Transcript
Case # 5: Starbucks Coffee company
Team MembersAbdul Majid
Umer Hayat
Azfar SajjadUsman Anwar
Faisal Ibrahim
Starbucks 07/31/2015
Table of Contents• Introduction• Vision Statement• Mission Statement (1990-2008)• EFE matrix• IFE matrix• CPM matrix• SWOT matrix• SPACE matrix• IE matrix• GRAND STRATEGY matrix• BCG matrix• Action Plan & Recommendations
Starbucks 07/31/2015
History
Starbucks 07/31/2015
• First Starbucks opened in Seattle Washington
• March 30, 1971
• Jerry Baldwin-English Teacher
• Gordon Bowker-Writer
• Zev Siegh – History Teacher
CONTINUE…
• Entrepreneur Howard Schultz joined the company
in 1982
• Director of Retail Operations and Marketing
• Idea of selling beverages
Starbucks 07/31/2011
CONTINUE…• April, 1984 first store to sell beverages was opened
• Served 400 customers – over the 250 customer
average at their best store
• II Giornale Acquires Starbucks
• Howard Schultz – Starbuck’s President and CEO
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CONTINUE…• World's premier roaster and retailer of specialty
coffee
• 8,812 company-owned stores
• 7,852 licensed stores in more than 50 countries
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CONTINUE…• Annual sales of about $10 billion as of April 2010
• Sell : beverages, pastries, whole bean coffee,
ground coffee, and coffee-related products
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VISION STATEMENT
To inspire and nurture the human spirit – one person, one cup and one neighborhood at a time.
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Mission Statement1990 – October 2008
• Establish Starbucks as the premier purveyor of the
finest coffee in the world while maintaining our
uncompromising principles as we grow.
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Competition
McDonalds Dunkin Donuts
Second Cup New World Coffee
Caribou Coffee
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EXTERNAL FACTOR EVALUATION
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External Factors Evaluation (EFE Matrix)
Weight Rating Weighted Score
Opportunities
International Markets .10 1 .10
Global expentipion .11 4 .44
Long-term Industry Growth .10 3 .30
New product mix .09 4 .36
Purchasing companies .10 1 .10
Strong financial support .12 4 .48
Threats
Terrorist Attacks & Safety issue .11 3 .33
New entrants .09 4 .36
Government Regulations .10 3 .30
US market saturation .08 3 .24
TOTAL 1.00 3.01
INTERNAL FACROR EVALUATION
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Internal Factor Evaluation (IFE Matrix)
Weight Rating Weighted Score
Strengths Innovation .11 4 .44
Global presence .12 4 .48
Profitability .06 3 .18
Brand Recognition .10 4 .40
Store ambience .12 4 .48
High market share and market growth .06 3 .18
Limited number of strong competitors .06 3 .18 High quality customers service .08 4 .32
Weaknesses High employee turnover .10 1 .10
High prices .06 2 .12
Over dependence on US markets .05 2 .10
Too many products .08 1 .08
TOTAL 1.00 3.06
COMPETITIVE PROFILE MATRIX
Starbucks 07/31/2015
(CPM) Starbucks McDonalds Dunkin
Donuts
3.072.76
3.20
1.00Total
0.2730.27
30.18
20.09Financial Position
0.3330.33
30.33
30.11Customer Service
0.3630.36
30.48
40.12Global Expansion
0.6840.51
30.68
40.17Customer Loyalty
0.4530.45
30.45
30.15Price Competitivenes
0.3630.36
30.36
30.12Product Variety
0.4230.28
20.42
30.14Advertising
0.2020.20
20.30
30.10Product Quality
ScoreRating
Score
Rating
Score
Rating
Weight
Critical Success Factor
COMPETITIVE PROFILE MATRIX
CPM of Star Bucks is 3.20 which is higher than its competitors so they have competitive advantage.
SWOT MATRIX
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SWOT MatrixStrengths – S1) Profitability2) Brand Recognition3) Global Presence
Weaknesses – W 1) Uneven worldwide
distribution2) Product Pricing3) Overdependence on US
markets
Opportunities – O 1) Global Expansion2) New Markets3) Purchasing Companies
SO Strategies1) Re invest profit in new
markets2) Use its brand to sell new
products3) Expand global presence by
purchasing companies
WO Strategies 1) New markets will balance distribution2) Lower prices for new products3) Purchase companies to survive
Threats – T1) New entrants2) US market saturation3) Government Regulation
ST Strategies1) Offer better stakeholder
value2) Ensure a strong foundation3) Grow according to the rules
and regulations
WT Strategies 1) Enter into new countries before competition2) Lower prices in Asia
SPACE MATRIX
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SPACE MatrixInternal Strategic Position External Strategic PositionFinancial Strength (FS) Rating Environmental Stability (ES) RatingReturn on InvestmentWorking CapitalNet incomePrice Earning Ratio
5664
Technological changesRate of inflationCompetitive pressureDemand VariabilityPrice Range of Competing Service
-3-3-2-5-1
FS average 5.25 ES average -2.80
Competitive Advantage (CA) Rating Industry Strength (IS) RatingMarket ShareService qualityCustomer loyaltyCompetition’s capacity utilization
-1-2-2-1
Profit potentialGrowth potentialFinancial StabilityResource utilization
6555
CA average -1.50 IS average 5.25
Conclusion:-Directional vector coordinates: X-axis -1.50 + 5.25 = 3.75 Y- axis 5.25 + (-2.80) = 2.45Therefore, the Starbucks should pursue Aggressive Strategy.
+6
+6-6
-6
SPACE Matrix FS
ES
ISCA
Conservative Aggressive
CompetitiveDefensive
(3.75, 2.45)
IE MATRIX
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(IE) Internal & External Matrix
IFE Total Weighted Scores (3.06)
EFE Total Weighted Scores
(3.01)
Strong4.0 to 3.0
Average2.99 to 2.0
Weak1.99 to 1
High 3.0 to
4.0
GROW & BUILD
Medium
2.0 to
2.99
Low1.0 to
1.99
GRAND STRATEGY MATRIX
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Grand Strategy MatrixWEEK COMPETITIVE
POSITION
RAPID MARKET GROWTH STRONG
COMPETITIVE
POSITION
Quadrant II Quadrant I
Quadrant III Quadrant IV
SLOW MARKET GROWTH
BCG MATRIX
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Grand Strategy MatrixWEEK COMPETITIVE
POSITION
RAPID MARKET GROWTH STRONG
COMPETITIVE
POSITION
Quadrant II Quadrant I
Quadrant III Quadrant IV
SLOW MARKET GROWTH
Action Plan & Recommendations
• Enhance atmosphere– Entertainment to attract more customers
• Increase marketing• Advertise• Sales promotions• Promote healthy products
Starbucks 07/31/2015
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