Starbuck - Part 1 7s and brand identity

Company background

Commercial and Economic Model

4 Strategy Analysis

Business Development in France

Conclusion

Agenda

1. Company BackgroundStarbuck 7s (McKinsey)

1. Company BackgroundStarbuck 7s – Hard Elements

• Increase revenues through effectively

positioning Starbucks stores as 3rd place

• Tactics: product quality + customer services

Structure

• Flat management through de-layering : 1 store

manager + shift supervisors + 16 baristas

• Functional Structure

• Employees as partners: brand equity extend

through Ingesting in employees

• Rotation system of duties to reduce

workforce conflicts + increase job interesting

• Training

• Roasting coffee : deliver consistent product

quality

• Purchasing coffee: economies of scales

Strategy

System

1. Company BackgroundStarbuck 7s – Organizational charts

1. Company BackgroundStarbuck 7s – Soft Elements

Style

• Change from Laissez-faire to inspirational

management

• Motivate workforce

• Respect customers and each other

• Ethnically and Caring style

• Capable and promising candidates

• Customer Service: creation of friendly and

relationship with customers

• Lower employee turnover: generous benefit

packages, unique and flexible working

environments

• Flexible work environment: apparently flexible

work environment

• Strong vision:

Staff

1. Company BackgroundStarbuck 7s – Soft Elements

Skills

• Skillful workforce achieve high level

customers satisfaction: 24 hours-

training, star skills, coffee master

program, servant leadership

workmanship, career power, career

power for coaches workmanship

• Coffee experience: Knowledge of coffee

in supply chain management and

quality controlling. Starbucks is able to

handle each functions internally

1. Company BackgroundStarbuck 7s – Soft Elements

Share value

• Leverage the “Starbucks Experience”: -

coffee, friendly staff, interesting music

and comfortable meeting place (3rd

Place)

• Environmental Mission “Starbucks is

committed to a role of environmental

leadership in all facets of our business”

• Mission Statement “Establish

Starbucks as the premier purveyor of

the finest coffee in the world while

maintaining our uncompromising

principles while we grow”

1. Starbucks SWTOSTRENGTH WEAKNESS

• Brand leader in the coffee market

• Good Financial condition

• Clear vision – Environment concern

• Product diversification

• Product is the last socially accepted

addiction

• High brand equity

• High Brand awareness

• Customer service is excellent

• Customer base loyalty

• Approx 13,000 employees; Valued

and motivated

• Good work environment

• Convenient locations

• 16,635 stores worldwide,

• Company operated retail stores and

licensees (no franchises)

• Operating in 40 countries worldwide.

• Good relationships with suppliers

• Size

• High operating cost

• Lack of internal focus (too much

focus on expansion)

• Increasing number of competitors

• Self-cannibalization

• Closed 900 stores since 2008

• less control over stores outside U.S.

• Product pricing (expensive

compared to competitors)

• Protest against the company on

different issues

1. Starbucks SWTOOPPORTUNITIES THREATS

• Emerging international

markets

• Product diversification

• Co-branding with other

food manufactures

• Whole bean sales in

supermarkets

• New distribution channels

(delivery)

• Brand extension

• New products (Via)

• Economic recession impacts sales

• Competition (restaurants, street carts,

supermarkets,

• other coffee shops, other caffeine based

products)

• market saturation

• Coffee price volatility in developing countries

• Negative publicity from poorly treated farmers

in supplying countries

• Consumer trends toward more healthy ways

Fragile state of worldwide production of

specialty coffees

• Alienation of younger, domestic market

segments

• Corporate behemoth image

• Cultural and Political issues in foreign countries

• Labor Unions issues

• ·Variation in coffee prices in developing

countries

1. Starbucks Company AnalysisPorter 5 Forces

• Other beverages apart from coffee &tea e.g. soda,

water

• All energy drinks & pills: red-bull

• Any other quick-grab foods apart from pastries,

muffins

• Lower-end or less luxurious places e.g. tea house

• Low entry barrier

• Current outgoing threats of new entrants

like Mcdonald’s• Less bargaining

power in the

past

• New entrants

and competitors

give buyer

slightly more

bargaining

power

• Beans suppliers:

70% from fair trade;

30% from normal

trade; own

distribution

network

• Package supplier:

Starbucks has more

bargaining

• Coffee machines

Supplier

1. Brand Identity PrismInspiration of Starbuck

1. Brand PositioningPositioning Objective& Target

• Brand Image : an innovative industry leader that produces

HIGH QUALITY coffee

• Image based on Product vs Brand on Experience (3rd

place - the place between home and work where people

could gather, relax and interact with one another)

• Target : middle to high incomes, who had a desire to

purchase premium products. 20-45 years old women in

USA; Tribes in EEU

1. Brand PositioningStarbuck