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Starbucks 3

Apr 06, 2018

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    PRINCIPLE OF MANAGEMENT

    EIB 10303MOHD FEKHRI MOHD BAKRI

    ZAID HARITHAH BIN ZAINULABID

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    History

    1970s First starbucks opens.

    Only in Seattle

    1980s

    Howard Schultz joins Starbucks

    He sees lattes and mochas business potential

    Then Seattle become coffee-crazy

    1990s

    Expand to the rest of USA

    Then to the entire world

    One of the companies to offer stock option to its part time

    employees

    Become public traded company

    2000s

    6000 locations in over 30 countries.

    Frappucino and Tazo

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    Nature of business

    Licensing

    Coffee bean product

    Variety of high quality product, fresh coffee

    Beverages, espresso

    Tea

    Accessories and equipment

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    Vision and Mission to inspire and nurture the human spirit one person, one cup and

    one neighborhood at a time.

    Our Coffee It has always been, and will always be, about quality.

    Our Partners We always treat each other with respect anddignity. And we hold each other to that standard.

    Our Customers When we are fully engaged, we connect with,laugh with, and uplift the lives of our customers even if just for afew moments.

    Our StoresIts about enjoyment at the speed of life sometimesslow and savored, sometimes faster. Always full of humanity.

    Our Neighborhood We can be a force for positive action

    bringing together our partners, customers, and the community tocontribute every day.

    Our Shareholders - We are fully accountable to get each of theseelements right so that Starbucks and everyone it touches canendure and thrive.

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    Objectives1.

    Sales 25% annual sales and earning growth in 2013.2. Growth planned 1,200 outlet worldwide in 2005 and target

    10,000 outlets in 2013

    3. Profit To get more profit gained by cutting production costwith using technology - $70 million revenue based on new

    technology in 20134. Customer increase our customer by using advertisment-

    increase spending on advertising from 1% to 5% in 2013

    5. Employment install a reward for performance program toimprove employee motivation, and a program of the

    Corporate Ambassador Award (an award for the bestemployee with regard to customer interaction and companysupport) starting 2013

    6. Shareholder-encourage them to invest in the companythrough their performance by planning to increase the share

    by 19% in 2013

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    Business Strategies

    Strategies

    1. InternationalExpansion

    2. Predatory realestate

    3. IntroducingStarbucks card

    4. High-speedwireless internetservices

    Advantages

    1. Globallyrecognized and35% increase inforeign base

    2. Keep competitorsout

    3. Cut transactiontime

    4. Can attractyounger customer

    Disadvantages

    1. Companys sharesdropped to 20-50%

    2. Condemned byactivist and somecustomer

    3. Costly

    4. Sales ofbeverages willdropped by 7%

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    SWOT ANALYSIS Strengths1. Global brand2. Strong financial base3. Quality of the coffee and

    services4. Good relationship with

    supplier

    Weaknesses1. Lack of young customer2. Unhappy employees3. Expensive4. lack of internal focus

    Opportunities1. Growth of international

    markets2. New product3. Technology advance

    4. Brand extension

    SO Strategies1. Open more outlet2. Introduce and increase R&D

    to develop more product3. High technology to cut the

    cost

    WO Strategies1. Diversify products from

    beverage to more youthfulproduct

    2. Increase market to reduce the

    price tag3. Strengthen the internal focus

    by high quality training

    Threats1. Cultural challenges2. Competitors3. US market saturation4. Consumer trends toward

    more healthy ways and awayfrom caffeine

    ST Strategies1. Give promotion and work

    more pay more concept2. Making a clear statement

    and making peace campaign

    3. Predatory real estate tokeep competitors out

    WT Strategies1. Reward and punish system to

    employees2. Make campaign about the

    benefits of coffee3. Unsaturated US market by

    increasing young customer-

    special package and discountfor them

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    Key Success Factors

    1. Brand image Starbuck is most recognized andrespected brand in the world.

    2. Experience has been very important for thecompany as they have realized that this is one of

    the strongest concepts attached to the company3. Product Quality The high quality of the products

    (coffee, teas, other products related to their use)

    4. Innovation Launched Starbuck express andexpansion of high speed wireless internet service

    5. Customer Service Faster customer service

    (installed automatic espresso machines to speedup)/introduced Starbucks for Android

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    Marketing CommunicationsStrategies

    1. Brand Marketing

    2. Smart Partnerships

    3. Customer Satisfaction

    4. Advertisement

    5. Creating a Starbucks Community

    Justification

    1. Focused on word-of-mouth advertising andletting the high quality of their products andservices speak for themselves.

    2. Create strategic partnerships thatdemonstrate the fact that another way to growyour business is to partner smart.

    3. Customers must feel the uniqueness ofenjoying their Starbucks coffee experience.

    4. Increase advertisement through by

    technology (YouTube, magazines, website)

    5. Help a community around the world thusmake the company more well known. Ex: dealwith poor farmers

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    Control & Monitor

    1. Weekly and monthly review to make surewe are on the right track.

    2. Appoint high rated financial manager to

    control major financial expenditures.3. Develop performance indicators and

    information system to monitor progress.

    4. keeping each one of the stores

    corporately owned by the company tomake sure that high employee relationsand good customer service is consistent

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    Howard Schultz:

    We arent in the coffee business, serving

    people. We are in the people business,serving coffee. (Fortune Magazine, Vol. 149No. 2)

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    Thank you

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