mgt 449 case analysis: starbucks corporation competing in a global market
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The number of Starbucks stores in 1987
17
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The number of Starbucks stores as of 2009 in 55 countries
17,133
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Beverages.. A New Era!
1990s opening a new store every workday into the 2000s
Initial public offering on the stock market in 1992 - grown to 165 outlets
Currently in more than 55 countries
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A shift in strategy?
Stores closed
in the US since 2008
900Stores opened
outside of the US in 2009
900
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Why?!
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Strengths
Superior quality
The atmosphere
The size of the company
The company’s culture
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Weaknesses
Market cannibalization
The bigger you are, the larger the overhead and the bureaucratic costs
The negative perception
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Opportunities
Locally themed menu items
Intensifying socially responsible actions
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Threats
Rising dairy costs
Local alternatives
Supply shortage and diminishing returns
Only 20%-50% of profit from global locations
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An identity crisis?
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The Corporate-Level Strategy
Mission: To inspire and nurture the human spirit – one person, one cup and one neighborhood at a time.
Environmental Mission: Starbucks is committed to a role of environmental leadership in all facets of our business.
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Environmental Goals
Goals: Starbucks set a long list of environmental goals, some of the goals are:
Purchase 100 percent responsibly grown and ethically traded coffee by 2015. Achieved.
Double the purchases of Fair-trade certified coffee by 2009. Achieved.
Doubling the farmer land by $20 million by 2015.
The stake-holders to contribute 1 million hours of community services.
50000 young people are innovative in their communities by 2015.
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Vertical Integration
exclusive rights to use a high quality Colombian bean crop
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Horizontal Integration
Never kill the competition
Tea company acquisition (Tazo)
UK coffee retailer (Seattle’s Coffee)
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Business-level strategy
What?
Who?
Where?
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Partnership first, country second.
Their international expansion approach
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Improving the efficiency
Economies of scale
Human Resource strategy
The marketing strategy
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Recommendations
Starbucks have to rethink their “blanket strategy”
Extensive social responsibility campaigns
Catering locally themed menu items
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Thank you!
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Q & A
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