Starbucks Case Study
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Starbucks Case Study
- 1. Abigail Kahl, Robert Padgett, James Smith, Lindsey Beck, Peter Hansen
- 2. • Founded 1971-Seattle WA • Specialty Eatery-Coffee and Snacks Store • Premier Roaster – Marketer and Retailer • 21,368 Stores + 182,000 Employees + • 62 Countries “To inspire and nurture the human spirit – one person, one cup and one neighborhood at a time.” – Starbucks
- 3. 13 Locations in Tallahassee as of 2014
- 4. • Tea’s • Fresh Food • Various hot/cold beverages
- 5. Teavana, Taza, Seattle’s Best, VIA, Refreshers, Evolution Fresh, La Boulange and Verisomo
- 6. Starbucks Opens It’s First Store 1971-Seattle WA
- 7. • Market expansion--- Started with 9 Stores • 2000 – Schultz relinquished as CEO (stayed Chairman) • Orin Smith became CEO & retired in 2005 • Jim Donald became CEO with long term objective of 40,000 stores worldwide • 2007- Stores opening at rate of 6 per day
- 8. Starbucks closed over stores in a 5 year period
- 9. Revamp the leadership by changing roles. Closed 900 underperforming stores
- 11. Weakness: Muscles out the little guy Strengths: 3 Billion in Income
- 15. • Research to inform the brand • Executive introspection • Invest in employees and community • Innovate and re-invent
- 16. “If not checked, success has a way of covering up small failures.” - Howard Schultz • New espresso machines • Neighborhood feel • Flavor locked packaging • Store’s streamlined design • Return to the heritage, tradition and passion
- 17. 91% APPROVAL
- 18. 2012 •NO. 73 ON FORTUNE’S IN 2012 2013 •NO.94 ON FORTUNES IN 2013 2014 •NOT RANKED IN 2014 ? •BARISTA OVERWORKED ?
- 19. 12,000 stores in the US 7,500 stores in the US 14,250 stores in the US
- 20. • New York = 972 0f 1700 are small shops • Community Relationship • Offer Customer Memberships through “cups”- Consume Unlimited Basic Tea & Coffee • $ 45 per month
- 21. • Established Brand Power & Loyalty • Making a connection with the community • Starbuck App for Ordering • Adding a delivery option in select areas (2015) • Shifting Focus – Afternoon Sales vs. Morning Sales • Set Apart by Customer Service & Store Quality
- 23. I would give my first born for a STARBUCKS right about now! STARBUCKS is better and I deserve it!
- 24. The Right Customer and The right Market Product Versioning & Price Communication Value Based Pricing to Boost Margins
- 25. • Current Plan • Satisfied Customer to Loyal Customer
Editor's Notes
- JS SLIDES
- Strengths: they are an industry leader. In 2014 they reported income of $3 billion Weaknesses: bad PR: they are known for destroying mom and pop coffee shops Threats: intense competition, agricultural problem, and economic woes Opportunities: drive thrus, lunch items, and serving beer and wine at night
- With a good percentage of the public focusing on shopping local, small businesses can chip away Starbucks’ market share. This can be a problem if left unchecked. Typically mom and pop shops can offer high quality items that differentiates themselves from Starbucks in such away that it siphons off customers. Traditionally, Starbucks’ has used its purchasing power as a weapon. This has had a negative drawback….bad PR
- With that being said, local businesses need not be targeted for destruction. They can become partners. In the same manner that Inbev has dealt with the craft beer movement, Starbucks should offer local roasters access to Starbucks’ distribution stream and supply chain. This would allow Starbucks to offer its customers local flavors from local roasters without the PR issues of muscling out small businesses.
- For Starbucks within the category of special eateries, we looked at the market from the customer’s point of view Thusly, this competitive analysis chart illustrates the strengths and weaknesses of Starbucks’ and its main competitors. Although the comparisons are subjective they can point to clues for reasons for success….as Robert will discuss branding issues
- AB’S SLIDES PROBLEMS AND SOLUTIONS
- BZ slides
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