Starbucks has over 9,000 stores worldwide selling coffee, tea and other beverages and food items. Their strategy focuses on rapid expansion, both domestically and internationally. They emphasize employee training and store design. Starbucks also pursues strategic coffee purchasing and promotes fair trade and sustainability. Political, economic, social and technological factors are considered in Starbucks' PEST analysis.
2. Overview
Established in 1971 at Seattle, Washington
Famous for its quality fresh-roasted coffee beans
and stylish atmosphere.
Over 9,000 stores worldwide
Product lines include :
− beverages (coffee, Tazo tea, soda, juices)
− pastries
− whole coffee beans
− coffee-related hardware and equipment
− merchandise (mug, CDs)
3. Starbucks’ Strategy
Rapid store expansion strategy
• Domestic store expansion
• International store expansion
• Employee Training and Recognition
• Real Estate, Store Design, Planning, and Construction
• Store ambience
Product Line
Coffee purchasing strategy
4. Starbucks’ Strategy
Rapid store expansion strategy
• Domestic store expansion
− A three-year expansion strategy
− “Starbucks everywhere” approach
• International store expansion
− Company-owned and company-operated stores or licensing
− Created a new subsidiary, Starbucks Coffee International
− Expanded its consumer products channel in South Pacific region
5. Starbucks’ Strategy
• Employee Training and Recognition
− Systems to recruit, hire and train baristas and
store managers
screening
training programs
awards for partners
• Real Estate, Store Design, Planning, and Construction
− A broad range of store formats (the right image and character)
− A “stores of the future” project team
− High-traffic, high-visibility store locations
− Control of average store opening costs
− Wi-Fi availability at stores
6. Starbucks’ Strategy
• Store ambience
− The concept of “everything matters”
− Assessment of standards
7. Starbucks’ Strategy
Product Line
•Wide range of products choices
•Special product promotion
•Selling music CDs
•Joint ventures
PepsiCo
Dreyer’s Grand Ice Cream
Jim Beam Brands
•Acquisitions
Hear Music
Ethos Water
•Starbucks Cards
•Partnership with Bank One
8. Starbucks’ Strategy
Coffee purchasing strategy
• Building relationship with growers and exporters, checking on
agricultural conditions and crop yields, and searching out varieties
and sources that would meet Starbucks’ standards.
• Using fixed-price purchase commitment and purchasing coffee
future contracts
• Contributing to the sustainability of coffee growers and helping
environment conservation
• Purchasing and marketing Fair Trade Certified coffee
• Promoting coffee cultivation methods that protected biodiversity and
maintained a healthy environment
9. PEST Analysis
Political Influences
− Relationships between U.S. and countries producing coffee
beans
− Environmental regulations
− Industry-specific regulations
Economic Influences
− Demand for food and beverages
− Customers’ buying power
− Exchange rate & taxation
10. PEST Analysis
Social Influences
− Trend
− Consumer preferences
− Changes in lifestyle and occupation
− Education
Technological Influences
− advances in manufacture
− biotech and agricultural development
− IT developments
Editor's Notes
3 year : favorable demographic profile, could be serviced and supported by the company’s operations infrastructure Everywhere : cut down on delivery & management costs, shortened customer lines at individual stores, increased foot traffic for all stores in an area. Expand: sell Frappucino in Japan, Taiwan and South Korea
3 year : favorable demographic profile, could be serviced and supported by the company’s operations infrastructure Everywhere : cut down on delivery & management costs, shortened customer lines at individual stores, increased foot traffic for all stores in an area. Expand: sell Frappucino in Japan, Taiwan and South Korea
3 year : favorable demographic profile, could be serviced and supported by the company’s operations infrastructure Everywhere : cut down on delivery & management costs, shortened customer lines at individual stores, increased foot traffic for all stores in an area. Expand: sell Frappucino in Japan, Taiwan and South Korea
3 year : favorable demographic profile, could be serviced and supported by the company’s operations infrastructure Everywhere : cut down on delivery & management costs, shortened customer lines at individual stores, increased foot traffic for all stores in an area. Expand: sell Frappucino in Japan, Taiwan and South Korea
3 year : favorable demographic profile, could be serviced and supported by the company’s operations infrastructure Everywhere : cut down on delivery & management costs, shortened customer lines at individual stores, increased foot traffic for all stores in an area. Expand: sell Frappucino in Japan, Taiwan and South Korea
Sourcing from multi geographic areas to find wide ranges of coffee varieties. Fixed : limit exposure to price fluctuation Future : provide price protection Sustainability : 3-5 years contracts, reward the farmers with financial incentives and preferred supplier status