Starbucks Coffee_Around the world

Around the world 50 Countries

16000 Locations

One Name Let the experience

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Introduction• Name : Starbuck (Inspired from Moby-Dick Novel) • Founders: Jerry Baldwin , Zev Siegl , Gordan Bowker• Founded:1971, Pike place market in

Settle ,Washington• Industry :Restaurant, Retail , Entertainment • Key person: Howard Schultz (Chairman, President ,

CEO)• Employed :1.6 Lac partners • Achievement: 2005:Second Best Company to work with (fortune

survey) 2010: World Most Ethical Company

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“We aren’t in the coffee business, serving people.We are in the people business, serving coffee.”

Starbuck Partner Products

History

• 1971: Starbucks opens first store in Seattle’s Pike Place Market.

• 1982:Howard Schultz joins Starbucks as director of retail operations and marketing.

• 1983: Howard travels to Italy and impressed with espresso bars in Milan.

• 1984: Starbucks to test the coffeehouse concept in downtown Seattle, where the first Starbucks® Caffè Latte was served.

History

• 1986: Howard Schultz left Starbuck and opened IL Giornale (coffee Bar)

• 1987: Starbuck was sold to Howard Schultz for $ 3.8 million

• 1992: First IPO turned to be most successful IPOs of the year

• 1996: Entered into Tokyo market• 1998: Acquired UK Seattle Coffee Company • 2009: Becomes the world’s largest buyer of Fair

Trade Certified™ coffee

Mission

• "To inspire and nurture the human spirit - One person, One cup, and One Neighbourhood at a time."

Vision

• “To establish Starbucks as the most recognized and respected brand in the world”

Starbuck Logo

•

1) Image of Twin Tail Serene is chosen because of psychological relation between lure of fresh roasted coffee, tea, spices and mythological enchanting character

2) IL Giornale logo and Starbuck logo was merged to designed new stylish Starbuck logo

3) Current logo is cropped and Zoomed version of the serene

Products• Coffee- More than 30 blends and single-origin premium

Arabica coffees

• Handcrafted Beverages- Fresh -brewed coffee, hot and iced espresso beverages, coffee and non-coffee blended beverages, Vivanno™ smoothies and Tazo ® teas, ice creams

• Merchandise- Home espresso machines, coffee brewers and grinders, coffee mugs and accessories, packaged goods, music, books and gift items

• Fresh Food- Baked pastries, sandwiches, salads, oatmeal, yogurt parfaits and fruit cups

Products• Consumer Products- VIA™ Ready Brew coffee,

bottled Starbucks Frappuccino® beverages, Starbucks Discoveries® chilled cup coffee (in Japan, Taiwan and Korea) , Starbucks Double Shot® espresso drinks, Starbucks® Iced Coffee, whole bean coffee and Tazo® teas at grocery and a line of super-premium ice creams

• Brand Portfolio- Tazo tea, Ethos water, Seattle’s Best Coffee and Torrefazione Italia Coffee

HR Policy• Motto “To have right people hiring the right people”• Starbuck –Second best company to work with• It strongly believes that motivated and committed

workforce are key to retail business • Employee friendly policies and supportive work culture • Starbucks hired people for qualities like adaptability,

dependability and the ability to work in a team.• Frontline staff at store are not allowed to use perfumes

as it may mask the fragrance of fresh coffee

HR PolicyThe Starbucks Total Pay package is called “Your Special Blend” because it’s

just for you which includes:• Competitive pay • Insurance: medical, prescription drug, dental, vision, life, disability • Bonuses • Paid time off • Retirement savings plan • Stock options and discounted stock purchase plan • Adoption assistance • Domestic partner benefits • Emergency financial aid • Referral and support resources for child and eldercare • A free pound of coffee each week

Training • For retails Job -24 hr training program in the first 2-4

weeks • Training includes classes on - Coffee History - Drink Preparation - Coffee knowledge (4 hr) - Customer Service (4 hr) - Retails Skills -Brewing the Perfect Cup (4hr )

Training • Other Training program - Using the cash register - Weighing the coffee beans - Opening and holding the Coffee bean bag - Affixing label on the package - Cleaning the espresso machine • New staffs are hired 8-10 weeks before the opening of

new store and are trained at Starbuck coffee school in San Francisco

Wake up and smell the coffee -- Starbucks is everywhere

Starbucks’ Retail Mix• Location• Merchandise assortment• Pricing• Advertising and promotion• Store design and visual merchandising• Customer service• Personal selling.

Starbucks’ retail strategy• Starbuck’s retail strategy is designed primarily to maintain

loyalty and repeat business among its target market (upscale coffee drinkers) encompasses hiring and training knowledgeable counter servers, called baristas (Italian for bartenders), to educate customers about Starbucks’ specialty coffee drinks and associated products, and to provide customers with an opportunity to take a break from their busy lives in a relaxing atmosphere.

• The company has also entered some creative partnerships to put its cafes in Nordstrom and Barnes & Noble stores and serve its coffee on United Airlines. Licensing the brand name for other food products such as ice cream and soft drinks also increases its brand awareness.

Specialty Operations

• Starbucks specialty operations strive to develop the Starbucks brand outside the Company-operated retail store environment through a number of channels.– Retail store licensing agreements– Wholesale accounts– Grocery channel licensing agreements– Joint ventures– Direct-to-consumer marketing channels

SWOT Analysis of StarbucksStrengths Weaknesses

1. Brand name recognition2. Quality Products3. Potential Internal Strengths4. Good Marketing Skills

Well Developed Corporate strategy5. Location6. Visionary leader7. Distribution8. Manufacturing competencies9. Exclusive marketing rights

1. Non-pioneer in global market2. Narrow Product line3. Complicated Products

Opportunities Threats

1. Expand into Foreign Markets2. Widen Product Range3. Diversify into new Growth Businesses4. Apply brand name capital in new areas

1. Change in consumer tastes2. City regulations3. Increase in domestic competition4. Changes in economic factors5. Downturn in economy

Competitors of Starbucks

• US: Pea's Coffee & Tea, Seattle's Best Coffee etc.

• France has sidewalk cafes, • Vienna has grand coffee houses,• Italy's high-octane espresso bars• British have long been heavy tea drinkers• The Pacific Rim, including Singapore and Japan

Starbucks plans for India

• India is one of the five countries that Starbucks is focusing on for international expansion.

• In 2006, Starbucks planned to enter into Indian market with the help of a franchisee Indonesia’s V.P. Sharma, an NRI.

• It was a 51:49 JV between Starbucks’s franchisee V.P. Sharma and Future group CEO Kishore Biyani called “New Horizons”.

• FIBP didn’t approve this JV. They said Starbucks can have 51% direct investment with an local Indian partner.

• Starbucks joined hands with PVR theater to sell Starbucks merchandise.

Starbucks plans for India

• Starbucks wants to enter the Indian market with a franchisee because it does not have to risk its own capital.

• Starbucks is in talks with Jubilant group controlled by Shyam and Hari Bhartia. It’s the Indian franchisee for Domino’s Pizza.

• In India Starbucks will face strong competition from CCD, Barista, Costa Café, Lavazza.

• Many other Coffee houses like Australian Café BB’s & Coffee Club, UK based Coffee Republic, Italian Café Nero & German Cup Cino are looking for franchisee to enter India.

Grand Strategy Options• “Market Development”

– Grow international sales volume by offering Starbucks products in grocery stores, business and other wholesale accounts

– Offering bottled Frappuccino coffee drinks, Starbucks DoubleShot coffee drink and line of super premium ice creams in the international markets

– Starbucks brand awareness to grow and develop new distribution channels with their international partners.

– Starbucks currently has a joint agreement with Alaska Air to serve Starbucks coffee on every flight

– Increased brand awareness will increase sales and their local retail sector will benefit, development of new distribution channels.

Grand Strategy Options

• "Product Development“– Starbucks needs to work with its international partners to

identify local cuisine that would be sold in the Starbucks stores to bring in the local crowds

– Starbucks Hong Kong sells curry puffs, sausage rolls and seasonal products such as Starbucks' moon cakes

– Starbucks needs to expand the music CD's that they sell to include local music and cultural tastes (Starbucks will help to promote that local community appeal of their stores)

– The Starbucks store becomes a local community gathering place not just another American corporation taking money from the economy and not giving anything back

Grand Strategy Options

• "Conglomerate Diversification“– Starbucks partner with local phone companies and

internet providers to setup internet access at their international stores

– Internet cafe's are very popular. The internet cafe's are much more popular overseas than they are in the US. This is because many people in international countries do not have home computers, so they have to go to the local internet cafe in order to send and receive email

Grand Strategy Options

• The chief global strategist of Starbucks, Howard Schultz's primary goal is to make the company's green-and-white mermaid join the ranks of the most recognized global brands such, as Coke and McDonalds

• In order to accomplish this, Schultz must manage the global expansion on a daily basis by finding the right mix of company owned stores, partnerships and licenses

• Starbucks must be willing to act quickly to any changes in the international business climate

Promotional Strategies

• Membership Cards1. Corporate Cards2. Regular Cards• Internet / Wi-Fi facility• Social Networking sites1. Facebook2. Twitter

Membership Cards (Regular)

Membership Cards(Corporate)

Conclusion

“At Starbucks its not just an exchange of coffee over the counter from one hand to another, its making a connection, creating a relation and giving an experience.”

Project source

• www.warrington.ufl.edu.starbuck case study• www.mhhe.com.business management

case/starbucks• "Case Study Starbucks" Oakland, Daniel Class

Syllabus. UOP. 2003. Tice, Carol• Bumps abroad: Starbucks chief sees overseas profit

(From: Business Journal http://www.bizjournal.com)• www.economictimes.com• www.telegraph.com

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