20Fact%20Sheet%20Apr05.pdf.
Starbucks Company Profile; August 2005;
http://www.starbucks.com/aboutus/CompanyProfileFeb05.pdf.
Starbucks Company Timeline; August 2005;
http://www.starbucks.com/aboutus/CompanyTimelineFeb05.pdf.
Starbucks Corporation; http://www.starbucks.com/default.asp
Starbucks Everywhere; http://www.starbuckseverywhere.net
The Insider: Starbucks' prices won't be cheaper for much longer
Wireless Internet; http://www.starbucks.com/retail/wireless.asp
Yahoo! Finance; http://finance.yahoo.com