starbucks final pre
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StarbucksTRANSCRIPT
S T A R B U C K S
Ashley Anderson Arnold CarinoJoanna Louie
Quynh NguyenPia Rodil
Michelle TapiaNathan Trujillo
Agenda• Company Background
o Company Historyo Key Factso Company Leadershipo Products and Serviceso Mission Statemento Mission Statement Evaluationo Proposed Mission Statement
• Internal Factors Evaluation
• External Factors Evaluation
Company History
● 1971-Starbucks founded as single store in Seattle’s Pike Place Market.14
● 1982- Howard Schultz joins Starbucks as director of retail operations and marketing. 14
● 1987- II Giornale acquires Starbucks assets and changes name to Starbucks Corporation. Opens in Chicago and Vancouver. 14
● 1992-Starbucks decertified the union and made IPO. 14
Quynh Nguyen
Company History
● 1993-Opens first roasting plant in Washington. 14
● 1996-Opens first stores outside of North America in Japan and Singapore. 14
● 1998- Acquires Tazo, a tea company based in Oregon.Lauches Starbucks.com. 14
● 2011- Changes its logo in honor of its 40th anniversary.
14
Quynh Nguyen
Key Facts● Headquarter in Seattle, Washington. 3
● The average Starbucks customer visits the store six times per month. The most loyal 20% of customers visit 16 times per month. 3
● Offers more than 87,000 possible drink combinations. 3
● In 2013: >19,767 stores worldwide and 14.9 billion U.S. dollars in total revenues, up 12% from the previous year. Global store sales increased 7%. 19
Quynh Nguyen
Company Leadership
• Howard Schultz
• Chairman and CEO4
• Joined Starbucks in 1982 21
• Not passionate about coffee5
Pia Rodil
Products
Michelle Tapia
16
Services
Michelle Tapia
• “Servicescape” 8
• Wi-fi 16
• Subscriptions 16
• e-Gifts 16
• My Starbucks reward 16 (Starbucks, 2014)
Mission Statement
Our mission: to inspire and nurture the human spirit -- one person, one cup and one neighborhood at a time. 15
Joanna Louie
“”
Mission Statement Evaluation Matrix
Joanna Louie
Concern for employees NO
Concern for Public Image NO
Concern for Survival and Growth NO
Customers NO
Markets NO
Philosophy YES
Products and Services NO
Self-concept NO
Technology NO
Proposed Mission Statement
Joanna Louie
Joanna Louie
15
Joanna Louie
15
15
15
Joanna Louie
15
15
15
Joanna Louie
Proposed Mission Statement
Joanna Louie
Our mission: to inspire and nurture the human spirit – one person, one cup and one neighborhood at a time. We’re passionate about ethically sourcing the finest coffee beans, roasting them with great care, and improving the lives of people who grow them. We’re called partners, because it’s not just a job, it’s our passion. Together, we embrace diversity to create a place where each of us can be ourselves. When we are fully engaged, we connect with, laugh with, and uplift the lives of our customers – even if just for a few moments. When our customers feel this sense of belonging, our stores become a haven, a break from the worries outside, a place where you can meet with friends. Every store is part of a community, and we take our responsibility to be good neighbors seriously. We understand what it’s like to be busy, so we make sure to position our stores where you work, shop, travel, and dine. As technology continues to improve, so do our stores and services. We strive to keep our stores as savvy and up-to-date as possible to provide our customers with an attractive environment to meet, greet, or get work done. We know that as we deliver in each of these areas, we enjoy the kind of success that rewards our shareholders.
Proposed Mission Statement
Joanna Louie
Current Strategies
●Global Matrix 22
● Transnational 12
● Differentiation 20
Michelle Tapia
External Factors Evaluation (EFE)Key External Factors Weight Rating Score
Opportunities
Number of coffee consumers grew 5% in the last year 11 0.20 5 1
U.S. economy and job growth on the rise 9 0.12 3 0.36
Advances in technology leads to lower cost of operations 0.15 3 0.45
Threats
Chinese regulations (high import duties and tax rates) 9 0.25 1 0.25
Growing trend to be healthy 6 0.13 5 0.65
Climate change in farms where Starbucks get their coffee 17 0.15 5 .75
Total 1.00 3.46
Competitive Profile MatrixStarbucksStarbucks McDonaldsMcDonalds Dunkin’ DonutsDunkin’ Donuts
Critical Success Factors
Weight Rate Score Rate Score Rate Score
Market Share .3 5 1.5 3 .9 2 .6
Price Competitiveness
.1 3 .3 3 .3 4 .4
Customer Service .15 3 .45 4 .6 3 .45
Global Expansion .15 5 .75 5 .75 3 .45
Quality of Product .2 4 .8 2 .4 3 .6
Employee Benefits .1 4 .04 2 .2 3 .3
Total 1.00 3.84 3.15 2.8
Arnold Carino & Joanna Louie
Michelle Tapia
Key Internal Factors Weight Rating Score
Strengths
Strong Brand Name 4 .29 5 1.45
Sound Financial Records 10 .17 4 .68
Market Dominance 10 .20 4 .80
Weaknesses
Self-Cannibalization (Overexposure) 20 .08 1 .08
High Product Price 18 .10 3 .30
Increase In the Price Of Coffee Beans 20 .16 4 .64
Total 1.00 3.95
Internal Factors Evaluation (IFE)
Financial Analysis
Nathan Trujillo
Starbucks McDonalds Dunkin’ Donuts
Market Cap 53.90B 94.06B 5.47B
EPS .15 5.55 1.36
Net Income 116.80M 5.59B 146.90M
Gross Margin .57 .39 .78
P/Sales 3.53 3.35 7.78
PEG 1.40 1.98 1.82
P/E 462.99 17.12 37.79
ROE 2.33% 35.69% 38.39%
ROA 15.83% 14.78% 5.45%
S T A R B U C K SFinal Presentation
Ashley Anderson Arnold CarinoJoanna Louie
Quynh NguyenPia Rodil
Michelle TapiaNathan Trujillo
Agenda
• IE Matrix • SWOT Matrix • Quantitative Strategic Planning Matrix • Final Recommended Strategy • Organizational Structure • Organizational Culture• Strategic Control and Reward Systems• Balanced Scorecard• Target Market• Product Positioning Map
External Factors Evaluation (EFE)Key External Factors Weight Rating Score
Opportunities
Number of coffee consumers grew 5% in the last year 11 0.20 5 1
U.S. economy and job growth on the rise 9 0.12 3 0.36
Advances in technology leads to lower cost of operations 0.15 3 0.45
Threats
Chinese regulations (high import duties and tax rates) 9 0.25 1 0.25
Growing trend to be healthy 6 0.13 5 0.65
Climate change in farms where Starbucks get their coffee 17 0.15 5 .75
Total 1.00 3.46
Key Internal Factors Weight Rating Score
Strengths
Strong Brand Name 4 .29 5 1.45
Sound Financial Records 10 .17 4 .68
Market Dominance 10 .20 4 .80
Weaknesses
Self-Cannibalization (Overexposure) 20 .08 1 .08
High Product Price 18 .10 3 .30
Increase In the Price Of Coffee Beans 20 .16 4 .64
Total 1.00 3.95
Internal Factors Evaluation (IFE)
IE Matrix
Joanna Louie
Strengths - S
1. Brand Identity 10
2. Customer Base Loyalty10
3. Variety 3
4. Market Dominance 10
Weaknesses - W
1. Self-Cannibalization 20 2. High Product Price 18
3. Perceived As A Substitute 20
4.Coffee Culture Clash
Opportunities - O
1. Customization 3
2. International Markets 4
3. Product Diversification 3
4. Technological advances lead to higher profits.
SO
S1,O2
Embrace China through brand identity.
S4, O3
Diverse products can lead Starbucks to succeed in other sectors such as the fast-food
industry
WO
W4,O1
Customize to the Chinese Culture
W3,O4
Use trending Apps to maintain customers by offering promotions and coupons
Threats - T
1. Rising prices of coffee beans and dairy products 17
2. Growing Trend To Be Healthy 6
3. Intense Competition 20
4. Saturated Markets in Developed Economies
ST
S2, T1
Uphold the Starbucks Experience to increase and maintain customer base loyalty despite
price increase.
S3, T2
Embrace the products that are healthier such as the “skinny” alternative .
WT
W2, T3
Emphasis on quality.
W1,T4
First-Mover in China. Adjust to the “tea” atmosphere.
SWOT Matrix
Michelle Tapia
Arnold Carino
Quantitative Strategic Planning Matrix
Nathan Trujillo
Final Recommended Strategies
• Embrace China through brand equity
• Implementing an effective hedging strategy, like future contracts, to lock in low prices for high quality coffee beans
• More investments in advertising and marketing initiatives in the face of increased competition in the market.
• Integrating Starbucks loyalty program with the mobile application would also be recommended
Matrix Organizational Structure
Quynh
Quynh
Proposed Matrix Organizational Structure
Michelle Tapia
• Diversity &Inclusion 23
• People Orientated Culture 26
• Eiffel Tower Culture
• Employees are Partners 24
•Starbucks Experience:Cafe Culture 1
What’s It Like To Work For Starbucks?
Michelle Tapia
•Guided Missile Culture • Open Mind• Respect & Dignity
• Respect cultural differences
• Strategic Control & Rewards System • Input Controls: Standard Operating Procedures• Output Controls: ROWEs
Starbucks Culture &
Controls Improvement Proposal
Ashely Anderson
Strategic Control and Reward Systems• Internal Governance Mechanisms
◦ Guided Missile Culture
• Input Controls 31
◦ Customer- focused (Behavior Guidelines) 31
■ Employees are trained to act in specific ways
■ Treat employees well and they will treat the customers well
■ Happy employees lead to return customers
• Output Controls 31
◦ Partner benefits (ROWEs; Intrinsic)
◦ Your Special Blend Package
Balanced Scorecard
Ashely Anderson
Pia Rodil
• Young urban adults
◦ Core customers 26
◦ Ages 18-24 years old 26
◦ Average income: $55,000 27
◦ “Third space” 27
Current Target Market
Pia Rodil
Proposed Target Market• Global strategy: China
◦ urban Chinese upper middle class
◦ concentrated in the big cities 26
◦ 106,000 to 229,000 yuan ($17,000- $34,000) 27
◦ Ages 20 to 50 years old 26
◦ Aspirational appeal 28
Current Product Positioning
Pia Rodil
Proposed Product Positioning
Pia Rodil
References1. Alderman, L.. (2012, March 30). In Europe, Starbucks Adjusts to a Cafe Culture. From:The New York Times . Retrieved March 8, 2014, From:http://
www.nytimes.com/2012/03/31/business/starbucks-tailors-its-experience-to-fit-to-european-tastes.html?pagewanted=all&_r=1&
2.Author unknown. (June 22, 2011.) Starbucks Ethical Coffee Sourcing and Farmer Support. Retrieved from: http://www.conservation.org/global/celb/Documents/
2011.06.22_Starbucks_Ethical_Sourcing_Factsheet_web.pdf
3.Cooper,T. (2013, November 24). 6 Facts About Starbucks That Will Blow Your Mind. Retrieved March 2, 2014, from The Motley Fool: http://www.fool.com/
investing/general/2013/11/24/6-facts-about-starbucks-that-will-blow-your-mind.aspx
4.Forbes. (2014, February 28). Howard Schultz. Retrieved from Forbes: http://www.forbes.com/profile/howard-schultz/ & http://www.forbes.com/companies/
starbucks/5.Gallo, C. (2013, December 19). What Starbucks CEO Howard Schultz taught me about communication and success. Retrieved February 28, 2014, from Forbes:
http://www.forbes.com/sites/carminegallo/2013/12/19/what-starbucks-ceo-howard-schultz-taught-me-about-communication-and-success/
6.Gib, A. (n.d.). Starbucks Environmental Scan for Social Factors. Retrieved March 3, 2014, from Article Snatch: http://www.articlesnatch.com/Article/Starbucks-
Environmental-Scan-For-Social-Factors/1207634#.UxtcMvl93GT
7.Global Times. (2014, February 10). Strabucks confirms use of chemical food additive in Chinese mainland, Subway and McDonald's say otherwise. Retrieved
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2013/10/21/starbucks-china-pricing-idUSL3N0IB18120131021
10.McGrath, M. (2013, October 10). New Store Openings Push Starbucks Revenue Up 13%. Retrieved March 8, 2014, from Forbes:http://www.forbes.com/sites/
maggiemcgrath/2013/10/30/new-store-openings-push-starbucks-revenue-up-13/
11.Perez, M.G. (2013, May 22). Coffee Consumption Increases in U.S., Association Survey Shows. Retrieved March 8, 2014, from Bloomberg News. Global
Times:http://www.bloomberg.com/news/2013-03-22/coffee-consumption-increases-in-u-s-association-survey-shows.html
References (cont.)12. Rein, S. Why Starbucks Succeeds in China and Other’s haven’t. USA TODAY. Retrieved from http://usatoday30.usatoday.com/money/industries/food/story/
2012-02-12/cnbc-starbucks-secrets-of-china-success/53040820/1
13.Schultz, H. (2011). Business Ethics and Compliance: Standards of Business Conduct.Retrieved from: http://www.starbucks.com/assets/
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Starbucks_EN.pdf
References (cont.)
23.Starbucks. (n.d.). Diversity and Inclusion Retrieved April 10, 2014, from Starbucks:http://www.starbucks.com/responsibility/community/diversity-and-inclusion24. Starbucks. (n.d.). Working at Starbucks. Retrieved April 10, 2014, from Starbucks: http://www.starbucks.com/careers/working-at-starbucks25. Carpenter,M. (2013) Principles of Management: Chapter 8 Organizational Culture. Flat World Knowledge, Inc.. Retrieved April 10, 2014, from: www.saylor.org/site/wp.../03/BUS209_CH_81.pdf26. Barton, D., Chen, Y., & Jin, A. (2013, June). Mapping China's middle class. Retrieved April 22, 2014, from McKinsey & Company:http:/ /www.mckinsey.com/insights/consumer_and_retail/mapping_chinas_middle_class27. Luhby, T. (2012, April 26). China's growing middle class. Retrieved April, 2014, from CNN Money: http://money.cnn.com/2012/04/25/news/economy/china-middle-class/28. Magni, M., & Poh, F. (2013, June). Winning the battle for China's new middle class. Retrieved April 22, 2014, from Mckinsey & Company:http://www.mckinsey.com/insights/consumer_and_retail/winning_the_battle_for_chinas_new_middle_class29. O'Farrell, R. (n.d.). Who is Starbucks' target audience? Retrieved April 22, 2014, from Small Business by Demand Media: http://smallbusiness.chron.com/starbucks-target-audience-10553.html30. Page, J. (2010). Starbucks marketing plan. Retrieved April 22, 2014, from Scribd.: http://www.scribd.com/doc/48355878/8/Consumer-Profile-and-Target-Market31. Working at Starbucks. Starbucks. Retrieved from http://www.starbucks.com/careers/working-at-starbucks32. Environment. Starbucks. Retrieved from http://www.starbucks.com/responsibility/environment33. The 10 worst restaurant chains for customer satisfaction. Forbes. Retrieved from http://www.forbes.com/pictures/femi45igjh/5-starbucks/34 Marks, Gene. (2014). What is Starbucks brewing for mobile payments? Forbes. Retrieved from http://www.forbes.com/sites/quickerbettertech/2014/02/03/what-is-starbucks-brewing-for-mobile-payments/#./?&_suid=139866001031809442500535945036\