starbucks global quest in 2008: is the best yet to come?
DESCRIPTION
TRANSCRIPT
STARBUCKS COFFEE
Antoine MarionBayou JulieHazet CharlesHéberlé CamilleHelson Yohann
“We aren’t in the coffee business, serving people. We are in the people business, serving coffee”, Howard Schultz (2004)
Problem Statement
Starbucks Global Quest in 2006:
Is the best yet to come?
1. Starbucks’ overview
2. Business model
3. Internal and external analysis
4. Recommendations
Summary
Starbucks’ overview
20,366 stores in 61 countries
Largest coffeehouse company in the world
Founded in 1971
1
Business model
High quality products
Customer’s experience
Added value in stores
High attendance location
Take away culture
Customer willingness to pay:
HIGH
HIGH MARGIN PRODUCTS
2
INTERNAL & EXTERNAL ANALYSIS
3
PestelOpportunities Threats
Political • International government trade regulation & tariffs
• Foreign politic
Economic • F&B demand• International market
• Crisis• Competition• Rents and wage rates• Exchange rate and taxation
Social • Health consciouness• Cultural differences
Technological • Self serving machines• Bio technologies /
agricultural development
• Competitor’s distribution lines
Environmental • CSR
Legal • Environmental regulations• F&B industry regulation
MAIN FACTOR: EXTERNAL & SUSTAINABLE TRADE 4
Porter
HIGH COMPETITIVE / ATTRACTIVE MARKET
Competitive rivalry
+++
Substitute
products
-
Customers
++
New entrants
+++
Suppliers
++
COMPETITIVE RIVALRY- Intercept customers- Price competition- Independents
SUPPLIERS- Volatility of prices- Export quotas
SUBSTITUTES- Snacks- Soft drinks
CUSTOMERS- Price sensitive
(financial crisis)- Loyalty
NEW ENTRANTS- Low barriers- Social media
5
SWOTStrengths
• Loyalty• Image
Weaknesses
• Communication• Expensive products
Opportunities
• International market• Fair Trade
Quality products Customers’ awareness
Threats
• Competition• Customer’s purchasing
power
Quality experience Orientation of customers’ choice
OPPORTUNITIES FOR INTERNATIONAL EXPANSION 6
Mapping
+
+
Brand image
Price
PREMIUM PRODUCTS 7
Key success factors
Management Brand management Geographic coverage Sustainable management
of employees
Quality Quality control Good coffee knowledge
8
Corporate Strategy 1 market Several
products
Strategy (until 2006)
Diversification by acquisition
Rapid Store expansion + focus on location
by joint venture by partnership
9
CSR Strategy
• Fair Trade• A « great place to work »• Conservation International partnership (1998)• The starbucks foundation (1997)
« We've always believed that businesses can - and should - have a positive impact on the communities they serve. »
10
Financial analysis
2000 2001 2002 2003 2004 20050
1
2
3
4
5
6
7
8
9
Net Margin Income (%)
2005$3 million in long-term debt$1,8 billion in net investment$193 million long term liabilities
Healthy situation
How to continue in this way?
11
OUR RECOMMENDATIONS
12
Two Alternative strategies
World expansion
• Continue domestic expansion
• Worldwide expansion: Huge opportunities in BRIC
Customers’ Experience
• Improve stores’ atmosphere
• Enhance « Third place » concept
13
Decision gridCritical Issue Weight World
expansioncustomer’s experience
Brand and reputation
0.4 4 10
Competitive advantage
0.3 6 9
Financial impact 0.2 4 6
Ease of setting up
0.1 3 5
TOTAL 1 4,5 8,4
FOCUS ON CUSTOMER’S EXPERIENCE14
Customer’s experience Strategy
• Continuity of innovation in the coffee business
• Customer Relationship Management
• Adaptation to local markets
• Collector products
CHALLENGE THE STATUS QUO 15
…THE BEST YET TO COME!
16
With this strategy…
Thank you for your attention!
Any questions?