2. HISTORY Jerry Baldwin, Zev Siegl, and Gordon Bowker--FOUNDERS OF STARBUCKS-1971 IT USED 2 BE A RETAILER HOWARD SCHULTZ STARTED HIS CAREER AS A SALESMAN IN SWEDISH KITCHENWARE 1982—HE BEGAN HIS JOURNEY WITH STARBUCK 1983-ON A BUSINESS TRIP TO MILAN—HE SAW AN EXPRESSO BAR WITH DIFFERENT CONCEPT
3. HISTORY HE LOVED IT----IT WAS A WARM COMMUNITY EXPERIENCE HE PROPOSED THE IDEA ------BOARD OF DIRECTORS REJECTED IT HE LEFT STARBUCKS & OPENED HIS OWN COFFEE BAR COMPANY—II GIORNALLE 1987—HOWARD BOUGHT STARBULKS FROM THAT TIME TO NOW ON STARBULKS IS MOST POPULAR COFFEE BRAND WORLDWIDE—FOR ITS FAMOUS FRESH BREWED COFFEE
4. COFFEE INDUSTRY ANALYSIS BASIC COFFEE SPECIALTY COFFEE---HIGHER QUALITY COFFEE GROWING IN 7% ANNUAL GROWTH RATE
5. COFFEE INDUSTRY ANALYSIS COFFEE SHOPS MAKE UP THE FASTEST GROWING PART OF THE RESTAURANT BUSINESS, CHECKING IN WITH A 7% ANNUAL GROWTH RATE! WORLD COFFEE PRODUCTION IS ESTIMATED AT 110 - 120 MILLION BAGS PER YEAR 14 BILLION ESPRESSO COFFEES ARE CONSUMED EACH YEAR IN ITALY, REACHING OVER 200,000 COFFEE BARS, AND STILL GROWING AMERICANS CONSUME 400 MILLION CUPS OF COFFEE PER DAY, OR EQUIVALENT TO 146,000,000,000 (146 BILLION) CUPS OF COFFEE PER YEAR; MAKING THE UNITED STATES THE LEADING CONSUMER OF COFFEE IN THE WORLD.
6. COFFEE INDUSTRY ANALYSIS THE NATIONAL COFFEE ASSOCIATION ESTIMATES THAT THE US COFFEE MARKET WILL REACH $29 BILLION IN 2011 STARBUCKS ALREADY HAS A PRESENCE IN CHINA, BUT THE INDIAN MARKET REMAINS LARGELY UNTAPPED. RECENTLY, STARBUCKS ENTERED INTO A PARTNERSHIP WITH TATA COFFEE ,THE NATION'S BIGGEST COFFEE PRODUCER TO HELP TAP THE COUNTRY WHERE COFFEE CONSUMPTION HAS INCREASED BY 89% IN THE PAST 13 YEARS. CURRENTLY ONLY 22% OF URBAN YOUTH GO TO CAFES, AND ACCORDING TO CAFE COFFEE DAY EXECUTIVES, THE INDIAN MARKET HAS THE POTENTIAL TO HOUSE UP TO 5,400 CAFES. CURRENTLY LESS THAN ONE-THIRD OF THOSE CAFES EXIST. .
7. CURRENT SCENARIO STARBUCKS IS THE LARGEST COFFEEHOUSE COMPANY IN THE WORLD, WITH 17,009 STORES IN 50 COUNTRIES, INCLUDING OVER 11,000 IN THE UNITED STATES, OVER 1000 IN CANADA, AND OVER 700 IN THE UK. STARBUCKS SELLS DRIP BREWED COFFEE, ESPRESSO-BASED HOT DRINKS, OTHER HOT AND COLD DRINKS, COFFEE BEANS, SALADS, HOT AND COLD SANDWICHES AND PANINI, PASTRIES, SNACKS, AND ITEMS SUCH AS MUGS AND TUMBLERS. SBUX.O $36.72 -0.14-0.38%
8. CURRENT SCENARIO THROUGH THE STARBUCKS ENTERTAINMENT DIVISION AND HEAR MUSIC BRAND, THE COMPANY ALSO MARKETS BOOKS, MUSIC AND FILM. STARBUCKS POSTED EARNINGS OF 399.3 MILLION OR $0.37 EPS, UP 86% COMPARED TO $199.4 MILLION FROM SAME QUARTER LAST YEAR. THIS FIGURE BEAT ANALYST ESTIMATES OF $0.32 EPS.[SALES ALSO ROSE 17% TO 2.8 BILLION AS COMPARABLE STORE SALES ADDED 8% IN DOMESTIC MARKETS.
10. PESTEL ANALYSIS POLITICAL- HIGH TARIFF AFFECTS STARBUCKS PRODUCTION,ABILITY TO SOURCING BEST COFFEE BEANS ECONOMICAL- 1.HIGHER EXCHANGE RATE---MOST OF SUPPLIERS OF STARBUCKS ARE EXTERNAL---RESULT=INCURRING HIGHER COST-- COFFE MAKING IS BEING EXPENSIVE WAYOUT---EXTRA COST TO CONSUMER?? OR MAKING LESS PROFIT??
11. PESTEL ANALYSIS 2.INCOME DISTRIBUTION OF CONSUMER— AFTER THE ECONOMIC CRISIS,2007 UNEMPLOYMENT FIGURES ROSE. PEOPLE WHO WERE ABLE TO CONSUME STARBUCKS’ EXPENSIVE SPECIALTY COFFEE NOW SAW IT AS A LUXURY IN SOME LOCATION. RESULT=SUDDEN DROP IN SALES VOLUME,2009
12. PESTEL ANALYSIS SOCIAL ISSUE- 1.CHANGING TASTE—USA IS CONSUMING MORE SPECIALTY COFFEE—IMPORT OF 1.3 BILLION IN 2010 INDIA ,CHINA---PEOPLE PREFER TEA. SO DIFFICULTY IN IMPLEMENTATION OF STRATEGY-AMERICANISATION IN DEVELOPING COUNTRIES. 2.HEALTH CONSCIOUSNESS- NEED TO INTRODUCE NEW HEALTHY ALTERNATIVES NORTH AMERICANS ARE REPLACING ALCHOHOL WITH COFFEE 3.COFFEE BARS—A PLACE FOR MEETING,A PLACE OF RECREATION
13. PESTEL ANALYSIS TECHONOLOGY— STARBUCKS FOR PROMOTING BAND GLOBALLY—USING SOCIAL NETWORKING SITES IMPLEMENTED NEW PHONE PAYMENT SYSTEM STARBUCKS CARD—ONLINE PAYMENT—IT ALSO HELPS TO INCREASE CUSTOMER LOYALITY
14. PESTEL ANALYSIS ENVIRONMENTAL- COFFEE HARVES IS DEPENDENT ON WEATHER CONDITIONS,HEALTH OF COFFEE TREES,HARVESTING PRACTICES,DISEASE AND INFECTION CAUSED BY INSECTS
15. OPPORTUNITIES AND THREAT-- OPPORTUNITIES--- ENTRY INTO NEW MARKETS GROWTH IN COFFEE MARKET THREATS— COMPETITION WITH MCDONALD, CARIBOU COFFEE AND PEET'S COFFEE IN THE BROADER MARKET FOR SPECIALTY COFFEE. THEY ARE SELLING GOOD COFFEE FOR BETTER VALUE PREVIOUSLY-SECOND CUP---GROWTH OF SECOND CUP WAS A HEADACHE.
16. INTERNAL ANALYSISSTRENGTH AND WEAKNESS-- STRENGHTH— 1.BRAND IMAGE 2.STRATEGY TO CAPTURE KEY LOCATIONS AND OPENING STORES 3.ROASTING TECHNOLOGY 4.VALUED AND MOTIVATED PARTNERS[EMPLYEES]
17. INTERNAL ANALYSISSTRENGTH AND WEAKNESS-- WEAKNESS— 1.AGGRESSIVE EXPANSION WITHOUT PROPER INFRASTRUCTURE– IS STARBUCKS THERE?? ANS—NO RESULT=PUT A STARBUCKS THERE. QUESTION ARISES-----QUALITY VS VOLUME 2.STARBUCKS HAS NOT FOCUSED ON ITS PRODUCT DIFFERENTIATION OBJECTIVES 3.PROBLEM IN DISTRIBUTION CHANNEL- STARBUCKS HAS CHARGED THAT KRAFT'S ALLEGED NEGLECT AND MISMANAGEMENT OF THE BUSINESS -- WHICH BRINGS IN ABOUT $500 MILLION IN ANNUAL SALES. THE WORLD'S BIGGEST COFFEE CHAIN WANTS TO END THE PARTNERSHIP ON MARCH 1 AND REPLACE KRAFT WITH PRIVATELY HELD ACOSTA INC.
19. COMPETENCIES OF STARBUCKS-- ROASTING TECHNOLOGY VALVE TECHNOLOGY VALUE AND MOTIVATED PARTNERS REAL ESTATE APPROACH BAND IMAGE QUALITY EFFICIENT SUPPLY CHAIN SYSTEM
21. Marketing strategy THE GLOBAL ECONOMY CONTINUES ITS RECOVERY, STARBUCKS IS PLANNING TO OPEN AN AVERAGE OF MORE THAN ONE STORE EACH DAY. ACQUISITION- APRIL 2003, STARBUCKS COMPLETED THE PURCHASE OF SEATTLE'S BEST COFFEE AND TORREFAZIONE ITALIA FROM AFC ENTERPRISES 1998-tazo tea company ; 1999-hear music;2008-clover PARTNERSHIP- UNITED AIRLINES NORDSTORM BARNES AND NOBLE BOOK STORE
22. Marketing strategy PEPSICO PRICECOSTCO RED HOOK BREWERIES DREYER’S ICE CREAM ARAMARK APPLE TATA COFFEE Acosta Inc
24. RESULT OF SWOT ANALYSIS-- 1.STARBUCKS AGGRESSIVE GROWTH STRATEGY HAS MADE IT DIFFICULT TO DELIVER CONSISTENTLY HIGH QUALITY PRODUCTS AND SUPERIOR CUSTOMER SERVICE WORLDWIDE. 2.STARBUCKS NEEDS TO REFOCUS ON THE PRODUCT DIFFERENTIATION STRATEGY RATHER THAN EXPANDING. 3.MARKET PENETRATION WILL NOT BE A PROBLEM IF STARBUCKS CREATES PROPER INFRASTRACTURE GLOBALLY.
