EXECUTIVE SUMMARY
Introduction
In 1971, Starbucks began as a small coffee shop located in Seattle's Pike
PlaceMarket. It was founded by three coffee lovers, Gerald Baldwin, Gordon Bowker,
and Ze Siegl. Their main customers were a small group of people who were passionate
aboutcoffee, and they primarily sold coffee beans and cared about coffee.
The Company
Starbucks Corporation is an American multinational chain of coffeehouses and
roastery reserves headquartered in Seattle, Washington. It was founded in 1971, and
iscurrently the world's largest coffeehouse chain. Pike Place Market, Elliott Bay,
Seattle,Washington, U.S.
Product and Services
Starbucks offers a diverse range of products and services tailored to meet the
needs of coffee enthusiasts worldwide. From its renowned selection of coffee
beverages, including espresso-based drinks and specialty seasonal offerings, top
premium teas, delicious food items, and branded merchandise, Starbucks caters to a
variety of tastes and preferences. The company's commitment to customer convenience
is evident through its mobile ordering and payment options, providing a seamless
experience for on-the-go customers. Additionally, Starbucks' dedication to innovation is
showcased in its Reserve stores and Roasteries, offering a premium coffee experience
with small-batch roasting and exclusive merchandise.
The Market
Starbucks targets urban professionals, students, and commuters by strategically
positioning outlets in high foot traffic areas, campuses, and transportation hubs. This
approach enhances brand engagement, drives sales, and maintains Starbucks' status
as a preferred choice for coffee enthusiasts.
Financial Considerations
Starbucks, a global leader in the coffee and beverage market, boasts an
extensive network of over 33,250 stores across 78 countries. The company's financial
strategy encompasses both growth and shareholder value. Over recent years,
Starbucks has significantly increased its long-term debt, nearly doubling the amount
issued between 2019 and 2021. This strategy reflects the company's commitment to
financing expansion, innovation, and other strategic initiatives. Additionally, in 2021,
Starbucks announced plans to allocate more than $20 billion over three years for
dividends and share buybacks, demonstrating its dedication to returning value to
shareholders.
Mission
To inspire and nurture the human spirit - one person, one cup, and one
neighborhood at a time.
Key to success
Key to success for Starbucks will include:
1. Commitment to Quality Coffee Beans
2. Customer-Focused Approach
3. Strategic Expansion
4. Embracing Corporate Social Responsibility
5. Environmental Sustainability
INDUSTRY, TARGET CUSTOMER AND COMPETITOR ANALYSIS
Starbucks target customers are the following:
The company focuses on a broad spectrum of individuals. They prioritize coffee
enthusiasts and professionals seeking quality beverages and inviting spaces for work or
socializing. Additionally, Starbucks strategically situates its outlets near educational
institutions to attract students and educators in need of convenient study spots or
meeting venues. The brand also resonates with urban residents, serving as a go-to for
daily coffee fixes and social gatherings.
In assessing Starbucks within the coffeehouse industry, we acknowledge
itssignificant strengths. The company is renowned for its accommodating service and
commitment to providing high-quality products at affordable prices. This dedication has
solidified Starbucks' position as a leader in the industry, renowned for its premium
coffee offerings and inviting atmosphere. However, there are weaknesses to consider.
Despite its strengths, Starbucks faces fierce competition from both large chains and
independent coffee shops. Moreover, the potential for financial challenges, including
increased operational costs or economic downturns, poses a threat to the company's
stability and growth.
In terms of competitors, Starbucks faces intense competition from
established chains like Dunkin' Donuts and independent coffee shops that offer similar
products and services. Moreover, emerging trends in the industry, such as the rise of
specialty coffeeroasters or the growing popularity of alternative beverages like specialty
teas, pose additional threats to Starbucks' market share and profitability.
Despite these challenges, Starbucks can capitalize on numerous growth
opportunities. This includes expanding its global presence in emerging markets,
diversifying its product offerings to appeal to evolving consumer preferences, and
leveraging digital innovation to enhance the customer experience. By remaining agile
and proactive in addressing industry trends and customer needs, Starbucks can
continue to thrive and maintain its position as a leader in the coffeehouse industry.
COMPANY DESCRIPTION
Starbucks, the brainchild of visionary entrepreneur Howard Schultz, revolutionized the
coffee industry with its premium offerings and inviting ambiance. Positioned strategically
across the globe, Starbucks outlets offer a welcoming atmosphere and an extensive
menu of premium coffees, teas, and delectable pastries. Founded on the ethos of
providing not just a beverage, but a rich and immersive experience, Starbucks has
become a beloved destination for coffee aficionados and casual patrons alike. With a
commitment to quality, sustainability, and community engagement, Starbucks continues
to redefine the coffee culture landscape, inviting customers to savor each moment with
every sip.
PRODUCT/SERVICE PLAN
Starbucks is a leading coffee brand that offers an extensive range of premium
coffee experiences to customers worldwide. They provide an impressive selection of
beverages, including classic espresso-based drinks, cold brews, and customizable iced
coffees.
For tea enthusiasts, Starbucks offers high-quality loose-leaf teas sourced from
around the world. In addition to beverages, the brand also boasts an array of food
items, including freshly baked pastries, artisanal sandwiches, and salads. Starbucks
also offers an enticing range of merchandise, including coffee mugs, tumblers, and
reusable cups
The brand's commitment to excellence extends beyond products and
digitalservices, as they pride themselves on exceptional customer service and
environmental stewardship. With a wide network of conveniently located stores, drive-
thru and mobile pickup options, and seamless online ordering and delivery services,
Starbucks remains committed to providing accessibility and convenience for customers
on the go.
MARKETING PLAN
Starbucks has revolutionized the coffee industry with its premium quality coffee,
inviting ambiance, and commitment to social responsibility. As consumer preferences
evolve, Starbucks recognizes the need to adapt its marketing strategies to stay relevant
and competitive.
SWOT Analysis
Strength
The main strength of Starbucks is its strong financial performance which has
resulted in the company occupying the number one spot among coffee and beverage
retailers in the world
Weaknesses
The company is heavily dependent on its main and key input, which is the
coffee beans, and hence, is acutely dependent on the price of coffee beans as a
determinant of its profitability. This means that Starbucks is overly price sensitive to the
fluctuations in the price of coffee beans and hence, must diversify its product range to
reduce the risk associated with such dependence.
Opportunities
The company has an opportunity to expand its supplier network and expand the
range of suppliers from whom it sources to diversify its sources of inputs and not be at
the mercy of whimsical suppliers. Further, this would also help the company become
less sensitive to the prices of coffee beans and make it resilient against supply chain
risks.
Threats
The company faces threats from the rising prices of coffee beans and is subject
to supply chain risks related to fluctuations in the prices of this key input. Further, the
increase in the prices of dairy products impacts the company adversely leading to
another threat to its profitability. The company is beset with trademark and copyright
infringements from lesser-known rivals who wish to piggyback on its success. As with
other multinational retailers in emerging markets, Starbucks has fought litigation against
those misusing its brand and famous logo.
Product
Starbucks offers meticulously crafted coffee blends, teas, and specialty drinks,
complemented by pastries and snacks, catering to diverse tastes.
Price
Despite premium quality, prices are affordable, fostering loyalty among
customers.
Promotion
Strategic marketing initiatives, including social media campaigns and
Starbucks Rewards, engage customers effectively.
Place
Starbucks locations provide accessible, comfortable spaces designed to evoke
warmth and community, catering to diverse demographics.
People
Welcoming staff ensures every visitor feels valued and appreciated, fostering a
sense of belonging.
Process
Skilled baristas meticulously prepare each drink and food item, ensuring
consistency and excellence.
Physical Evidence
Iconic green and white cups, the aroma of freshly brewed coffee, and satisfying
sips leave a lasting impression on customers, enhancing the overall experience.
OPERATION AND DEVELPOMENT PLAN
Starbucks is committed to upholding exceptional quality standards while
continuously striving for growth and innovation. To achieve its global expansion
objectives, the company carefully identifies new markets and adapts to local trends.
Furthermore, Starbucks actively invests in digital transformation initiatives to improve
customer experiences and streamline operations. The company also places great
emphasis on sustainability and is dedicated to implementing eco-friendly practices and
ethical sourcing.
MANAGEMENT TEAM
The company was founded by Jerry Baldwin, Zev Siegel, and Gordon Bower and
later acquired by Howard Schultz in the early 1980s.
ORGANIZATIONAL CHART
