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Starbucks
Starbucks is a global coffee company that operates over 19,000 stores worldwide. It started as a small coffee bean roaster in Seattle in 1971. Under new leadership in the 1980s, Starbucks expanded and pioneered the coffee shop concept. Today it sells coffee, tea, food items and coffee brewing equipment across 62 countries. Starbucks positions itself as an upscale brand that provides customers with a unique experience in its stores. It focuses on high quality coffee and customer service to drive its continued global success.
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Starbucks
- 1. Business Analysis Compiled By; QamarudheenThayyil khamarudheent@gmail.com +919-6259-234-12 STARBUCKS COFFEE www.starbucks.com
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- 3. I n t r d u c t i o n Overview Starbucks is aworld renowned specialty coffee maker. 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 flagship Starbucks brand. 3
- 4. I n t r d u c t i o n It also marketsome products under brands such as Tazo Tea, Seattle’s Best Coffee, Starbucks VIA, Torrefazione, Italia Coffee, and Evolution Fresh. The company-owned and licensed stores operates 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. Overview 4
- 5. I n t r d u c t i o n The first Starbucksstore opened in Seattle’s Pike Place Market in 1971. The company grew to be the largest roaster in Washington with multiple locations until the early 1980’s. In 1981,Howard Schultz, recognized a great opportunity and began working with the founder Jerry Baldwin. History 5
- 6. I n t r d u c t i o n Schultz wanted tobring the Italian café culture to the United States. Selling espresso by the cup was the first test. Schultz left Baldwin to open his own and raised money from investors to purchase the Italian Coffee House Giornale. The company experienced rapid growth going public in 1992, and growing tenfold by 1997, with locations around the United States, Japan and Singapore. History 6
- 7. I n t r d u c t i o n Starbucks coffee onUnited Airlines flights. Selling premium teas via Tazo Tea Company. Offering order Starbucks coffee online. Introduced new products and operations. Today, Starbucks has millions of customers every day, in about 19,000 locations in over 62 countries which have employed approximately 1,82,000 partners worldwide. Starbucks also began expanding its brand by; History 7
- 8. “To inspire andnurture the human spirit one person, 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. I n t r d u c t i o n 8 Mission
- 9. I n t r d u c t i o n 9 Key People Howard Schultz Chairman President ChiefExecutive Officer Troy Alstead Chief Financial Officer and Group President, Global Business Services Adam Brotman Executive Vice President, Chief Digital Officer Curtis Garner Executive Vice President, Chief Information Officer Sharon Rothstein Executive Vice President, Global Chief Marketing Officer Arthur Rubinfeld Chief Creative Officer, President, Global Innovation And Matthew Ryan Executive Vice President, Global Chief Strategy Officer
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- 15. Innovation Global presence Strong financials Brandidentity Store ambience 15 Strengths S W O T A n a l y s i s
- 16. High employee turnover Overdependence on US market Small product mix Higher prices Too many products 16 Weaknesses S W O T A n a l y s i s
- 17. S W O T A n a l y s i s International markets Customization Inorganic growth Newproduct mix Localization 17 Opportunities
- 18. Intense competition Govt. Regulations Uncertainsuppliers Target of terrorism Saturated US market S W O T A n a l y s i s 18 Threats
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- 20. S T R A T E G Y Motivated employees &superior customer service is the key success factor of Starbucks. Starbucks focuses on recruiting and developing right people. Starbucks partner serving coffee with a smile :) 20 Success Formula Attractive compensation policies.
- 21. S T R A T E G Y 21 Market Entry Local joint-ventureis the preferred entry strategy of Starbucks.
- 22. Financial Analysis Share Price SalesMix Income Statement Earnings Balance Sheet
- 23. F I N A N C I A L S $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 12Q112Q2 12Q3 12Q4 13Q1 13Q2 13Q3 13Q4 High Low 23 Share Price
- 24. F I N A N C I A L S 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 24 Sale Mix
- 25. F I N A N C I A L S 14892.2 13299.5 11700.4 15469 11512.8 10175.8 -325.4 1197.4 1728.5 8.3 1384.7 1248 2013 20122011 Net Revenue Operating Expense Operating Income Earnings After Interest & Tax 25 Income Statement
- 26. F I N A N C I A L S$0.01 $1.83 $1.66 $0.89 $0.72 $0.56 2013 2012 2011 EPSCash Dividends 26 Earnings
- 27. F I N A N C I A L S $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 AssetsFixed Assets Current Liabilities Long Term Liabilities Equity 27 Balance Sheet
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- 29. M A R K E T I N G Every age group. Techsavvy individuals. Men and women. High disposable income. Brand focused. Savvy and avid coffee lovers who enjoy the “Starbucks Experience”. 29 Segment
- 30. M A R K E T I N G Starbucks targets commutersand captive consumers. Commuters consist of people heading to or from work or people on their lunch break. Captive consumers consist of those who are stuck in a campus environment. Eg: high school & college students, corporate campuses. 30 Target Customer
- 31. M A R K E T I N G Starbucks has positioneditself as an upscale brand which provide rich experience. It is obvious from the mission statement that they are trying to make it the best for socializing. Starbucks is trying to reposition itself as a “third place” for its customers. 31 Positioning
- 32. M A R K E T I N G Coffee: More than30 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. 32 Product
- 33. M A R K E T I N G Startbucks offers allof its products at a premium price. Prices range from $1.00-$4.20 for drinks which is higher than any other retailers. In case of foods, Starbucks is more expensive when compared to quick-service restaurants, 33 Price
- 34. M A R K E T I N G Distributed directly tocustomers through own retail stores and retail partners. Located in high-traffic, high-visibility locations, focusing on pedestrian consumers. Company also focus on drive-thru retail stores for the convenience of non-pedestrian consumers. 34 Place
- 35. M A R K E T I N G Advertising Starbucks spends under3% of revenue on ads. But spends more on ensuring customer satisfaction to increase word of mouth. Personal Selling Public Relations Sales Promotions Passionate employees, customer satisfaction. Events, public performances, green initiatives philanthropic endeavors. Store decoration, viral videos, sample vans, billboards, newspaper, magazines and social media. 35 Promotion
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- 37. F A C T S 37 Five Facts Starbucks hasadded an average 15 stores on a daily basis since 1987. The average Starbucks customer visits the store 6 times per month while loyal 20% of customers visit 16 times. There are over 87000 drink combinations at Starbucks. The Starbucks cinnamon chip scone has more calories than a McDonald’s quarter pounder with 480 calories. Starbucks uses 93 million gallons of milk and 2.3 billion paper cups per year. 1 2 3 4 5
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- 39. R e c o g n i t i o n s “No. 1 BestCoffee,” Fast Food and Quick Refreshment categories Zagat’s Survey of National 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 39 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
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