Premium Essay

Starbucks Paper Analysis

In: Business and Management

Submitted By babynates
Words 4220
Pages 17
Overview In 1971, a single storefront coffee house, rich with both character and coffee aroma, opened its doors. Named after the chief mate from the novel, Moby Dick, and nestled in Seattle’s Pike Place Market, Starbucks welcomed customers in for some of the world’s most delicious fresh-roasted coffees. Current chairman, president, and CEO, Howard Schultz, enjoyed his first coffee at Starbucks so much that he joined the company in 1982. He soon envisioned incorporating the Italian Coffeehouse ambiance into the Starbucks experience. After leaving Starbucks for a brief time, Schultz returned and purchased the company in 1987. Bringing his vision to life, Schultz created a cozy atmosphere of social gathering and conversation. Schultz later retired in 2000, but after watching the company suffer financially, he returned in 2008 and restored the company to the industry leader it is today. Starbucks now serves its specialty coffees and food products at 23,187 stores in 64 countries.
This analysis offers insight into the fundamentals of the company by providing the necessary information to understand Starbucks’ current financial and strategic position in relation to its competitors as well as key issues requiring attention.

Key Problems and Issues

 Dissatisfaction among employees regarding current wages, work hours, and dress code
 Competition offering lower priced substitute products
 Competition offering free Wi-Fi in an attempt to create better social atmosphere
 Global competition i.e., Japan’s Mt. Rainier with Starbucks-like logo
 Ability to continue evolving strategy to stay ahead of the competition (now introducing alcoholic beverages to evening menu)
 Consumers disenfranchised by loyalty program
 Stores not strategically located, creating self-cannibalization
 Lack of growth in Europe, Africa, and Middle East (72…...

Similar Documents

Premium Essay

Starbucks Analysis

...Starbucks Coffee Company Background The first Starbucks opened in 1971 in Seattle's Historic Pike Place Market and it was belong to English teacher Jerry Baldwin, history teacher Zew Siegl, and writer Gordon Bowker. At first, they sell high-quality coffee beans and equipment. In 1982, the founders were joined by an entrepreneur named Howard Shultz who functioned as the firm's Director of Retail Operations and Marketing (Facts about Starbucks Coffee Company). While Howard Shultz on a trip to Italy, he found Italian "coffee culture". He believed the "coffee culture" could be reproduction in United States. In 1987, Shultz bring Italian “coffee culture” to United States. Starbucks was sweeping the whole of world. Until today, Starbucks have 17003 retail stores in 55 countries (Starbucks story as of October 2, 2011). Starbucks always give us promise- to inspire and nurture the human spirit-one person, one cup and one neighborhood at a time (Facts about Starbucks Coffee Company). Starbucks coffee shops sales coffee; handcrafted beverages; merchandise; fresh food; consumer products; and brand portfolio ((Facts about Starbucks Coffee Company). Outline In the following instructing,it will talk about Starbucks quantity. Firstly, use the product life cycle to identify the product have the curve of the lifetime. Use product development, introduction, growth, maturity, and decline this five stage to make sure what stage the product in. Make sure have new product could replace it. Secondly...

Words: 2278 - Pages: 10

Premium Essay

Starbucks Case Analysis

...PLANET STARBUCKS TABLE OF CONTENTS 1 CONTENTS Background Problem Identification Main Issue Narrow SWOT analysis Functional Area Analysis Alternatives Recommendation Implementation PAGE 2 7 7 8 16 47 53 57 1 PLANET STARBUCKS (A) ‘Group B’ BACKGROUND About Starbucks: Starbucks is one of the finest coffee stores, popular among its customers for its aura with a very comfortable atmosphere to relax and the first rate music it plays. As in the 1990s, it is a store which has been almost everywhere throughout the United States and Canada. Starbucks was founded in Seattle by Gerald Baldwin, Gordon Bowker, and ZievSiegl in 1971. It started its operations as a gourmet coffee bean roaster and distributor. Howard Schultz joined the company as a member of their marketing team in 1982 and urged the partners to consider opening an Espresso bar alongside selling coffee. The company opened its first Espresso bar at its Seattle store. However, the partners didn‘t want to take the idea of expanding its Espresso bar line forward, as to them it resembled stepping into the fast-food business instead of focusing on their own business of roasting and distributing. In 1985, Howard Schultz opened Il Giornale after he left Starbucks. Il Giornale was an espresso bar that sold coffee and assorted coffee beverages made exclusively with Starbucks‘ beans. Two years later, Schultz bought the former Seattle Starbucks company, six stores and roasting plant, for $3.8 million. Schultz now......

Words: 21170 - Pages: 85

Premium Essay

Starbucks Paper

...Starbucks Coffee: Penetration of the Ecuadorian Market “We changed the way people live their lives, what they do when they get up in the morning, how they reward themselves, and where they meet.” (ORÍN SMITH, Starbucks CEO) Introduction and brief history Starbucks success has changed gourmet coffee from a yuppie symbol status into a mainstream consumer good, and has created an American coffee shop market. Starbucks started on March 1971 on Seattle, Washington where it opened its first store. If was founded by three partners Jerry Baldwin, Zev Siegl and Gordon Bowker who were all inspired by coffee entrepreneur Alfred Peet whom they knew personally. The store started by initially just selling coffee beans and coffee making equipment instead of the drinks that have made the so popular. During their first year of operation they bought their beans from Peet’s but then they began buying directly from growers. After about a decade Howard Schultz was hired as director of retail operations and came to the conclusion that they should be selling drinks rather than just beans and equipment. He couldn’t convince the founders so he started his own chain called Il Giornale. By 1986 Starbucks had 6 stores in Seattle and had just started selling espresso. In 1987 the original owners sold Starbucks to Schultz who the renamed his Il Giornale stores to Starbucks which then started to expand quickly. By 1992 Starbucks had 140 locations in the US, revenue close to 44 million, and a......

Words: 933 - Pages: 4

Free Essay

Customer Analysis of Starbucks

...Customer Analysis Income Medium income: Considering the high quality of Starbucks coffee, they can’t just sell it for the cheapest price. The price of a cup of coffee from Starbucks is affordable for people with medium income. People with high income is partly included as focused customers of Starbucks, but those with high incomes are likely to find other places with the money they have. Thus, people with medium income, those who think the coffee is affordable, are the main customers. Occupation: Students: Especially university students come to Starbucks during their breaks, after school or for projects. As Starbucks serves customers with free wifi connection and a gathering place, it is a perfect place for university students. They can spend their spare time hanging out with their friends. Also, it can be a place for students to conduct group projects. White collar: They are the people who have enough money to buy the coffee. People working as white collars are the ones who can afford for a cup of coffee in Starbucks. These customers come before work in the morning, during lunch breaks or have short meetings in Starbucks. These people enjoy other things more than just coffee. Age: Men and women aged 20-40 account for about 49% of Starbucks’ total business. Also, Starbucks’ 40% of sales are by young adults who are aged 18 to 24. This is due to the fact that Starbucks positions itself as a place for university students to hang out, study and writing term papers....

Words: 253 - Pages: 2

Premium Essay

Starbucks Market Analysis

...Marketing Plan Phase One Paper Gloria Blake, Mariah Bowles, Jennifer Gardipee, Kathleen Hawker, and Lisa Mains July 23, 2012 MKT/421 Susan Craver   Summary After a long day at the office, many find themselves looking for their second wind once they punch that clock at the end of their shift. All work and no energy for play can lead to a dull and monotonous life. Finding balance between responsibility and luxury is essential in steadying our own happiness equilibrium. We all tend to have a to-do list a mile long that grows by the second, yet after eight-plus hours in our enclosed workplace we tend to yearn for our pillow, blanket, and bed. Instead of pressing pause on our day and waiting on our alarm clock to press play, let’s fast-forward right into the more exhilarating part of our day and make the most of our free-time. And to begin, what better way is there to rejuvenate our vitality than with an alcoholic-caffeinated beverage? Marketing Plan Phase I After a long day at the office, many find themselves looking for their second wind once they punch that clock at the end of their shift. All work and no energy for play can lead to a dull and monotonous life. Finding balance between responsibility and luxury is essential in steadying our own happiness equilibrium. We all tend to have a......

Words: 1444 - Pages: 6

Premium Essay

Starbucks Analysis

...person, one cup and one neighborhood at a time” 1, Starbucks is the world’s largest specialty coffee retailer. The company has more than 17,000 coffee shops in 50 countries 1, and offers a diverse product mix of premium coffee, handcrafted beverages, merchandise and fresh food. To achieve its market leader position, Starbucks has instituted the following strategies: Operations In 2012, Starbucks invested $25 million in mobile payments company Square and granted the company the exclusive rights to process credit and debit transactions at its retail locations. 2 This investment allowed Starbucks to reduce the fees charged for mobile network transactions.2 Starbucks has been expanding into other product areas through its acquisition of Evolution fresh juices, Refreshers energy drinks and the La Boulange bakery brand. 4 Of the more than 17,000 locations, Starbucks operates over 9,000 in approximately 10 countries, while licensing and franchising the balance worldwide.2 Most corporate owned stores are located in the United States. 2 Starbucks recently established regional presidents for the Americas, Asia, Europe, the Middle East, and Africa, effectively transitioning the company from a functional to a regional structure.3 With each regional president empowered to act as CEO of their respective region 3, the structure allows for the management of heterogeneous markets locally by a team with knowledge of the market. Starbucks has made efforts to increase engagement......

Words: 605 - Pages: 3

Premium Essay

Starbucks Swot Analysis

...Strategy Analysis MGMT 562 Rusty Gates Margaret Hogan Liberty McCarty Anita Ramachandran Tony Reed TABLE OF CONTENTS Executive Summary…………………………………………………………….3 Introduction……………………………………………………………………..4 External Analysis……………………………………………………………….5 Suppliers………………………………………………………...…….5 Customers………………………………………………………..……5 Competitors…………………………………………………………...6 New Entrants………………………………………………………….7 Substitutes……………………………………………………………..7 Opportunities and Threats……………………………………………..8 Internal Analysis………………………………………………………………..8 Strengths………………………………………………………………8 Weaknesses…………………………………………………………...9 Value Chain, VRIO Framework, Core Competencies……………….10 Key Strategies………………………………………………………………….11 Investment Recommendation………………………………………………….12 References…………………………………………………………………….13 2 Executive Summary Starbucks Coffee Company, founded in 1971 is headquartered in Seattle, WA and operates in 37 countries around the world. The backbone of Starbuck’s business is its company-operated retail stores. Starbucks has employed a strong differentiation strategy in order to turn a traditional $.50 commodity into a $4 experience. This following report provides an analysis of the strategies used by Starbucks to stay on top of its growing and volatile industry. Starbucks’ governing principles are based on three strategic stances: the third place experience, creating a human connection, and providing a quality everyday experience for customers. The specific strategies used by Starbucks......

Words: 6290 - Pages: 26

Premium Essay

Starbucks Analysis

...Behaviour Assignment Starbucks Tutor: Robert EllisGroup: DIP CStudent name: Yu ZHU (Michelle) 5/17/2012 | ESSAY TITLE – Starbucks : An evaluation of how the business structure, organizational culture and leadership style play roles in company success to achieve their mission statement. Mission statement A mission statement of a company that is a statement that defines the purpose or essence. The mission statement not only confirm the core purpose , but also ensure some transparency for investors and employees. (Alan, 2009) This is the most important guide, which means every part of company should pay close attention to it. Every company has established their mission statement at the beginning. Since 1971 the Starbucks began, their mission has been set up, ‘to inspire and nurture the human spirit – one person, one cup and one neighbourhood at a time’. (Starbucks newsroom, 2012)To be more clearly, the founder build Starbucks as the major purveyor of the great coffee in all of the world. Organisational structure An individual organizational structure in company is constituted by a task and reporting relationships, which allows the company to restructure, motivate, and control employees to achieve a common purpose. (Jones &George, 2005, pg. 505) Starbucks is one of the world’s largest coffee shop, it is a $6.4 billion global company with 90,000 employees, 9,700stores, and 33 million weekly customers. (Starbucks newsroom, 2012) From Starbucks show their......

Words: 2053 - Pages: 9

Premium Essay

Starbucks-Organizational Research Analysis Paper

...Organizational Research/ Analysis Paper   Organizational Research/Analysis Paper: Starbucks In 1971 Starbucks was founded on a love for coffee. Three businessmen, Gordon Bowker, Jerry Baldwin, and Zev Siegl, had a desire to share that love with Seattle by opening a small coffee shop known as Starbucks Coffee, Tea & Spice. Ten years later Starbucks had grown to four retail stores located throughout the Seattle area. Whole bean coffee was sold at all four locations. Upon reaching 100 stores in 1992 the company went public. Starbucks grew at an exponential pace thereafter, into a successful, well-known international organization that helps roughly 35 million customers a week (Stanley, 2002). The purpose of this paper is to discuss and analyze Starbucks’ organizational structure, organizational behaviors in communication and ethical decision making, and organizational goals. Organizational structure “is depicted through its organizational chart and recognizes concepts of differentiation and integration” (Anthony, Gales & Hodge, 2003). It’s a “formal composition of task and reporting relationships that allows the company to control, coordinate, and motivate employees so a common goal can be achieved (Hitt, 2008). Starbucks uses a matrix configuration by combining divisional and functional structures. Because of the complexity of matrix structures, Starbucks is categorized as a mechanistic organization, which entails high vertical and horizontal complexity, high......

Words: 1290 - Pages: 6

Premium Essay

Starbucks Startegic Analysis Project

...Sopo June 4, 2013 Starbucks Strategic Analysis Project Jared Hall Monica Diederich Brandy Putman Management 431 Dr. Sopo June 4, 2013 Starbucks Strategic Analysis Project Jared Hall Monica Diederich Brandy Putman Stage 1: Developing a Strategic Vision, Mission, and Values Starbucks is a high quality coffee empire that is composed of a host of café’s and shops that sells many different roasts of coffee and coffee drinks to an array of on-the-go customers bustling about during the course of the day throughout the entire world. To say that Starbucks is merely a coffee shop is an enormous understatement. The chain is composed of over 20,500 stores located in 62 countries. Precisely 13,279 of them are located in the U.S. alone. (Starbucks Company Profile, 2012) The company features an array of hot and cold drinks as well as sandwiches and pastries. One of the overall goals of Starbucks is also to be a home away from home featuring comfortable couches, friendly barista’s, and an inviting atmosphere. Various paintings hang on the darkly painted walls. The newest, coolest, and relaxing music is always playing in the background. In a roundabout way, the entire store is designed to help one wind down after a long day’s work, mindlessly grab a cup of very expensive Joe, and engage in deep conversations with friends and total strangers in order to forget about the stressful elements of the outside world. For the most part the Starbucks objective has......

Words: 6234 - Pages: 25

Premium Essay

Starbucks Analysis

...Key Issue 1 : การสร้างความแตกต่างเนื่องจากการเพิ่มขึ้นของคู่แข่ง เนื่องจากในปัจจุบันมีการเพิ่มขึ้นของคู่แข่งขันของ Starbucks จำนวนมาก ทั้งคู่แข่งรายใหญ่และคู่แข่งรายย่อยในแต่ละท้องถิ่น ซึ่งหลายรายมีการนำคอนเซปต์ “Third Place” ที่เป็นจุดเด่นของ Starbucks มาใช้ มีการออกแบบร้านที่เจาะจงลูกค้าเฉพาะกลุ่มมากขึ้น รวมถึงการขายกาแฟ Premium เช่นเดียวกันแต่ในราคาที่ถูกกว่า เพื่อมาแย่งส่วนแบ่งทางการตลาดของ Starbucks ดังนั้น Starbucks จึงต้องหากลยุทธ์ในการสร้างความแตกต่าง (Differentiation) ให้แก่แบรนด์ตัวเองเพื่อให้ลูกค้ารับรู้คุณค่าของแบรนด์ และจงรักภักดีต่อแบรนด์ * Strategic Alternative 1 : การเพิ่มผลิตภัณฑ์ที่ดีต่อสุขภาพทั้งที่เป็น Coffee และ Non - coffee เนื่องจากปัจจุบันผู้บริโภคมีความใส่ใจเรื่องการบริโภคสิ่งที่ดีสุขภาพมากขึ้น กลยุทธ์นี้จะดึงเอาผลิตภัณฑ์ที่ดีต่อสุขภาพมาสร้างความแตกต่าง ในส่วนของกาแฟ Starbucks ควรหันมาใช้เมล็ดกาแฟ Organic ที่มาจากแหล่งที่ปลอดภัยทั้งหมด และคิดค้นเครื่องดื่มกาแฟโดยนำส่วนผสมตามแต่ละท้องถิ่นที่มีประโยชน์ต่อสุขภาพมาเพิ่มคุณค่าให้กับกาแฟ เช่น กาแฟใส่งาดำในประเทศญี่ปุ่น กาแฟผสมน้ำขิงในประเทศจีน เป็นต้น ส่วนที่เป็น Non – Coffee ควรเพิ่มผลิตภัณฑ์ประเภทน้ำผลไม้ (Evolution Fresh), น้ำชา(Tazo Tea, Teavana), โยเกิร์ต ให้มากขึ้นเพื่อดึงดูดลูกค้ากลุ่มนี้ ข้อดี * สามารถดึงดูดลูกค้าใหม่ๆในกลุ่มคนรักสุขภาพ และรักษาลูกค้าเก่าได้ * เป็นการสร้างภาพลักษณ์ของแบรนด์ว่า Starbucks ใส่ใจผู้บริโภค และประยุกต์ตัวเองเข้ากับวัฒนธรรมท้องถิ่นนั้นๆ * ทำให้ลูกค้าได้ทดลองผลิตภัณฑ์ที่ไม่เคยซื้อมาก่อน อาจทำให้เกิดการประทับใจและซื้อซ้ำ * สร้างยอดขายเพิ่มขึ้น......

Words: 378 - Pages: 2

Premium Essay

Starbucks Analysis

...ANALYSIS OF STARBUCKS CASE Laurent Werro, Nikola Volchkov, Yuki Toyoshima, Jérôme Jayet Starbucks is a company that was founded in 1971 in Seattle by Gerald Baldwin, Gordon Bowker and Ziev Siegl. It is a specialized coffee roaster and distributor. The Company now operates in four areas: Americas which includes the US, Canada, and Latin America; Europe, Middle East, and Africa (EMEA); China/Asia Pacific (CAP). (1) GROWTH AND SUCCESS FACTORS Starbucks pays attention to product quality and shop atmosphere. They brought back the trend of coffee drinking and they also created a social trend. People come to Starbucks for different reasons but most important for high quality coffee. The comfortable atmosphere while drinking a high quality coffee created a gathered spot for customers where they enjoyed meeting a friend, read a book or work. All these factors created a unique "Starbucks experience". By doing so they earned the customers loyalty, some of them were visiting bars up to 18 times a month (2). They also created a partnership with the coffee growers and worked directly with them to ensure the highest quality of their products. Starbucks international rapid expansion is due to joint ventures with local partners and licensing agreements. Starbucks decided to set some criteria to their partners in order to keep the Starbucks experience across the globe. “Starbucks brand is built on passion and you can easily feel the passion of our partners in any of our international......

Words: 2354 - Pages: 10

Premium Essay

Starbucks Analysis

...Courtney Parker c.energizerbunny@gmail.com Courtney Parker c.energizerbunny@gmail.com Abstract Case Analysis and Three year Plan for Starbucks Abstract Case Analysis and Three year Plan for Starbucks Module 7 Final project Case Analysis - Starbucks Module 7 Final project Case Analysis - Starbucks Courtney Parker Strategy Final Project Case Analysis – Starbucks For my case study I have chosen the corporation of Starbucks. The intention of this paper is to introduce the mission and vision statement of Starbucks along with a presentation and review of their code of ethics. These statements and the code of ethics will be compared to and evaluated with the second chapter recommendations and concepts within Strategic Management: Concepts and Cases by Fred R. David. Starbucks does not have a vision statement but rather a mission statement in conjunction with a value statement of sorts. Interestingly, Starbucks mission statement is fairly far removed from coffee, their main source of profit and business venture. It states: “To inspire and nurture the human spirit – one person, one cup and one neighborhood at a time” (Starbucks.com, 2013). While the statement is inspiring, as a mission statement it fails when held to the standards put forth by Fred David. Although the mission statement for Starbucks addresses some of these, it only lightly highlights some and completely misses others. According to Strategic Management Concepts and Cases, a mission statement......

Words: 6572 - Pages: 27

Premium Essay

Starbucks Analysis

...n: Business and Management Starbucks Analysis With a mission to: “to inspire and nurture the human spirit – one person, one cup and one neighborhood at a time” 1, Starbucks is the world’s largest specialty coffee retailer.   The company has more than 17,000 coffee shops in 50 countries 1, and offers a diverse product mix of premium coffee, handcrafted beverages, merchandise and fresh food. To achieve its market leader position, Starbucks has instituted the following strategies: Operations In 2012, Starbucks invested $25 million in mobile payments company Square and granted the company the exclusive rights to process credit and debit transactions at its retail locations. 2 This investment allowed Starbucks to reduce the fees charged for mobile network transactions.2 Starbucks has been expanding into other product areas through its acquisition of Evolution fresh juices, Refreshers energy drinks and the La Boulange bakery brand. 4 Of the more than 17,000 locations, Starbucks operates over 9,000 in approximately 10 countries, while licensing and franchising the balance worldwide.2   Most corporate owned stores are located in the United States. 2 Starbucks recently established regional presidents for the Americas, Asia, Europe, the Middle East, and Africa, effectively transitioning the company from a functional to a regional structure.3   With each regional president empowered to act as CEO of their respective region 3, the structure allows for the management of heterogeneous......

Words: 334 - Pages: 2

Premium Essay

Starbucks Analysis

...Future Financial Health Analysis: Starbucks S. Albright Grand Canyon University: FIN 504 March 5, 2016 Starbucks started back in 1971 in Seattle, Washington. Initially, Jerry Baldwin, Zev Siegl and Gordon Bowker sold only coffee beans and coffee making equipment (coffee .org). It wasn’t until the company was sold to its Director of Retail Operations, Howard Schultz, that Starbucks started selling coffee drinks and soon after, Schultz spread the chain of stores throughout the U.S. taking over many small coffee shops in the process (coffee .org) In the 1990’s Starbucks offered stock options to its employees and went public with an IPO which opened the door for higher earnings and more profitability (coffee.org). This analysis will discuss how a single coffee house in 1971 has grown to more than 22,000 stores in 66 countries in 2016. Starbucks’ goals, market strategies, revenue and financial outlook will be discussed. Strategies and Operating Characteristics According to the Global Responsibility Report (2015), Starbucks vision for the future and what will have the greatest potential for impact include working with farmers for ethically sourced coffee beans, pioneering sustainability economically, socially, and environmentally, and creating career opportunities for young people (2015). Starbucks Newsroom reported on March 18, 2015 that their seven strategies would grow market capital to $100 billion (2015). Revenues are currently at $16.4 billion and the U.S. comp......

Words: 3900 - Pages: 16