starbucks
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An interesting analysis of Starbucks's SWOT, 4Ps, Strategy, Marketing, Finance etc. Hope you will enjoy this presentation. Go through the slides and don't forget to hit like and share buttons. All the best.TRANSCRIPT
Business AnalysisCompiled By;
Qamarudheen [email protected]
+919-6259-234-12
STARBUCKSCOFFEE
www.starbucks.com
IntrductionOverviewHistroryMission
Key People
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Overview
Starbucks is a world renowned specialty coffeemaker.
It roasts, markets and retails specialty coffee.
It offers blends of coffee, handcrafted beverages,merchandise, and food items, ready-made drinks,and Starbucks ice cream.
It markets all of its products under the flagshipStarbucks brand.
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It also market some products under brands suchas Tazo Tea, Seattle’s Best Coffee, Starbucks VIA,Torrefazione, Italia Coffee, and Evolution Fresh.
The company-owned and licensed storesoperates across Asia-Pacific, the Middle East,Africa, Europe and the Americas.
Total stores: 19767 (as of September 29, 2013) Company-operated - 10194. Licensed stores - 9573.
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The first Starbucks store opened in Seattle’sPike Place Market in 1971.
The company grew to be the largest roaster inWashington with multiple locations until theearly 1980’s.
In 1981,Howard Schultz, recognized a greatopportunity and began working with the founderJerry Baldwin.
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Schultz wanted to bring the Italian café cultureto the United States. Selling espresso by the cupwas the first test.
Schultz left Baldwin to open his own and raisedmoney from investors to purchase the Italian Coffee House Giornale.
The company experienced rapid growth goingpublic in 1992, and growing tenfold by 1997,with locations around the United States, Japanand Singapore.
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Starbucks coffee on United Airlines flights. Selling premium teas via Tazo Tea Company. Offering order Starbucks coffee online.
Introduced new products and operations.
Today, Starbucks has millions of customersevery day, in about 19,000 locations in over62 countries which have employed approximately 1,82,000 partners worldwide.
Starbucks also began expanding its brand by;
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“To inspire and nurture the human spirit oneperson, one cup, and one neighborhood at a time.”
It ethically sources the finest coffee beans.
It embraces diversity.
It provides a human connection with employees.
It creates stores where customers feel comfortable.
It takes responsibility in each community.
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Mission
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Key People
Howard SchultzChairmanPresident Chief Executive Officer
Troy AlsteadChief Financial Officer and Group President, Global Business Services
Adam BrotmanExecutive Vice President, Chief Digital Officer
Curtis GarnerExecutive Vice President, Chief Information Officer
Sharon RothsteinExecutive Vice President, Global Chief Marketing Officer
Arthur RubinfeldChief Creative Officer, President, Global Innovation And
Matthew RyanExecutive Vice President, Global Chief Strategy Officer
PRODUCTSDrinksFood
Merchandise
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SEspresso
®FrappussinoNon-Coffee
Cappuccino
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Drinks
Pastry/ Cakes
CookiesMuffins
Sandwitch
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Food
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Merchandise
Blends
Coffe MakersMugs
Tumblers
SWOT AnalysisStrengths
WeaknessesOpportunities
Threats
Innovation
Global presence
Strong financials
Brand identity
Store ambience
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StrengthsS
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High employee turnover
Over dependence on US market
Small product mix
Higher prices
Too many products
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WeaknessesS
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International markets
Customization
Inorganic growth
New product mix
Localization
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Opportunities
Intense competition
Govt. Regulations
Uncertain suppliers
Target of terrorism
Saturated US market
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Threats
StrategySuccess FormulaInternalization
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Motivated employees & superior customerservice is the key success factor of Starbucks.
Starbucks focuses on recruiting anddeveloping rightpeople.
Starbucks partner serving coffee with a smile :)
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Success Formula
Attractivecompensationpolicies.
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Market Entry
Local joint-venture is the preferredentry strategy of Starbucks.
Financial AnalysisShare PriceSales Mix
Income StatementEarnings
Balance Sheet
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$46.50
$56.55$62.00
$54.28 $54.90$58.97
$67.48
$77.84
$35.12
$45.28
$51.03
$43.04 $44.27
$52.39$56.65
$65.82
12Q1 12Q2 12Q3 12Q4 13Q1 13Q2 13Q3 13Q4
High Low
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Share Price
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74% 75% 75%
20% 19% 19%
3% 4% 4%3% 2% 2%
2013 2012 2011
Beverages Food Packaged and single serve coffees Coffee-making equipment and other merchandise
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Sale Mix
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14892.2
13299.5
11700.4
15469
11512.8
10175.8
-325.4
1197.41728.5
8.3
1384.7 1248
2013 2012 2011
Net Revenue Operating Expense
Operating Income Earnings After Interest & Tax
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Income Statement
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S$0.01
$1.83$1.66
$0.89$0.72
$0.56
2013 2012 2011
EPS Cash Dividends
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Earnings
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$5,471.40
$4,199.60
$6,045.30
$4,019.60
$5,377.30
$2,209.80
$1,657.10
$894.90
$4,482.30
$5,114.50
2013 2012
Current Assets Fixed Assets Current Liabilities
Long Term Liabilities Equity
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Balance Sheet
MARKETINGSegmentTargeting
PositioningProduct
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Promotion
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Every age group.
Tech savvy individuals.
Men and women.
High disposable income.
Brand focused.
Savvy and avid coffee lovers who enjoythe “Starbucks Experience”.
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Segment
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Starbucks targets commuters and captiveconsumers.
Commuters consist of people heading to or fromwork or people on their lunch break.
Captive consumers consist of those who arestuck in a campus environment. Eg: high school & college students, corporatecampuses.
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Target Customer
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Starbucks has positioned itself as an upscalebrand which provide rich experience.
It is obvious from the mission statement thatthey are trying to make it the best for socializing.
Starbucks is trying to reposition itself as a “third place” for its customers.
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Positioning
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Coffee: More than 30 blends and premium coffees.
Handcrafted Beverages: Fresh-brewed coffee, ®hot and iced espresso beverages, Frappuccino
coffee and non-coffee blended beverages, ®smoothies and Tazo teas.
Fresh Food: Baked pastries, sandwiches, salads, oatmeal, yogurt parfaits and fruit cups.
Merchandise: Coffee- and tea-brewing equipment,mugs and accessories, packaged goods, music,books and gifts.
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Product
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Startbucks offers all of its products at a premiumprice.
Prices range from $1.00-$4.20 for drinks which ishigher than any other retailers.
In case of foods, Starbucks is more expensivewhen compared to quick-service restaurants,
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Price
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Distributed directly to customers through ownretail stores and retail partners.
Located in high-traffic, high-visibility locations,focusing on pedestrian consumers.
Company also focus on drive-thru retail stores forthe convenience of non-pedestrian consumers.
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Place
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AdvertisingStarbucks spends under 3% of revenue on ads.But spends more on ensuring customersatisfaction to increase word of mouth.
PersonalSelling
PublicRelations
SalesPromotions
Passionate employees, customer satisfaction.
Events, public performances, green initiatives philanthropic endeavors.
Store decoration, viral videos, sample vans,billboards, newspaper, magazines andsocial media.
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Promotion
FACTSFive Facts
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Five Facts
Starbucks has added an average 15 stores on a dailybasis since 1987.
The average Starbucks customer visits the store 6 timesper month while loyal 20% of customers visit 16 times.
There are over 87000 drink combinations at Starbucks.
The Starbucks cinnamon chip scone has more caloriesthan a McDonald’s quarter pounder with 480 calories.
Starbucks uses 93 million gallons of milk and 2.3 billion paper cups per year.
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RecognitionsAwards
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“No. 1 Best Coffee,” Fast Food and QuickRefreshment categories Zagat’s Survey ofNational Chain Restaurants – 2009-2010 “No. 1 Most Popular Quick Refreshment Chain” Zagat’s Survey of National Chain Restaurants– 2009-2010 One of the “World’s Most Ethical Companies” Ethisphere – 2007-2010
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Awards
One of “The 100 Best Companies to Work For” FORTUNE – 1998–2000, 2002–2010 One of the “Most Admired Companies in America” FORTUNE – 2003–2010
One of the “Global 100 Most Sustainable Corporations in the World” Corporate Knights– 2010