case study
TRANSCRIPT
CASE STUDYSTARBUCKS COFFEE
BACKGROUND
• An American coffee company and coffee house chain
• Founded in 1971 in Seattle
• Howard Schultz joined in 1982
• Has 16,700 stores worldwide, 142,00 employees
• $ 9.8 billion generated as revenues every year
PRODUCTS
Whole-bean coffee
Microground instant coffee aka VIA
Espresso
Caffe latte
Teavana tea products
Evolution Fresh juices
Frappuccino beverages
Sandwich
Muffins
Brownie
Cookie
Roulade
Wraps
Salads
Croissant
Drinkware (mugs and tumblers)
Raw coffee and tea beans
StarBucksaccessories and goodies
“to inspire and nurture the human spirit – one person,
one cup and one neighbourhood at a time.”
“We are passionate about ethically sourcing the finest coffee beans, roasting them
with great care and improving the lives of people who grow them.”
“We’re called partners, because it’s not just a job, it’s 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.”
“When we are fully engaged, we connect with, laugh with and uplift the lives of our customers – even if
just for a few moments. Sure, it starts with the promise of a
perfectly made beverage, but our work goes far beyond that.”
PRINCIPLES
GOALS
Building a company with a soul
Customer Satisfaction
Contribute back to
the society
Best quality products
and service
SWOT ANALYSIS
STRENGTH
World leader in coffee industry
Has outlets all over the world
and has high brand equity
Products are of high quality and
unique
SWOT ANALYSIS
WEAKNESS
High priced product than competitors
Higher operating cost as coffee
beans have to be imported
Only famous of its different coffee
products thus highly dependent on it
SWOT ANALYSIS
OPPORTUNITY
Has huge potential market in developing countries like India
Higher operating cost as coffee beans have
to be imported
Can join venture with supermarkets to sell its high quality
coffee beans
SWOT ANALYSIS
Threat
Faces huge competition from cheaper and famous brands
Local Culturaland political
issues trouble the establishment
Reports suggests usage of contaminated beans that health conscious consumers are worried
of
FUN FACTS#1
“There are over 87,000 possible drink combinations at Starbucks”
FUN FACTS#2
“At $300 million, Starbucks spends more on healthcare insurance for its employees than on coffee beans”
ETHICAL SOURCING
Starbucks has partnered with conservation international.
This will ensure coffee it purchases is of highest quality.
Moreover it ensure that the coffee has been responsibly grown and ethically traded.
ENVIRONMENT
Starbucks has created world’s first recycled beverage cups.
This will mean conserving 78,000 trees every year
They also emphasise energy and water conservation and building green, LEED-certified building around the world.
Social responsibility
The Starbucks foundation supports literacy programs in the US and Canada and has donated millions of dollars to charities
The Starbucks foundation supports literacy programs in the US and Canada and has donated millions of dollars to charities
Starbucks’ employees volunteer community service hours in events such as during any disaster.
Starbucks’ employees volunteer community service hours in events such as during any disaster.
Starbucks is also a partner in PRODUCT(RED) that helps to fight and stop spread of HIV in Africa.
Starbucks is also a partner in PRODUCT(RED) that helps to fight and stop spread of HIV in Africa.
CASE REVIEW QUESTIONS TO PONDER UPON
Starbucks has worked hard to act ethically and responsibly. Has it done a good job communicating its efforts to consumers? Do consumers believe Starbucks is a responsible company? Why or why not?
Starbucks charges a premium price for coffee, and does it so because it is able to market to consumers that this good quality coffee, has been ethically sourced and served by a responsible company.
Starbucks employees volunteer in community service and it partners initiatives to support literacy programs and fight and stop spread of HIV in Africa.
Starbucks shares its message regarding ethics and social responsibility on its corporate website. Then there many international reports publishing the social work and ethical practices incorporated by Starbucks.
Where does a company like Starbucks draw a line on supporting socially responsible programs? for example, How much of its annual budget should go towards these programs? How much time should employees focus on them? Which program should it support?
The Starbucks Foundation supports literacy programs. They even partner with international NGOs to foster programs. It also donates 5 cents from every sale of its Ethos bottled water to improve quality of water in poor countries, $ 10 million dollar pledge.
Starbucks employees volunteer in community service and it spends a huge sum on CSR. In my opinion it should re evaluate the strategy and focus to support concepts that promote their brand as well.
Starbucks must support programs for the upliftmentof poor farmers. Moreover programs like voluntary community service by employees send a very good positive image in everybody’s minds.
How do you measure the results of starbucks’s socially responsible programs?
Starbucks’s social responsibility strategy is based on three pillars: Community, Ethical Sourcing and the Environment.
These programs are a certain hit as they aim to improve the lives of people and quality of products to the consumer.
Starbucks promotes its social responsibility activities a lot on online but on the other hand fights with the government for its moves such as stricter pollution standards
Still it has supported NGOs, funded literacy programs, organized community service whenever need arises. These certainly creates a positive image of its brand.
SUMMARY
• Background and products offered by starbucks
• Principles and goals
• SWOT ANALYSIS
• Three pillars: ethical sourcing, community and environment
• Closer look at starbucks
DISCLAIMER
Created by SAURABH BOSE,VNIT Nagpur during a marketing internship by
Prof. Sameer Mathur, IIM Lucknow