ashish - starbucks

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StarbucksPresented by : Ashish Mittal

Roll No : BAN2010XMBA1P001Date : 13th July, 2011

ITM Executive Education Center, Bangalore


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Current Goals

Build an International Model Scale & Grow Profitably

Reach new customers with Seattles best Coffee

Optimize & grow US Retail Business

Elevate Partner Experience

Build World Class CPG Business

Accelerate in China ; CSR

Lead premium single cup category


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Presentation Outline

Introduction to Starbucks

Industry Overview

Company Overview

Site Analysis

Recommendations forImprovement

Focused Recommendation forImprovement

Final Action Plan Impact Analysis

Wrap Up


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Introduction to Starbucks

Company started in 1971 in Seattle,Washington

Grew from 55 stores in 1989 to over 2,200stores today

March 2011 marks Starbucks 40th

Anniversary Products sold include:

- beverages - pastries

- whole coffee beans - coffee-related retail items


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Industry Overview


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Industry Definition

Specialty Eatery Industry

Fits within the largest segment of disposable

income spending -- food and beverages

Steady growth in this segment in the 1990s has

led to an abundant number of new companies

As demand for convenience has made eatingout a normal routine, the demand for specialty

food services has increased in recent years


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Industry and Competitive

Analysis Market Structure

Monopolistic Competition

Competitive Activity Many companies are in the market and competition is fierce

Competitors use location, product mix, and store atmosphere

differentiation to establish market niche

I

ndustryC

osts andC

apital Structure Low to moderate costs for each location Major start-up expenditures are property and equipment

Major operating costs are labor and cost of sales


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Industry PEST Analysis

Political Influences Relationships between coffee producing nations and US

State &L

ocal government controls Economic Influences

Constant demand for food and beverages

Changes in disposable income could influence purchase levels

Social Influences Consumer preferences could shift from coffee to other beverages

Technological Influences Use of technology can improve operational efficiencies


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Company Overview


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Starbucks Corporate Strategy

Maximize market penetration

Provide a relaxing, attractive social

atmosphere

Offer high-quality products

Create a great working environmentAchieve profitability


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Starbucks SWOT Analysis

Strengths Largest market share in industry

Differentiated atmosphere

Weaknesses Aggressive expansion could lead to managerial / financial problems

Opportunities

Whole bean sales in supermarkets

Threats Lack of ownership of coffee farms can lead to price fluctuations


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Company Financial

Performance (2010 FY)


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Company Financial

Performance (2010 FY)


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Revenues Increased to a record of $10.7Billion

Operating Income increased by $857 Million to $1.4Billion

2010 Highest full year comparable sales growth

First ever dividend for shareholders

Offer special Cash Award to eligible partners inrecognition of their contribution to Starbucks strongperformance in 2010.

Quick Highlights


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http://moneycentral.msn.com/investor/invsub/results/state

mnt.aspx?symbol=SBUX


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Business Segments

The Frappuccinos

United States

Inernational

Global CPG

Seattles Best Coffee

Op Segment


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Retail Sales mix by product

type forCo operated stores


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Licensed stores by region:


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Performance Comparison

Graph


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MDA Fiscal 2011 View

Ahead


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Wrap-Up

Starbucks is the market leader in a growing

market segment

Starbucks is known world-wide for its high-quality food products and differentiated

Third Place atmosphere

The Wellesley location embodies the idealsof the corporate mission and has been very

profitable, but there are still opportunities

for improvement


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ashish - starbucks

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