Starbucks
Firm Analysis
Compiled By:
Shelly LiaBraaten, Laura Keller, Stephanie Latimer,
Steven Austed, Nate Tuenge, Aaron Lum
Outline
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About Starbucks
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Overview
Timeline
Mission Statements
Corporate Social
Responsibility
Four P’s Analysis
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Product
Price
Place (Location)
Promotion
S.W.O.T Analysis
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Strengths
Weaknesses
Opportunities
Threats
Current Events
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Ichiro Card
Ethos Water
Giving Voices
About Starbucks
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Overview
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Timeline
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Mission Statements
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Corporate Social
Responsibility
About Starbucks
Overview
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Specialty Eatery in the Quick-Service Restaurant sector
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Established in 1971 in Seattle, Washington
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Named after the first mate in Moby Dick
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Known for its quality coffee and stylish atmosphere
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Over 9,000 locations in 35 countries
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New CEO: Jim Donald (2005)
About Starbucks
Timeline
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1971 – First Starbucks coffee shop opens in Seattle’s Pike Place Market – coffee bean roasting
company
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1985 – Howard Schultz becomes CEO and founds Il Giornale Coffee Company – espresso
beverages using Starbucks coffee beans
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1987 – Changes name to Starbucks Corporation
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1992 – IPO under the trading symbol “SBUX”
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1995 – Starbucks Coffee International opens in Japan
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1996 – Begins selling bottled Frappuccino drinks
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1999 – Acquires Tazo Tea company and Hear Music company
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2003 – Acquires Seattle’s Best Coffee
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2005 – Introduces Starbucks Coffee Liqueur; Acquires Ethos Water
About Starbucks
Mission Statements
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Company Mission Statement:
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“Establish Starbucks as the
premier purveyor of the finest
coffee in the world while
maintaining our uncompromising
principles while we grow.”
Environmental Mission Statement:
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“Starbucks is committed to a role
of environmental leadership in all
facets of our business.”
About Starbucks
Corporate Social
Responsibility
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“Starbucks focuses its efforts on improving social and economic
conditions for coffee farmers; minimizing our environmental impact;
making a positive contribution in the communities where we do
business; and providing a great work environment for our partners
(employees).”
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Make Your Mark – matches cash contributions for volunteer work to
designated nonprofits
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2004 EnviroStars Recognized Leader Award – for environmental
leadership in the Seattle community
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C.A.F.E – Coffee and Farmer Equity – environmentally, socially, and
economically guidelines for buying coffee from farmers – promotes
mutually beneficial relationship
About Starbucks
Target Market
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Starbucks says that they do not
target a specific market
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Products are consumed by
people who want to take a
break from the daily work
routine and those who want a
caffeine stimulant
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Distinguished from traditional ‘coffee shop’ because of the
taste of the coffee and the ‘hip’ or ‘fashionable’ store
environment
Four P’s
Analysis
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Product
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Price
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Place (Location)
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Promotion
Panini
Four P’s Analysis
Products (in store)
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Starbucks sells brewed coffees,
espresso beverages, cold blended
beverages, food items, teas,
branded coffee drinks, a line of
ice creams, and a line of compact
discs through its retail stores
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Also offers pastries, sodas, juices, games, seasonal novelty
items, and coffee-related accessories and equipment
Four P’s Analysis
Products
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Starbucks also engages in
purchasing, roasting, and
selling whole bean coffees
worldwide to grocery stores and
large hotels
Four P’s Analysis
Price
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Prices range from $1.00-$4.20 for drinks
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Surprisingly, this is lower than its rivals, although
not by much
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Starbucks regular coffee was 4% less expensive
and its iced blended drinks were as much as 30% less
expensive when compared with specialty competition
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When compared to quick-service restaurants, however,
Starbucks was more expensive. Dunkin’ Donuts’ 16-ounce latte
is an average of 17% cheaper
Four P’s Analysis
Prices on the Rise
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Starbucks is planning to
raise prices this year
because of an increase in
milk and green coffee bean
prices
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This could also be due to the
fact that specialty
competition has been
charging more
Four P’s Analysis
Locations
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Operates in all 50 states
plus the District of Columbia
and Puerto Rico.
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They also operates in 34
countries outside the United
States such as Australia,
Canada, China, Germany,
Singapore, Thailand, and the
United Kingdom to name a
few.
Four P’s Analysis
More on Locations
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Starbucks retail stores are typically located in high-traffic, highvisibility locations.
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Because the Company can vary the size and format, its stores
are located in or near a variety of settings, including downtown
and suburban retail centers, office buildings and university
campuses.
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The Company can also locate retail stores in select rural and offhighway locations to serve a broader array of customers outside
major metropolitan markets and further expand brand awareness.
Four P’s Analysis
More on Locations
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While the Company selectively locates stores in shopping malls,
it focuses on locations that provide convenient access for
pedestrians and drivers.
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To provide a greater degree of access and convenience for nonpedestrian customers, the Company has increased focus on
drive-thru retail stores.
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At the end of fiscal 2004, the
Company had approximately 700
Company-operated drive-thru
locations
Four P’s Analysis
Promotions
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Starbucks has been able to use a standardized advertisement
theme around the world in order to incorporate different
cultures.
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Currently they are promoting their new Tazo green tea
Frappuccino Blended crème. (Inspired by Japanese tradition)
S.W.O.T
Analysis
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Strengths
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Weaknesses
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Opportunities
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Threats
S.W.O.T Analysis
Strengths
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Starbucks Corporation is a very profitable organization,
earning $600 million and generating revenue of $5 billion in
2004.
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Ad Week Magazine recognized the Company as one of the
“Most Trusted Brands” in 2003. “The Starbucks logo is
recognized by most, which also helps to retain customers that
travel internationally, allowing them to get the same Starbucks
coffee in the same Starbucks cup that they enjoy back home.”
S.W.O.T Analysis
Strengths (continued)
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It is a global coffee brand built upon a reputation for fine
products and services. It has about 8500 stores in over 30
countries.
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Starbucks was one of the Fortune Top 100 Companies to
Work For in 2005. The company is a respected employer that
values its workforce.
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They have strong ethical values and an ethical mission
statement as follows, “Starbucks is committed to a role of
environmental leadership in all facets of our business.”
S.W.O.T Analysis
Weaknesses
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Starbucks has a reputation for new product development and
creativity. However, they are dependant on a main competitive
advantage, the retail of coffee.
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Overcrowding the Market: If Starbucks has two stores close to
each other, they potentially take business away from each other.
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They have a strong presence in the United States with more
than three quarters of their cafes located in the home market.
Many have said that they need to look for a portfolio of
countries, in order to spread business risk.
S.W.O.T Analysis
Weaknesses (continued)
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They have been facing certain difficulties in some of its
international operations. In 2003 Starbucks ended its joint
venture in Shalom in Israel and closed six stores in Tel Aviv.
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There was the infamous situation after September 11, when the
Starbucks in Manhattan charged firefighters outrageous prices
for water, $130 for three cases.
S.W.O.T Analysis
Coffe (other
mills)
300.0
250.0
200.0
150.0
100.0
50.0
0.0
Coffee
(robusta)
Tea,
auctions (3)
avg.
20
00
20
01
20
02
20
03
20
05
20
10
20
15
Suppliers
Weather?
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Price (Cents / KG.)
Threats
Year
Fuel costs?
Re-adjustments
to licensing
contracts?
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Distribution
Marketing
Advertising
Promotions
S.W.O.T Analysis
Threats (continued)
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Gov. Regulation
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Minimum Wage?
New Entrants
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Krispy Kreme?
S.W.O.T Analysis
Opportunities
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Joint Venture
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Krispy Kreme?
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Innovation
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RTD’s & Ice-Cream
Breakfast Snack Bar?
S.W.O.T Analysis
Opportunities (continued)
Current Locations 2003
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Market Expansion
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China & Europe
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Suria KLCC- Mall at the base of the
Petronas Twin Towers; KL, Malaysia
Menu Expansion?
Full Service Breakfast &
Lunch Eatery?
Current
Events
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Starbuck hear music
Starbuck’s card
Wireless Internet
Brewing equipment
Ichiro Card
Ethos Water
Giving Voices
Current Events
Ichiro Card
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Starlight Starbright
Children's Foundation
Current Events
Ethos Water
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Five cents from the sale of each bottle of
Ethos(TM) Water will support Starbucks
goal of donating $10 million over the next
five years to non-profit organizations that
are helping to alleviate the world water
crisis.
Current Events
Giving Voices
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The grant program -- called "Giving Voice" -- will primarily
fund educational initiatives for youth, aged between six and
18 years old, in the arts, literacy, and environmental
education.
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The grants will range from $5,000 to $20,000 and will be
awarded twice a year.
Sources
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Brewing Equipment; http://www.starbucks.com/retail/brewing.asp
Card; https://www.starbucks.com/card/default.asp
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Datamonitor - Starbucks Corporation;
http://www.investor.reuters.com/data/files/Company%20Profile%20Sample%20for%20
Reuters.pdf
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Ethos Water;
http://www.fortune.com/fortune/investing/articles/0,15114,1089995,00.html?prom
oid=yahoo
Giving Voice; http://biz.yahoo.com/bw/050802/25224.html?.v=1
Hear Music—Norah Jones;
http://www.starbucks.com/hearmusic/product.asp?category%5Fname=Our+Com
pilations&product%5Fid=795016
Ichiro Card;
https://www.starbucks.com/card/exclusives.asp?category%5Fname=Exclusives&
product%5Fid=Ichiro
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Jim Donald brings new energy to Starbucks CEO post; 31 March 2005;
http://seattlepi.nwsource.com/business/218261_starbucks31.html.
Sources
(continued)
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Marketing Teacher; http://www.marketingteacher.com/
SBUX: Profile for STARBUCKS CP - Yahoo! Finance
Shareowner: Starbucks corporation
Starbucks Apologizes for Water Flap;
http://www.foxnews.com/story/0,2933,35198,00.html
Starbucks Company Fact Sheet; August 2005;
http://www.starbucks.com/aboutus/Company%20Fact%20Sheet%20Apr05.pdf.
Starbucks Company Profile; August 2005;
http://www.starbucks.com/aboutus/CompanyProfileFeb05.pdf.
Starbucks Company Timeline; August 2005;
http://www.starbucks.com/aboutus/CompanyTimelineFeb05.pdf.
Starbucks Corporation; http://www.starbucks.com/default.asp
Starbucks Everywhere; http://www.starbuckseverywhere.net
The Insider: Starbucks' prices won't be cheaper for much longer
Wireless Internet; http://www.starbucks.com/retail/wireless.asp
Yahoo! Finance; http://finance.yahoo.com