Group Members
Li Merlina (Merlin)
M987Z246
Huynh Than Phong
(phong) M987Z242
Victor Marbun
(victor) M987Z259
Nguyen Thi Thanh Nhan
(Nhan)M987Z232
Thidarat
Prasitpornphakdee
(Nok) M987Z245
江孟唐
Chiang Meng-Tang (Johnson)
M98C0242
Outline
1.Introduction about Starbuck Corporation
2.Controllable and Uncontrollable Elements
3.Risks and The solutions
4.Overall Corporate Strategy of Starbuck
5.Strategy for improving productivity in Japan
6.Conclusion
Introduction about Starbuck
Corporation
Beginning to 1990
 The original Starbucks was opened in Pike Place Market in
Seattle, Washington, in 1971 by three partners: English
teacher Jerry Baldwin history teacher Zev Siegel, and writer
Gordon Bowker.
 In 1984, the original owners of Starbucks, led by Baldwin,
took the opportunity to purchase Peet's .
Introduction about Starbuck
Corporation
 In 1987, they sold the Starbucks chain to Schultz's Il
Giorna.
 Starbucks opened its first locations outside Seattle at
Waterfront Station in Vancouver British Columbia and
Chicago, Illinois that same year
Introduction about Starbuck
Corporation
1990 to 2008
• The first Starbucks location outside of North America opened in
Tokyo in 1996.
• Starbucks entered the U.K. market in 1998 with the acquisition
of the then 60-outlet, UK-based Seattle Coffee Company, rebranding all its stores as Starbucks .
Introduction about Starbuck
Corporation
• In 1999, Starbucks experimented with eateries in the San Francisco
Bay area through a restaurant chain called Circadia.
• In April 2003, Starbucks completed the purchase of Seattle's Best
Coffee and Torrefazione Italia from AFC Enterprises, bringing the
total number of Starbucks-operated locations worldwide to more
than 6,400
Introduction about Starbuck
Corporation
 On September 14, 2006, rival Diedrich Coffee announced that it
would sell most of its company-owned retail stores to Starbucks.
 In January 2008, Chairman Howard Schultz resumed his roles as
President and Chief Executive Officer after an eight year hiatus and
replaced Jim Donald, who took those posts in 2005.
Collaboration
• In 1995, the company
collaborated with
Dreyer's Grand Ice
Cream to introduce
Starbucks Coffee Ice
Cream and
• the following year with
Pepsi-Cola Company for
its bottled Starbucks
Frappuccino drinks.
Coffee Bean Sources
Starbucks Coffee
Starbucks Profit
Starbucks Chain
Starbucks Now
• Starbucks is the largest coffeehouse company
in the world, with 16,635 stores in 49
countries,
• including 11,068 (6,764 Company Owned,
4,304 Franchised) in the United States,
• nearly 1,000 in Canada and
• more than 800 in Japan.
The Controllable and Uncontrollable
elements that Starbucks has
Encountered in Entering Global
Markets.
Name of the country
Element
Controllable
Uncontrollable
Japan
1.Competition among rival
shops in Japan.
2.Economic depression.
France
Political and legal bindings.
(France’s arcane regulations
and generous labor benefits.
Italy
Vienna
Price (Italian coffee bars
prosper by serving food as well
as coffee, and area where
Starbucks still struggle. Also
Italian coffee is cheaper than
US java say, Italian purists,
much better. Americans pay
about & 1.5 for an espresso, on
the other hand northern Italy
the price is 67 cents, in the
South just 55 cents
Culture (young are always
enthusiastic about new and
they embrace the new. So,
Starbucks will get positive
advantages in expanding their
business in Vienna compared to
existing coffee shops there).
RISKS
Rising Prices of the commodities:
Starbucks is heavily reliant on raw materials and a
spike in prices could dramatically narrow the
company's profit margin.
 Coffee: this higher-quality coffee often carries
a substantial price premium, depending on market
supply and buyer demand at the time of purchase
 Dairy: Starbucks is a major consumer of dairy.
RISKS
Cannibalization
The main risk Starbucks faces is its own
dominance – with starbucks in every corner of a
street there is likelihood of cannibalization of
sales from existing locations
 Competition : Because of rising prices
starbucks may lose customers to their less
expensive competitors. McDonalds and Dunkin
Brands sell coffee which is cheaper than that sold
by starbucks.
RISKS
Health Concerns: Consumers’ awareness of
the rise of obesity has caused some “would-be”
starbucks customers to turn to their health
options. Most of the beverages contain dairy,
sugar and a good amount of caffeine.
Consumer Spending: The slowing U.S
Economy is really having a negative effect on
the business because people will be cutting
down on their spending on luxuries like coffee.
SOLUTIONS
Starbucks must push to be the first mover.
Innovate new products to stay ahead of
such competitive tactics.
SOLUTIONS
Should become alert towards competitive market
With the health concerns from the customers
Starbucks should look at healthier commodities like
2% and soy milk in many of its products
SOLUTIONS
Improved Advertising- Starbucks should step
up its campaigns on promotions
Widens Target Market – the company should
diversify its offerings and include the lower
and the middle earners and also children.
Overall Corporate strategy of
Starbucks
• Provide a great work environment and treat each other
with respect and dignity.
• Embrace diversity as an essential component in the way we
do business.
• Apply the highest standards of excellence to the
purchasing, roasting and fresh delivery of our coffee.
• Develop enthusiastically satisfied customers all of the time.
• Contribute positively to our communities and our
environment.
• Recognize that profitability is essential to our future
success.
Starbucks in Japan
• New shops attracted large crowds, but the effect wore
off as the market became saturated.
• Japan was a success when they first opened new stores;
– they need to research their customers and market to
find out the sudden change.
– By being more aware of their customers and their
likes and dislikes
– They will be able to find out what adjustments are
needed to become more successful.
Strategy for improving productivity in
Japan
•
•
•
•
The stores in Japan are similar to other Starbucks Coffee locations. At these new stores, welltrained, friendly baristas customize and serve a variety of Starbucks Coffee drinks to every
patron, just like the stores in North America. In addition, Japanese customers are able to
purchase Starbucks Coffee beans
With the launch of Green tea Frapucinno, Starbucks had made a Big Hit in Japan market.
After rapidly building its brand in Japan over the last five years, Starbucks now needs to
adjust its approach.
While the average annual revenue per store has declined in Japan, Mr. Schultz said, ''it is still
significantly higher than in North America -- 60 percent higher.'’
Starbucks Experience
•
•
•
•
•
•
•
•
•
•
Comfortable setting to create positive and uplifting experience.
Inviting stores ambience.
Unique warmth that sets apart from “work” and “home”
Customized beverage order.
Emotional connection between Barista and customers
Most of Starbucks customers are not price sensitive.
Benefit from strong brand.
Be able to change more.
Less brand switching.
Prevented erosion in market share.
Order Starbucks Online
• By finding the nearest
Starbucks nearest shop
using GPRS
• Application use in
iPhone
• Pay using Starbucks
card barcode and no
need swipe
• For now only can be use
in USA
New Product Innovation
• Starbucks Coffee Liqueur is the
company's most recent
attempt to extend the iconic
brand from the strip mall to
bars and kitchens everywhere.
• The new Starbucks product is
the result of a joint venture
with Jim Beam Brands Co.,
makers of various spirits and
wines
• Sold in 750 ml bottles, the
packaging immediately
conjures the three main
elements at play: liquor, coffee
and Starbucks
Conclusion
• Capitalism cause greed this prove by starbucks
strategies all over US
• Low wage employee could lead to disaster
because it will lead to high turn over
• Starbucks strategy by keeping prices in every
country stay the same can lead to disastrous
strategy
• Starbucks have to customize their marketing in
different countries in order to keeping their sales