1. The History of Starbucks1971 1982 Gordon Bowker Zev SiegelJerry BaldwinHoward Schultz II Giornale 1985 1987

2. Coffee / Coffee house industry 3. NIDA 4. 1. What are the attractive and unattractivefeature of the specialty coffee/coffeehouse industry?Attractive Opportunity - Market growth Gathering places Alternative to drink 5. Unattractive Excessive competition Regulate coffee houses The cost of coffee beans 6. 2. What are Starbucks sources of competitive advantage and are they sustainable?7-S : Strategy Make a powerful about product s quality Pampering employees Schultz believes that happy employees arethe key to competitiveness and growth.He said I want our employees to know wevalue themDeveloping relationship with suppliers and customers Brand loyalty Capital and technology Atmostphere Location 7. 7-S : Structure avoid the overlap problem7-S : System Efficiency of selection systemand storage system 8. 7-S : Shared value Employee ownership7-S : Style Slow growth policy 9. 7-S : Staff Empowering corporate culture Employee turnover 7-S : Skill Recruitment and training Service 10. STARBUCKS : Mission Statement 11. STARBUCKS : A New Coffee Vision 12. STARBUCKS : GOALShort-term goalOpen 1,500 locations in 2005(note: Starbucks does not franchise). Long-term goal30,000 Locations within year 2015.To be as recognizable a brand as Coke. 13. STARBUCKS : Corporate StrategyHoward Schultz has 4 companies as Role ModelsService & Training Highly Growth Employee ownership Social sharing 14. STARBUCKS : Corporate StrategySecuring the Finest Raw Material High Quality ARABICA, Narino Supremo , Fair Trade, Vertical Integration The STARBUCKS ExperienceWe re not only just selling a cup of coffee, We re provide an Experience Building a Unique CultureThe Happy employees are the key to competitiveness andgrowth Slow-Growth but IntensivelyNo franchise, Mail order expansion, Foreign Partner :Starbucks Way Leveraging the BrandMultiple Channels of Distribution, Brand Extensions 15. STARBUCKS WAY : International Affair 16. STARBUCKS : SWOT AnalysisSTRENGTH Global presence, Strong BrandA disciplined innovatorIncrease in revenues and profitsClustering of company units 17. STARBUCKS : SWOT AnalysisWEAKNESSES Reliance on US market (75% of Income) Reliance in beverage innovation (Just started to extension) Lower returns on equity than peers Problem in some international operations 18. STARBUCKS : SWOT AnalysisOPPORTUNITIES Growth in coffee market New Product Market expansion: Asia growth potential Decreasing of carbonates and alcoholics drink No major competitor in retail beverage segment 19. STARBUCKS : SWOT AnalysisTHREATS Volatile coffee markets Rising dairy costs Slowing US retail sales, drop of US coffee drinker Competition CEO (Smith) retiring in 2005 20. STARBUCKS : SWOT Analysis STRENGTHWEAKNESSESGlobal presence, Strong Brand Reliance on US market (75% ofA disciplined innovator Income)Reliance in beverage innovationIncrease in revenues and profits(Just started to extension)Clustering of company units Higher cost in employee wagesStrong in coffee supply chain Lower returns on equity than peersProblem in some internationaloperationsOPPORTUNITIES THREATSGrowth in coffee market Volatile coffee marketsNew Product Rising dairy costsMarket expansion: Asia growthpotentialSlowing US retail sales, drop of UScoffee drinkerDecreasing of carbonates andalcoholicsCompetitionNo major competitor in retail beverageCEO retiring in 2005Only 1% of US pop. has triedStarbucks 21. 3. How will Starbucks keep its marketshare, given the rapid entry of new competitors?Try to do follow the corporate strategy that can make Starbucks be a fastest growing. Securing the Finest Raw Material The STARBUCKS Experience Building a Unique Culture Slow-Growth but Intensively Leveraging the BrandAdd some issue about International Expansion and Diversify some new product. 22. 3. How will Starbucks keep its marketshare,given the rapid entry of new competitors?Work to make foreign operations profitable as quickly as possible. Continue to pursue rapid expansion of Starbucks stores in the U.S. Continue to pursue the opening of Starbucks stores in foreign countries using both licensing and company-owned and - operated stores. Look at making more acquisitions of coffee-house chains as a way of entering foreign country markets. Experiment with bigger Starbucks stores having a bigger menu-offering than just coffee and pastriessit-down meals to attract lunch and dinner traffic. 23. 4. How can Starbucks have a slow-growth policy and yet be one of the fastest growing company? Slow-growth policy but intensively to expansionNo Franchise : Owner storesMail Order ExpansionProfitability in All LocationsForeign Partner : Starbuck Way Reliability in Quality and Service Customer Satisfactions International Affair : Starbucks Way 24. 4. How can Starbucks have a slow-growthpolicy and yet be one of the fastest growingcompany?Starbucks Location 1000900800676?700600425500400 272300NOW 165 11620084 653310001988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 25. 4. How can Starbucks have a slow-growth policy and yet be one of the fastest growing company?Starbucks Location 8,648 100009000 6,85080005,68870004,70960005000 3,50140002,135 1,8863000 1,412 1,0152000676 425272 165 1161000 65 84 33 0 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 26. 5. What are the advantages and disadvantages of Starbucksdegree of vertical integration and channel expansion ? Advantages of vertical integrationProduct quality s control1. Good relationship with Supplier / Coffee bean Farmer2. Control production / Control Roasting 27. 5. What are the advantages and disadvantages of Starbucksdegree of vertical integration and channel expansion ? Advantages of vertical integrationService Quality s Control 1. Employee Feeling : Business s partner 2. Benefits programs 3. Recommendation :Product s choosing, Coffee bean, Production,How to do by yourself. 28. 5. What are the advantages and disadvantages of Starbucksdegree of vertical integration and channel expansion ? Advantages of vertical integration New Standard 29. 5. What are the advantages and disadvantagesof Starbucksdegree of vertical integration andchannel expansion ? Disadvantages of vertical integration Product quality s control 1.Cost, Expense 2.Time 3.Employee managing 4.The pressure to other saler and farmer Service Quality s Control 1.Cost, Expense 2.Time for training 30. 5. What are the advantages and disadvantages of Starbucksdegree of vertical integration and channel expansion ? Advantages of channel integration Expansion to foreign country (Starbucks Coffee Internal Inc.)1.Selling for local food 2. Proper Decorate for local Starbucksretailer and architecture 31. 5. What are the advantages and disadvantagesof Starbucksdegree of vertical integration andchannel expansion ?3. Method to choose the Partnership & Country Method to choose the location for new starbucks shop Alliance with other company / business 32. 5. What are the advantages and disadvantages of Starbucksdegree of vertical integration and channel expansion ?Alliance with other company / businesssmith brother 33. 5. What are the advantages and disadvantages of Starbucksdegree of vertical integration and channel expansion ? Expand product line1. Frappuccino Group Frappuccino blended coffeeFrappuccino blended cream Frappuccino blended tea 34. 5. What are the advantages and disadvantages of Starbucksdegree of vertical integration and channel expansion ?Expand product line 2. Tea Line 3. Use the famous local law material in foreign country retail 35. 5. What are the advantages and disadvantages of Starbucksdegree of vertical integration and channel expansion ?High Speed Wireless internet Service 36. 5. What are the advantages and disadvantages of Starbucksdegree of vertical integration and channel expansion ?Disadvantages of channel integrationThe Risk (from Expansion to foreign country )1. Service Quality2. Brand Royalty , Attribute of Starbucks shop3. Low quality Partnership4. scramble with the customer groupAlliance with other company / business 1. Decision Limited 2. Quality of Product / Service 37. 5. What are the advantages and disadvantages of Starbucksdegree of vertical integration and channel expansion ? klDisadvantages of channel integration Expand product line 1.Attribute of Starbucks Product 2. Products Quality : Use the famous local law material inforeign country retail 38. 6. What should CEO do?1. Expansion to Global Channel2. Launch New Product Continuously 3. Expansion Production Base to other continent 39. 6. What should CEO do?4. Increasing Relationship with customer 5. Built high Standard to control quality all ofStarbucks shop 6. Expansion Product to Dinner food / Main food 7. Built the knowledge, culture, vision to NewCEO 40. Thank you forinterested in our Starbucks