Starbucks 3

8/2/2019 Starbucks 3

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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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Starbucks 3

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Starbucks 3