Business analysis powerpoint presentation for Walmart
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ProjectStarbucks-Presentation.pptx
Analysis of the managerial structure of the food and beverage industry
with respect to both its financial and marketing strategies:
Example of Starbucks
By
Franck Yao
1
- Analysis of the mission statement - Analysis of the vision statement
Mission “to inspire and nurture the human spirit – one person, one cup and one neighborhood at a time.”
Vision “to establish Starbucks as the premier purveyor of the finest coffee in the world while maintaining our uncompromising principles while we grow.”
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1.
The Beginnings.
The Heritage Behind the Brand
1971, Single Store in Pikes Place Market
Howard Shultz steps into store for the first time in 1981. Joins a year later.
The name, inspired by Moby Dick, evoked the romance of the high seas and the seafaring tradition of early coffee traders.
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Original Inspiration
European
Coffee
House
Culture
“coffee as art”
Café Florian in Venice, Italy
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1.
The Starbucks Story & Growth.
1970’s-1980’s
1971-1976 Only sold roasted whole bean coffee
Green coffee beans during this time were purchased from Peet’s
1982 Schultz, joins Starbucks in marketing & operations
1983 Schultz travels to Italy- coffeehouse culture
1984 Convinces Starbucks to test coffeehouse concept
1984 Original owners became partners at Peet’s because of the increase consumption of specialty coffee
1985 Founds Il Giornale offering coffee and espresso beverages
1986 Six stores in Seattle
1987 Il Giornale acquires Starbucks. Schultz assumes command over Starbucks brand.
Begins connecting to their customers
Enter into a 5 year non compete agreement with Peet’s
1988 Astounding $10 million dollars in
revenue, or 45% increase.
1989 Starbucks was roasting over 2 million
pounds in coffee
Wow!!
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1990’s
1991 First privately held company to offer a stock option program
Opens first airport store at Seattle International Airport
1992 Starbucks goes public being traded on NASDAQ as SBUX
Over 140 store fronts in the US
1994 Starbucks starts selling CDs in store
1995 Introduces Frappuccino®
1996 established first store out of North America in Tokyo, Japan & partnership with Pepsi
1997 1,142 Store locations
1998 $1.3 billion in revenue 1999 1200 stores and purchase of “Hear Music” and Tazo Tea
2000-2007
2000 Schultz steps down from CEO to chairman and Orin Smith steps in as CEO
2001 Introduction of Starbucks Card
4,709 Stores
2003 Acquires Seattle Coffee Company
Per store annual sales was an average of $900,000 and new offerings of food, books, movies and music
2004 Light or “skinny” versions became available
8,569 Store!
Opened alliances within airports and other facilities such as Target
2005 Jim Donald CEO
Acquires Ethos Water
2006 Opened stores in Brazil and Egypt
Started selling their line of licensed products in grocery stores
12,440
2007 $9.4 billion in worldwide revenue
2009-Present
2009 Starbucks focuses efforts in the community and starts gaining a “conscience” among humanitarian and conservationist efforts
2012 Expansions. New plan to open over 1,000 new locations and largest Starbucks opens on University of Alabama campus
2013 Starbucks opens first location in Colombia & announces many more Colombian locations to arise
Today more than 20,000 locations worldwide in 62 countries
http://www.starbucks.com/about-us/our-heritage
Schultz, Howard. "How Starbucks Got Its Mojo Back." Newsweek157.12 (2011): 50-55. Academic Search Elite. Web. 2 Nov. 2013
3.
Fact Sheet.
Facts
Type Public
Industry Restaurants (Genre- Coffeehouse)
Founded Pike Place Market in Seattle, Washington (March 30, 1971)
Founder(s) Jerry Baldwin, Gordon Bowker, Zev Siegl
Headquarters Seattle, Washington, U.S.
Area served Worldwide
Key people Howard Schultz (Chairperson, President and CEO)
Facts
Revenue Increase $ 26.5billion (2019)
Operating
Income Increase $ 17.5 billion (2019)
Net income Increase $ 6.38 billion (2019)
Total assets Increase $ 8.21 billion (2019)
Total equity Increase $ 5.10 billion (2019)
Employees 182,000 (2019)
Brands: Starbucks Coffee Company, Ethos water, Evolution Fresh, Hear Music, La Boulange Bakery, Seattle's Best Coffee, Tazo , Teavana, Torrefazione Italia
Starbucks Corporation 2011 Annual Report, Form 10-K, Filing Date Nov 18, 2011". secdatabase.com.
Locations
Number of locations 19,767 in 62 countries (March 22, 2020)
Newest Location: Store set to open in Bogota, Columbia in 2019
"Loxcel Starbucks Map". Starbucks. March 22, 2020.
4.
SWOT Analysis.
Strengths
Brand equity
Strong customer connect
Expanding operating margin
Focus on employee relationships
Company with a conscience
Corporate Conscience
C.A.F.E. (Coffee and Farmer Equity)
Promote high quality and socially responsible collective coffee
http://globalassets.starbucks.com/
Weaknesses
Overdependence on the U.S. market
Aggressive expansion
Pressure from Wall Street
Brand viewed as pretentious
Opportunities
Entry into health and food markets
Growing international presence
India, Asia and other growing markets
Threats
Growing competition
Rising commodity costs
Sustaining growth
Fading impact of word-of-mouth advertising
Legal proceedings
MarketLine Revenue Analysis
GlobalData Financial and Strategic Analysis Review
"Starbucks Coffee Company in the 21st Century" case study by Nancy F. Koehn, Marya Besharov and Katherine Miller
5.
The Coffee Wars.
Coffee Wars
Starbucks declines in the 2000s, leading heavier competition with Dunkin' Donuts (DD) and McDonald's (McD) despite Schultz's "pain" in his company being compared with fast-food restaurants.
Economic recession + rising prices for food commodities (which were at an all-time high in 2008) caused Starbucks to increase their prices, which pushed consumers to DD or McD.
Coffee Wars
Starbucks tests drive-through windows and introduces breakfast sandwiches to their menu.
McD added espresso and flavored coffee to its menu, which it marketed as "specialty coffee," and sold for 60 cents cheaper than Starbucks.
Starbucks began using television commercials in November of 2007.
Coffee Wars
McD created "UnsnobbyCoffee.com" and billboard advertisements in Seattle that said "Four bucks [for espresso] is dumb.”
Schultz was reinstated as CEO of Starbucks, and re-focuses on educational and artful coffee experience and customer service
Focus on EDUCATIONAL
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http://www.youtube.com/watch?v=r2y_GwKzxck
Marketing Controversy
Starbucks has been accused of:
Driving out small independent competitors
Intentionally operating at a loss
Saturating the market (clustering several locations in small geographic area)
Klein, N. (2001). No Logo New York: Flamingo, pp. 135–140
"Store Wars: Cappuccino Kings". BBC News. June 9, 2004.
Wander, Jonathan (March 2010). "Ken Zeff". Pittsburgh Magazine.
6.
How is Tech helping Starbucks ?
2017 Coffee Consumer Trends Reports June 20, 2017 HIGHLIGHTS
83% of Americans had one coffee/espresso drink in the past year (up 5%)
63% of American adults consume coffee daily (same as 2012)
75% of American adults consume coffee weekly (up slightly)
76% of Hispanic-Americans drink coffee daily (up 13%)
12% of American Adults own single-serving coffee (up significantly from 2012)
81% of American adults aware of single serving coffee (up significantly from 2012)
Consumer Ages:
18-24 at 41% (down 9%)
60+ at 76% (up 5%)
January 2013
7.
Marketing Tactics.
In class we were talking about how it is hard establish a real strategy when current markets seem to be in a state on constant flux. So these are the tactics we analyzed. We feel that these tactics are on track because, learning from their mistakes, these initiatives are coffee-centered.
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Tweet-A-Coffee
http://www.washingtonpost.com/
(As of October 2013)
Tweet a Coffee
Allows Starbucks to collect User info
Less Friction in Starbucks Sales
A+++
So basically, in the process of tweeting a coffee, you can potentially tell Starbucks who you are, where you live, who your friends are, what coffee you drink, and which Starbucks locations you visit or don’t visit.
As we learned this is virtually FREE PRIMARY INFORMATION
They are reaching million of people since they have the largest twitter following.
With give this an A+++
Because I hardly costs anything
And if its way too “faddy” who cares!!! Look at at all the primary Information you’re getting!
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Starbucks Evening
(As of January 2015)
Customers want more options to relax in store in the evening
Selected locations only
Special menu 4pm-close. Includes beer, wine, appetizers
“Less hurried atmosphere perfect for winding down.”
Modeled after European coffeehouses that evolve with the time of day
Live music and poetry reading
B+
Low risk because they are operate out of Normal starbucks stores. If they are unpopular, they just take the sign off the door that says “evening” and return it to normal
a Starbucks.
B+
Appeals to young urban professionals, “weeknight hang”
True to original inspiration of European
Can maintain educational, artful atmosphere
November 2013 Los Angelus Airport: still serves small plates of European inspired foods.
Risk: Not about just coffee, Makes the starbucks brand more more complex
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Starbucks Train Car
(As November 2017)
Zurich, Switzerland
Seats 50 People
Specifically designed for the locale
http://news.starbucks.com/news/
Starbucks opened first store in Europe 11 years ago in Switzerland
B+
+Maintains the ambiance of affluence
+Specifically designed for the locale, so it will feel local
Not a cozy coffee house, it’s a moving, bustling, train with time limits.
Is this an educational relaxed coffeehouse?
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My Starbucks Rewards
2009, loyalty card program established
2013, opened to reward Starbucks brand groceries and Teavana purchases
Works in Conjunction with the App that lets you scan to pay and win rewards
In July 2013, 10% of store sales were made using the app.
"Mobile Payment At U.S. Starbucks Locations Crosses 10% As More Stores Get Wireless Charging"
A-
Builds loyalty. Let’s ask Arika.
We give this a A. Simply because we have learned to be cautious with all kinds of “cards.” from the mistakes and warnings of our mothers. Plus grocery store means one more step in the checking out process. We are lazy. That’s also why “levels” turns us off. Is it faddy.
But 10%!!! $$$$$
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Consistent Fortune Magazine Rankings
Reason Cited:
1. Employees of the company were offered stock rewards for working 20 hours/week
2. "There is potential for anyone to move up the ladder."
http://money.cnn.com/magazines/fortune/best-companies/2013/snapshots/94.html?iid=bc_lp_arrow1
A+
You can’t go wrong when you are considered a great company to work for and support.
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“The way ‘I’ see it…”
After my analysis, I have come to the conclusion that the Starbucks brand will thrive in future if:
Continued participation in the health and wellness markets: transparency with ingredients and processes.
Strong presence in and advocate for humanitarian and conservationist efforts. Make themselves a brand with a conscience worth supporting.
Protecting the unique identity of each Starbucks store, to avoid the “big chain” feel and to preserve the “artful and educational coffee ambiance ” at home in each locale.
Gain prestige via corporate culture rankings.
In class we were talking about how it is hard establish a real strategy when current markets seem to be in a state of constant flux. Here’s what we think…
#2 Especially since it will benefit Latin Americans coffee farmers. Be PRO-Latin American 76% of Hispanic-Americans drink coffee daily (up 13%)
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“The road is paved with so many companies that have lost their way through thinking that they can be all things to all people.
The strength of Starbucks brand and the success of our company is linked to focus and discipline. We’ll continue to be a coffee company.
That’s who we are.”
-Howard Shultz, CEO
We want to close with the words of this CEO
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