Star Bucks Strategies

8/8/2019 Star Bucks Strategies

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Starbucks

INDUKAKA IPCOWALA INSTITUTE OF MANAGEMENT

STRATEGIC MANAGEMENT

SHWETANG PANCHAL

09MBA22


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Background

In 1971 Gerald Baldwin, Gordon Bowker and Ziev Sieglopened a small coffee house in Seattles Pike Placemarket specialized selling aracbica beans to a niche ofcoffee connoisseurs

In 1982, Shultz joined the marketing team and a fewyears later the owners sold him the company.

The stores sold whole beans and the finest coffee with atarget market of affluent, well-educated, white collarconsumers between the ages 25 and 44.

By 1992, Starbucks had opened 140 stores in theNorthwest and Chicago.

The same year Starbucks went public despite all of Shultzskeptics


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Background

Starbucks, originally based in Seattle, was established in 1971

and today with more than 6,500 retail locations in North

America, Latin America, Europe, the Middle East and the

Pacific Rim.

Starbucks Coffee Company established itself as the dominant

and most aggressive retailer in the coffee house segment.

The company has transformed a simple beverage into a

lifestyle accessory with as much elegance as the latest fashion.

It offers whole bean coffees, espresso beverages,confectionery and bakery items and equipment in its retail

stores


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Starbucks Business & Brand

Strategy Two main business strategies: License and Joint Venture.

Worked directly with growers in various countries to

purchase green coffee beans.

Oversaw the roasting process and controlled distributionto retail stores around the globe.

Personalizing customer service, making the customer

experience personal.

Creating an inviting upscale atmosphere is also part of the

brand strategy.


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The Frappuccinos

Starbucks Corporate Strategy

Maximize market penetration

Provide a relaxing, attractive social atmosphere

Offer high-quality products Create a great working environment

Achieve profitability

Keep on to accelerate expansion and presence inglobal world


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Competitive strategies

Focused differentiation

Serve niche buyers than rivals

Resource and capabilities to serve an

attractive needs


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Global MarketingStrategy

Retailing formula is same throughout the

whole world

Product offerings are modified to suit localtastes

The advertising strategies are more local and

differentiated rather than standardized


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CompanySnapshotand Competition

The retail strategy has been to put a coffee shop on everycorner and to make fresh-brewed coffee by selling only thehighest-quality products and charging a premium priceCompetition

Competition Small-scale specialty

coffee chains

Independent specialty

coffee shops

Donut and bagel chains

Differential

Strategy

1. U.S. region-based

2. Store environment

3. Roast to order

1. Wide range of

food & beverage

2. Satellite television

3. Computers & Internet

1. Established chains

2. Coffee represents 50% of sales

3. Offers flavored coffee/ non-coffee

alternatives

Examples Caribou Coffee; Peet's

Coffee & Tea; Java

Centrale

Polly's Gourmet Coffee;

Mitchell's Coffee House

Dunkin Donuts;

Krispy Kreme


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Expansion Opportunities

Coffee consumption is on the rise in the United States. Half of the U.S. population now drinks coffee every day, and

more than a fourth of the population drinks coffee on occasion.

The markets largest growth is among drinkers of specialty

coffee. An estimated, one-third of the U.S. coffee consumption takes

place outside of the home.


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Product& Service Innovations

Product Innovations strategy

New products are launched on a regular basis.

A new hot beverage is introduced every holiday season.

The latest success in innovation is the introduction of the coffee and non-coffee based Frappuccino line.

The bottled version of the beverage has become a $400 millionfranchise, in large part due to its appeal to the non-coffee drinkers.

Service Innovations strategy

Starbucks started to launch a stored-value (SVC) card from November2001.

The prepaid card can be used in any company-operated store in North

America. (also used as a Gift Card) After less than a year, Starbucks realized $160 million in sales through

card activations and reloads.

The latest service innovation is T-Mobiles high speed internet offeredat a monthly fee in selected Starbucks locations.


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THANK YOU

Star Bucks Strategies

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