1 / 24

Starbucks

Starbucks. Crystal Hill Stephen Lechtenberg Anand McGee Allison Purtell Jason Torres. Industry Overview. Highest imported product in world, second to oil U.S. Coffee Industry 20,000 stores, $11 Billion profit Top 50 companies, 70% of profit

shani
Download Presentation

Starbucks

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript


  1. Starbucks Crystal Hill Stephen Lechtenberg Anand McGee Allison Purtell Jason Torres

  2. Industry Overview • Highest imported product in world, second to oil • U.S. Coffee Industry • 20,000 stores, $11 Billion profit • Top 50 companies, 70% of profit • Secure prime locations, drive store traffic, deliver high quality products

  3. Business and Economic Factors • Business Characteristics • Expansion, franchising and licensing, store traffic • Economic Characteristics • Coffee beans, futures contracts

  4. Forces for Driving Change • Environmental concerns • Sustainable coffee • Organic coffee, fair trade, and shade grown coffee • Customer’s desire for information • “Green” coffee

  5. Competitive Forces • Threat of New Entrants • Low startup costs, strong first mover advantage • Rivalry Among Existing Firms • Highly concentrated, highly competitive • Threat of Substitute Products • Low customer switching costs, differentiation • Bargaining Power of Customers • Millions of coffee consumers worldwide, little power • Bargaining Power of Suppliers • Firms hold power, suppliers compete against eachother

  6. Competitive Positions • Starbucks • First mover advantage (Blue Ocean) • Differentiation • McDonalds • McCafe division • Dunkin Donuts • Starbucks biggest competitor • Nestle

  7. Competitive Moves • Innovation • Contribute more capital to R&D • Expansion • Starbucks, 700 new stores in 2009 • McDonalds, 1,000 new stores in 2009 • Dunkin Donuts, 100 stores in Taiwan by 2017 • Product Differentiation

  8. Key Success Factors • Starbucks: • Continue disciplined expansion • Product differentiation • McDonald’s: • Most products for your dollar • Nestle: • Unmatched product and brand portfolio • Dunkin’ Donuts: • Innovation

  9. Attractiveness of Coffee Industry • Coffee beans are 2nd largest export • Large companies make up 70% of industry • Must secure prime locations, manage and increase store traffic, and sell high quality products • Companies must expand in order to succeed • Competition on price • Relationships with coffee producers is key • Overall attractive industry • Starbucks saw $1,000,000 profit per store in 2008 • Typical coffee shop saw $500,000 profit per store

  10. Marketing Efforts • Recognition in Hollywood • Loyal customers • Rewards programs • My Starbucks Rewards card • Facebook • Competition

  11. Financial outcomes • Consolidated Company revenue • $2.5 Billion in 2008 • $2.4 Billion in 2009 • Due to strengthening U.S. dollar • And fewer stores being opened in ’09 • High costs in closing 800 stores • Current stock price of $21.59 • Forecasted to increase in December

  12. Pricing • First price reduction in August 2009 • Due to 6% decrease in sales • On standard drinks by 5-15 cents • To attract non-loyal customers • Specialty drinks increased • Was last raised in 2007 by 5 cents • Loyal customers won’t leave • Trying to cut down costs by being more efficient in stores

  13. Strengths • Operational Techniques • Extending their market to other business channels • Joint ventures • Marketing and sales strategies • Focus on quality and experience vs. price

  14. Strengths • Customer service • “Develop enthusiastically satisfied customers all of the time.” • Wireless internet • Comment cards • Management techniques • Empowerment of employees • Every employee a “partner”

  15. Core Competencies • Vertically Integrated • Placement • “…to become the most recognized and respected brand in the world”

  16. Weaknesses • Lack of current new product development • Slow to diversify into new markets • Pricing strategies • Current marketing strategies not meeting marketing objectives • Younger, less educated customers with lower economic status

  17. Weaknesses • Market saturation has gotten in the way of products and services not meeting marketing characteristics • Low customer satisfaction • Speed of service • Inconsistency

  18. Opportunities • Co-branding • International expansion • India and Pacific • “Going green” practices

  19. Threats • Rising costs of coffee or dairy products • Copycat brands/Competition • McDonalds and Dunkin Donuts • Declining coffee market • New beverage or pastime could evolve

  20. Eliminate-Reduce-Raise-Create

  21. Competitive Strength • By keeping Focus on quality coffee and excellent customer service • Easier to acquire quality suppliers • Harder for competition to keep up

  22. Valuable Assets and Resources • Quality coffee • Diversified menu, reaching across 3 tiers of customers • Technology • Employees

  23. Starbucks’ Issues/Solutions Problem: Overexpansion Solutions: Transformation Agenda 1) Improving U.S. state 2) Re-igniting emotional attachment 3) Build for the long term 4) Expand around globe outside U.S.

More Related