starbuks presenttion

7/27/2019 Starbuks Presenttion

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Presentation on MCCP

Case Study on STARBUCKS-Back to Basics

Submitted By:

Mahek Poddar 11057Jitendra Ratwani 11064

Heena Tewani 11079

Radhika Thakkar 11086

Ankit Yadav 11095

Submitted To: Prof. MIRAL PANDYA{Lecturer, TIMS-Adipur}


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SYNOPSIS

1970-80

1971:First store

opened in

Seattle by three

owners.

Initially it sold

coffee, tea and

spice.

By 1980:Became Largest

roaster of coffee

by 6 retail

outlets.

1980-90

1987: Howard

Schultz as CEO.

Conversion of

retail shops into

classy and

comfortable

coffee house.

1990-00

In 1990s it

expanded

rapidly.

1996: 1st

international

outlet in Tokyo.

1999: Acquired

Hear Music

Manual

espresso

machines

replaced with

automated ones.

2000-08

2000: Schultzretired from CEO &Orin smith thenJim Donald wereappointed as CEO.

2007: Slowdowndue to economiccrisis and otherreason.

2008:Schultzreturned as CEOand his newinitiatives broughtchanges in bringingback the Starbuckexperience.


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Case Viewpoint

The rapid expansion during the 1990s-2000s

reduced the exclusivity of the Starbucks brand.

In 2007, there was slowdown mainly due to

economic crisis that had an impact till 2008.

The case discusses the reasons for drop in

customer traffic and profits in 2008.


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Statement of problem

Installation of new automated espresso machine

limiting the interaction between baristas and

customers and diluting the Starbuckss experience.

It introduced hot food due to which the aroma of

coffee got diluted.

Cost of opening new stores as well as prices of coffee

and milk were touching new highs. Its major competitor Mc DONALDS priced its coffee 60-

80 cents lower and so there was a drip in sale of

STARBUCKSS coffee.


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Areas of Consideration

Bringing back their customers.

To decrease the number of its outlets &

lower their costs. To increase the international sales.

To increase the motivational levels of

employees and bringing back theStarbuckss experience.

To change management strategies.

Change in the menu card.


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Objectives

The companys objective is to establish STARBUCKS as the most

recognized and respected brand in the world.

Provide a great work environment and treat each other withrespect and dignity.

It aimed to become the one place outside of work and home where a

person could feel at home.

Focus on customer experience and innovation.

Profitability.


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FIVE INITIATIVES:

Introduction of semi automatic espresso

machine.

Complete reinvention of brewed coffee

in-store.

Introduction of loyalty program to

reward registered card holders. Launch of mystarbucksidea.com.

Relationship with CI to educate coffee

growers.

Course of Action by Schultz


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Training to baristas to relearn the art of coffeemaking.

Warm sandwiches were removed from the menu.

Free Wi-Fi services for 2 hours at company stores.

Introduction of new fruit- based drink & healthbeverages.


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(1) Advertisement:

The company invested less in advertisement.

Pros: It would help in increasing sales.

Cons: It would increase the expenditure of thecompany

Alternative Course of Action


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(2)Product line:

Starbucks should keep its focus on its main

product (coffee) rather than creating too many

additional products (Ice Cream, CDs, T- shirts,

Books)

Pros: Sales will continue to increase and itscustomers will regularly get same quality product.

Cons: The customers would be least attracted.


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(3)Status quo:

Starbucks could maintain their status quo.

Pros: Starbucks will not incur any new expenses by

expanding into smaller markets.

Cons: If Starbucks remains the same, they will not

reach new potential consumers. Thereby, profits

may begin to fall.


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Plan of Action

We therefore conclude that company should

maintain status quo but also should advertise its

product in newspaper, television etc. to attractcustomers and increase sales and there by

reduce its cost in future.

As per our survey Starbucks historically invested

very little in advertising - less than $100 million

in its entire history.


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Concepts Related to Case

(A) Total Quality Management (TQM):

It launched mystarbucksidea.com which invited

suggestion and ideas from registeredcustomers.The top rated suggestion were been

implemented by the company.

Starbucks was obsessed with quality and took

care while choosing coffee beans and also

developed process of roasting as an art.


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(B) Green Management:

Starbucks and CI made efforts to educate

coffee growers on the most eco-friendlymethods of farming as well as on

protecting the land, water, and forests

that surrounds their farms.


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(C) Growth strategy:

Forward vertical integration: from being a small

sized company with around 165 stores in the us in

1992, Starbucks became a global behemoth with

around 15000 stores in more than 40 countries by

early 2008.

Horizontal integration: in 1998, it entered the UKby acquiring the UK based seattle coffee company

and renamed the existing stores to Starbucks.


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(D) Renewal strategy: After facing economic crisis in 2008 with rapid expansion

Schultz decided to change the way the Starbuck operated.

He closed down around 600 underperforming stores .

Removing warm breakfast from menu and maintaining the

aroma of coffee.

Introduction of new equipment-the clover brewing system. Launch of nourishing blends and new health and wellness

beverages.


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(E) SWOT Analysis:


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