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Strategic management

Case study: Starbucks

Coordinator
Prof.Dr. univ. : Bacanu Bogdan

Student: Copaceanu Timeea

Brasov
2016
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Table of contents:
1. Company presentation (short history and a general presentation)
1.1 Starbuck in Romania
2. Competition
2.1Romanian competition
3. Products and Services
4. Customers
5. Promotion and promotional means
6. Human resources management
7. Financial analisis
8. The organizational structure
9. Social Responsibility
10.Strategies
10.1 Product Strategy
10.2 Store/ Retail Strategy: Third Place
10.3 Manufacture Strategy
10.4 Pricing Strategy
10.5 Service Strategy
10.6 Marketing Communication Strategy
10.7 International Business Strategy
11.The SWOT analysis
12.Conclusions(Recommendations)

1.Company presentation
Starbucks originally started in 1971 by Jerry Balswin, Gordon Bowker, and Zev Siegl, with
it's first shop located in Seattle's historic Pike Place Market. From this location, Starbucks sold
high-quality whole coffee beans, dark-roasted in small batches, the European way.
The name of Starbucks was chosen in honor of the coffee-loving first mate in Herman
Melville's Moby Dick, and, because they thought the name evoked the romance of the high seas
and the seafaring tradition of the early coffee traders. The current company logo, is a twintailed siren, from Greek mythology, encircled by the store's name.
In 1982, Howard Schultz, the now celebrated CEO of Starbucks, joined as director of
retail operations and marketing. Two years later, Mr. Schultz convinced the founders of
Starbucks to test the coffeehouse concepts in their downtown Seattle store, where the first
Starbucks Caffe Latte was served.
In 1987, Howard Schultz led a group of investors that purchased Starbucks from its'
founders. Since then, Starbucks has become the premier roaster and specialty coffee retailer in
the world. Currently, there are 18,000 stores in 62 countries.
Along with selling high quality coffee beans, Starbucks offers a variety of speciality
coffee drinks, teas, hot chocolate, merchandise and a limited menu selection of food items.
Their stores offer a clean, relaxing atmosphere with free wi-fi for customers.

1.1 Starbucks in Romania


Starbucks open his first store in Romania in 2007 in Bucharest because then Bucharest
was an ideal location for Starbucks to entry into Central and Eastern Europe. The company,
with 12 cafes in Romania, generated a healthy profit from 2014 - 1.5 million, almost double the
previous year. In 2013 the company generated net profit of 842,000 euros.
In the present the company has 11 units on the Romanian market but they plan to reach
30-35 units in the next 5 years.
Starbucks was the brand which led cafs/bars sales in 2014 with a 1% value share of this
very fragmented category. Romanian consumers, especially young ones, tend to embrace the
products and services of strong global brands with high awareness. The same thing is
happening with Starbucks, which for many customers is equivalent with specialist coffee shops.
Eight out of the 12 existing outlets were present in Bucharest, the main centre of Romanian
foodservice, and the other four in other important cities: Cluj-Napoca, Timisoara, Constanta
and Iasi. Every new opening of Starbucks created a lot of buzz and interest, which was visible in
the consolidated position of the brand in cafs/bars.

2. Competition
In the last few years, Starbucks has entered into a battle, fighting Dunkin' Donuts and
McDonald's for the top position as coffee king. Customer desire and preference greatly
influence the fight, so each company is fighting to expand menu options and physical store
locations to reach and better serve a greater customer base and draw consumers away from
the competition.
Starbucks began 30 years ago with one store and has experienced phenomenal growth
and success. It is often considered the go-to coffee place to work and socialize, a concept that
corresponds with the company's marketing approach. From development, Starbucks has aimed
at creating a place for consumers to stop between work and home, and formed concepts for
physical locations that provide customers a relaxed atmosphere and overall experience. The
tactic has had great success, reflected by Starbucks' 2015 revenue of nearly $18.5 billion.
1) Dunkin' Donuts
Dunkin' Donuts peacefully coincided with Starbucks for decades. When the spokesman
for its initial donut-focused ad campaign retired in the late 1990s, Dunkin' began putting more
emphasis on the growth of its coffee business. The company introduced its first specialty
coffees and drinks in the early 2000s and slowly began making a name for itself as more of a
destination coffee shop. In 2006, Dunkin' upped the ante and declared war against Starbucks.
The company has continued to expand its menu, augmenting its product line with more
substantial food items.
Dunkin' Donuts launched its "America runs on Dunkin" ad campaign in 2006, part of its
new approach to marketing. Where Starbucks has a more wealthy and upscale feel, relying on
word of mouth to spread its name, Dunkin' Donuts approaches customers with traditional
advertisements, representing itself as a brand for all-American consumers. The tactic has
worked around the world, though the company's 2015 revenue of $783 million for 2015 falls
substantially behind Starbucks'.
2) McDonalds
At over $26 billion, McDonalds revenue for 2015 was higher than Starbucks' and
significantly higher than Dunkin' Donuts. However, this is due in part to the fact that
McDonald's has a much larger menu. McDonald's has traditionally been known as a fast food
restaurant and is not well-known for its coffee. However, after introducing flavored and iced
coffees in the mid-2000s, McDonald's put its hat in the ring alongside Starbucks and Dunkin'
Donuts.
McDonald's is also revamping its marketing and advertising strategies. The company has
been using the "I'm lovin' it" slogan for more than 10 years, but the company recently found
that the campaign was not trending as well as it had in its initial years. For the past several
years, McDonalds has employed research and development (R&D) specialists of various ethnic
and experience backgrounds. New commercials and advertisements rolling out in the coming
year will fall in line with Dunkin' Donuts' approach, pushing McDonald's as a brand for the
common American with emphasis placed on embracing people of every educational and
cultural background.
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The Retail Coffee Game


Starbucks, Dunkin' Donuts and, recently, McDonald's compete for customers in terms of
dry coffee goods as well. All three companies offer coffee beans and ground coffee in retail and
grocery stores around the world. Thus, two companies that are known for such products,
Maxwell House and Folgers, have become competition for Starbucks as well. Maxwell House is
one of the top-selling lines
Kraft Corporation offers, and it is one of the best-selling coffee brands; Folgers is not far
behind. While these two brands currently dominate the dry coffee goods market, they are not
in complete competition with Starbucks due to their lack of physical stores and additional
product offerings.

2.1Romanian competition
In Romania the first competitor of Starbucks is McDonald. Starbucks and
McDonalds are in different businesses. In marketing theory, that is.
Starbucks is known for its coffee and lattes, McDonalds is known for its hamburgers
and fries.
But there are overlaps. In practice, that is.Starbucks is also selling all
sorts of breakfast and lunch items together with coffee and Lattes. McDonalds is also
selling coffee and Lattes in its McCafes, which are usually side by side with traditional
McDonalds stores. Better and less expensive Lattes, in my opinion.
McDonald's "huge" burger that feeds daily aproximetly 140,000 Romanian, more
than any other restaurant brand in the country. The company was launched - in December
2010, when it first opened McCafe in Romania - in a campaign of occupation of the local
market with cafes that sell beverages like coffee that Starbucks has brought to the fore.
Currently, there are six McDonald's that is integrated and McCafe concept.
As an aside, in its mission to transform Starbucks into a global power, Howard
Schultz, former president of the company, noted the Brand ubiquitous that it now declares
2000 as Starbucks seeks to become a "McDonald's coffee." He came close. In the last decade
increased from 100 to over 20,000 coffee shops in 60 countries. But McDonald's has stood
still and spotted including coffee consumer dollars 3-4. In 2005, McDonald's launched
internationally, the concept of "coffee that experience." Consumers liked the "experience"
offered by McDonald's and coffee sales fast-food chain increased numbers of "two digits",
according to representatives of McDonald's beverage division.
Locally, McCafe -I is "about 7% of the turnover of a restaurant we will achieve its
leading position in the segment cafes", is convinced Daniel Boaje, head of McDonald's
Romania.
The speed with which open McDonald's coffee is not good news for Starbucks. McDonald's,
which has 65 restaurants in Romania, has already become a serious competitor to Starbucks,
especially because of the difficult times now i have made consumers take into account the
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price. Plus, in recent years of crisis, Starbucks seemed more focused on keeping up with
demand than on expansion. Moreover, Starbucks Liberty Center was closed in 2009 after only
one year since its inauguration in the commercial center in southern Bucharest. "Considering
the current economic context and the evolution of Starbucks market in Romania, we decided to
reconsider our presence in this market to convey brand values Starbucks in the most efficient
manner," said then Yannis Kalfakakos, general manager of Marinopoulos Coffee Company,
operator Starbucks cafes in the local market. Starbucks has not answered the capital question
about his plans in Romania and informed the employees that "we will focus again on the
Starbucks Experience, we will create a level renewed differentiation and separation, significant
market between us and others who are trying to sell coffee ". And there are enough
competitors, among them City Cafe, Turabo Cafe, Gloria Jean's, Costa Coffee or Cafepedia.

3.Product and services

Starbucks supplies consumers with a delicious variety of coffee and tea products. They
also sell equipment from well known manufacturers such as Bunn, Krupps and more. They have
drinkware for the consumer and many gifts available for purchase. They not only have coffee,
tea and equipment for the home buyer, but they sell for the office as well.
Starbucks also has physical stores where you can go in and purchase coffee, tea, hot
chocolate, pastries and other coffee accessories.

4. Suppliers and customers


The main customers of the Starbucks:
Adults
Starbucks primary target market is men and women aged 25 to 40. They account for
almost half (49 percent) of its total business. Starbucks appeal to this consumer age group
through hip, contemporary design that is consistent in its advertising and decor, and working to
keep its products current as status symbols. Customers tend to be urbanites with relatively high
income, professional careers and a focus on social welfare. This target audience grows at a rate
of 3 percent annually.
Young Adults
Young adults, aged 18 to 24, total 40 percent of Starbucks sales. Starbucks positions
itself as a place college students can hang out, study, write term papers and meet people.
Starbucks appeals to this consumer directly through introducing technology as soon as it comes
available, focusing on social networking and actively cultivating a cool image. The young adult
audience grows 4.6 percent each year.

Kids and Teens


Kids and teens are also a large part of Starbucks target audience. Together, customers
age 13 to 17 account for just 2 percent of Starbucks sales, but most items for kids are
purchased by the parents. Whether the focus is on the steamed milk that Starbucks baristas
refer to as babyccinos or the sugary, caffeinated, whipped cream topped coffee drinks that
are so popular with teenagers, kids and teens form a large part of Starbucks business. Kids go
there with their parents; both mother and child leave with cup in hand. Teens meanwhile use
Starbucks as a place to hang out with friends or study. Starbucks may not cater directly to kids
(and risk criticism about the high calorie and caffeine content of some of its drinks) but it does
make its products kid-friendly, offering special child sizes for instance.
Complimentary Products
Specialty coffee drinks account for around 75 percent of Starbucks sales, but an
increasing amount of its business is centered on selling whole bean coffees and merchandise.
Starbucks has made its coffees available for direct order online, in supermarkets and offered
select food service outlets the chance to carry Starbucks family of coffee, including Starbucks
brand, Seattles Best and Starbucks VIA. These products give consumers a chance to have the
Starbucks experience at home, and it is an area that Starbucks is pushing.

5.Promotion and promotional means

Starbucks Coffees Promotions


Starbucks promotes its products mainly through advertising. This component of the
marketing mix refers to the communication strategies used to disseminate information about
the firm and its products. Starbucks promotional mix is as follows:
1)Advertising
2)Public relations
3)Sales promotions
The company advertises its products through television, print media and the Internet.
The company infrequently uses public relations, which has not always been successful for the
business. For example, Starbucks Race Together public relations campaign was widely
criticized. In addition, the firm uses sales promotions, such as the Starbucks Card that
customers can use to get freebies. This part of Starbucks marketing mix shows the core
significance of advertising, and the supporting roles of public relations and sales promotions for
the company.

Starbucks Coffees Prices and Pricing Strategy


Starbucks uses a premium pricing strategy. This pricing strategy takes advantage of the
behavioral tendency of people to purchase more expensive products on the basis of the
perceived correlation between high price and high value. The companys coffee products are
more expensive than most competing products, such as McDonalds Premium Roast. Through
this pricing strategy, the company maintains its high-end specialty image. This part of Starbucks
Coffees marketing mix directly relates with the firms generic strategy, thereby helping the
business maintain its premium brand image.

6. Human resources management


The Starbucks Corporation sees its employees as a key part of its view of itself as a
business serving the community; its employees are vital for its growth, helping the business
grow and thrive. To work at Starbucks is much like working with friends, its website claims; the
company understands appreciates, respects, and includes different kinds of people. It is a
company that also embraces diversity. Starbucks provides all employees and their same-sex or
opposite sex-partners comprehensive health benefits that include medical, dental, and vision
care as well as tuition reimbursement, stock options, vacation.
Starbucks is also company that practices open communication. It keeps employees or
partners frequently informed, its senior leaders frequently holding Open Forum events to
answer employee questions and mitigate issues or concerns. Starbucks believes that it is
important to hire those not just for the ability to be trained in cafe work and customer
satisfaction, but also those with an aptitude for social consciousness. Its mission is to inspire
and nurture the human spirit one person, one cup, and one neighborhood at a time .The
company is well-known for its ethical sourcing of coffee from farmers all over the globe and
environmental leadership (by 2015 all its cups will be reusable or recyclable). It is also
renowned for its community involvement through volunteer work in neighborhoods where
stores are located.
Starbucks has offered a variety of training programs to provide employees sufficient
knowledge of the companys values and how to foster it amongst their customers. First
Impressions has given insight to baristas as how to interact with customers in terms of service
principles. Employees are made aware of the companys history and learn how to perform
coffee preparation and use a cash register. In addition, they learn the right kind of
communication skills to interact optimally with customers in order to create the environment
that Starbucks aims to promote. Starbucks has tried to develop its human resources practices
and make them stronger to the extent that employees have better relationships with their
managers and feel connected to the organization as a whole.
Starbucks has gained admiration and recognition by being a pioneer in offering the
same benefits to part-time workers as are offered to full-time employees. Such benefits include
health care, dental, and vision insurance (Obloga, 2011). Benefits also cover alternative medical
treatments, such as hypnotherapy and naturotherapy. Starbucks additionally offers their
employees benefits such as income protection, saving plans, partner discounts, and free drinks
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on a regular basis. Another unique benefit of Starbucks is theirAdoption Assistance Program,


which reimburses employees a certain amount of expenses incurred during a child adoption
process stated that such benefits serve to increase employee motivation, recognition, and
retention; they also assist in decreasing employee turnover.
Fundamentally, Starbucks believes its baristas are the key feature to the Starbucks
experience and customer satisfaction. Starbucks wants them to have coffee knowledge and
product expertise, providing great customer service. For example, to make sure that customers
were delighted and served coffee to high-quality standards, Starbucks closed most of its stores
in 2008 for a full day training event. The training event, known as Perfect the Art of Espresso,
was held to help baristas deliver high-quality espresso. One activity involved pulling an espresso
shot and then evaluating and reflecting upon the process and the product. (Did it take too long
or too short a time? Was it the right color?). Staff discussions about how the training would be
of use to customers occurred at each store. This highlights the degree to which the company
values the training of its baristas and views the importance of their role in the Starbucks
experience

7.Financial analysis

Financial Performance
The company reported revenues of (US Dollars) US$16,447.8 million for the fiscal year
ended September 2014 (FY2014), an increase of 10.6% over FY2013. The operating profit of the
company was US$3,081.1 million in FY2014, compared to an
operating loss of US$325.4 million in FY2013. In FY2014, the company recorded a net
margin of 12.6%, compared to a net margin of 0.1% in FY2013.

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8.The organizational structure


Starbucks has a matrix organizational structure, which is a hybrid mixture of different
features from the basic types of organizational structure. The following are the main features of
Starbucks Coffees organizational structure:
1.Functional structure
2.Geographic divisions
3.Product-based divisions
4.Teams
Functional Structure. The functional structure feature of Starbucks Coffees
organizational structure refers to grouping based on business function. For example, the
company has an HR department, a finance department and a marketing department. These
departments are most pronounced at the top levels of Starbucks Coffees organizational
structure, such as at the corporate headquarters. This feature relates with hierarchy in the
organizational structure of Starbucks. For instance, the corporate HR department implements
policies applicable to all Starbucks cafs. The functional structure feature of the firms
organizational structure facilitates top-down monitoring and control, with the CEO at the top.
Geographic Divisions. Starbucks Coffees organizational structure also involves
geographic divisions. At present, the company has three regional divisions for the global
market: (a) China and Asia-Pacific, (b) Americas, and (c) Europe, Middle East, Russia and Africa.
Also, in the U.S. market, Starbucks Coffees organizational structure involves further geographic
divisions: (a) Western, (b) Northwest, (c) Southeast, and (d) Northeast. Each geographic division
has a senior vice president. In this way, each Starbucks manager reports to two superiors: the
geographic head (e.g. President of U.S. Operations) and the functional head (e.g. Corporate HR
Manager). This feature of Starbucks Coffees organizational structure supports closer
managerial support for geographic needs. Each division head is given a high degree of flexibility
in adjusting strategies and policies to suit specific market conditions.
Product-based Divisions. Starbucks also uses product-based divisions in its
organizational structure. These divisions address product lines. For example, Starbucks has a
division for coffee and related products, another division for baked goods, and another division
for merchandise like mugs. This feature of the firms organizational structure enables focus on
certain product lines. In this way, Starbucks effectively develops and innovates its products with
support from its organizational structure.
Teams. Teams are used in different parts of Starbucks Coffees organizational structure.
However, teams are most notable at the lowest organizational levels, particularly the Starbucks
cafs. In each caf, the firm has teams organized to deliver goods and service to customers. This
feature of Starbucks Coffees organizational structure enables the company to provide effective
and efficient service to consumers.
Starbucks has reformed its organizational structure over time. By 2007, the company
was expanding rapidly, such that it shifted focus away from customers toward strategic global
expansion. However, Starbucks experienced significant decline in sales in 2007. This decline was
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worsened because of the lack of focus on customer experience. When Howard Schultz resumed
the CEO position in 2008, he changed Starbucks Coffees organizational structure to bring back
focus on customer experience. New regional divisions were created, and teams at Starbucks
cafs were given better training. Thus, the current organizational structure of Starbucks is a
result of this reform to improve customer experience and the firms financial performance.

9.Social responsibility

Starbucks
social
responsibility
strategy is based on three pillars:
Community, Ethical Sourcing, and the
Environment. Heres what the company
does to have a positive impact in each of
those areas.
To have a positive impact on the
communities it works with and in, Starbucks
develops community stores that partner with
local nonprofits. The nonprofits these stores
work with offer services aimed to meet the
needs of the communities theyre located in.
Starbucks in turn donates $0.05 to $0.15 per
transaction to the nonprofit partner. You can
find a list of these community stores here.
Starbucks has pledged to hire at least 10,000 veterans and military by 2018, and focuses on
diversity and inclusion in the workplace.
Starbucks refers to the planet as their most important business partner, and takes a
comprehensive approach to reducing their environmental impact. To do this, they build LEED
certified stores, are committed to recycling and conserving water and energy, and pursue
strategies that address climate change on a global level. Generally, Starbucks tries to be as
environmentally friendly as possible in every aspect of their operations.
First and foremost, Starbucks decided to invest in its people and the communities they
work with. When a company puts people first, and focuses on making positive changes for the
communities they work with and serve, consumers notice. In fact, studies show that when
companies support social or environmental issues, 93% of consumers have a more positive
image of that company. Starbucks strategy and resultant outcomes are proof positive of that
study. Plus, when companies like invest in their people, they see less turnover, and employees
become advocates of the company as well.

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10.Strategies
10.1 Product Strategy
Becoming innovative and creative with their products diversification
Coffee:
More than 30 blends and single-origin premium coffees.
Handcrafted Beverages:
Fresh-brewed coffee, hot and iced espresso beverages, Frappuccino coffee and non-coffee
blended beverages, Starbucks Refreshers, smoothies and teas.
Merchandise:
Coffee- and tea-brewing equipment, Verismo System by Starbucks, mugs and accessories,
packaged goods, music, books and gifts.
Fresh Food:
Baked pastries, sandwiches, salads, salad and grain bowls, oatmeal, yogurt parfaits and fruit
cups.

10.2 Store/ Retail Strategy: Third Place


Focused on creating thethird place experience for everyone to go to between home
and work. It is a must that customers feel the uniqueness of enjoying their Starbucks coffee
experience.
Creating unique and relaxing experience and atmosphere for people has been very
important for the company as they have realized that this is one of the strongest concepts
attached to the company.
The coffee giant achieved these using creature comforts, such as comfortable furniture
and relaxing music

10.3 Manufacture Strategy


By having the backward integration theory which tries to cooperate and engage their
suppliers in order to prepare good and sustainable coffee.
Robust Desing manufacturing.

10.4 Pricing Strategy


Premium pricing strategy based on penetrating market pricing which tries to enhance
the market segments in middle class society based on the emerging economics.
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10.5 Service Strategy


Provide excellent services through customer service
Giving the premium services for their customers
Make the customers to have Starbucks Experience by making them become loyal and
repetitively buy their products
Customer Handling by giving customer-based service
10.6 Marketing Communication Strategy
The Starbucks marketing strategy has even expanded to create a community around
their brand.
On their website, individuals are encouraged to express their experiences with
Starbucks history, and the company strives to personally join in the contest.
Starbucks marketing strategy has always focused onnword-of-mouth advertising &
social media strategy
10.7 International Business Strategy
Internationalization of Starbucks by having more than 19,000 stores all over the world
The company's aggressive make the Starbucks store conquer in every large city in the
world.
"Starbucks on every corner" strategy has allowed Starbucks to dominate local markets.

11.The SWOT analysis


Strengths
The main strength of Starbucks is its strong financial performance which has resulted in
the company occupying the number one spot among coffee and beverage retailers in the world
The company is valued at more than $4 Billion which is a key strength when compared to its
competitors
The intangible strengths of Starbucks include its top of the mind recall among
consumers and by virtue of its brand, which symbolizes excellence, and quality at an affordable
rate, the company enjoys a dominant position in the worldwide market for coffee and
beverages.
The company is the largest coffeehouse in the world and because of its size and high
volumes; it can afford to price its products in the premium as well as the middle tier range to
attract more consumers.
The company is known for its pioneering people management in an industry where
people skills and soft skills make the difference between success and failure. In other words,
Starbucks has actualized a positive and welcoming workplace for its employees, which
translates into happier associates serving customers in a superior way leading to all round
benefits for the company.

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Weaknesses
The company is heavily dependent on its main and key input, which is the coffee beans
and hence, is acutely dependent on the price of coffee beans as a determinant of its
profitability. This means that Starbucks is overly price sensitive to the fluctuations in the price
of coffee beans and hence, must diversify its product range to reduce the risk associated with
such dependence.
The company has come under fire in recent times for its procurement practices with
many social and environmental activists pointing to the unethical procurement practices of
coffee beans from impoverished third world farmers. Further, the company has also been
accused of violating the Fair Coffee Trade principles that were put in place a few years ago to
tackle this precise problem.
The company prices its products in the premium to the middle tiers of the market
segment which places its products outside the budgets of many working consumers who prefer
to frequent McDonalds and other outlets for their coffee instead of Starbucks.
The company must immediately diversify its product range if it has to compete with full
spectrum competitors like McDonalds and Burger King in the breakfast segment which is
rapidly growing as a consequence of compressed schedules of consumers who would like to
grab a bite and drink something instead of making it at home.
Opportunities
The company has an opportunity to expand its supplier network and expand the range
of suppliers from whom it sources in order to diversify its sources of inputs and not be at the
mercy of whimsical suppliers. Further, this would also help the company in becoming less
sensitive to the prices of coffee beans and make it resilient against supply chain risks.
The company has a huge opportunity waiting for it as far as its expansion into the
emerging markets is concerned. With a billion consumers likely to join the pool of those who
want instant coffee and breakfast in China and India, the company can expand into these
countries and other emerging markets, which represents a lucrative opportunity for the taking.
Starbucks also has the opportunity to expand its product offerings to take on the full spectrum
food and beverage retailers like McDonalds and Burger King as the consumer segment which
these retailers target is expanding leading to more business opportunities for Starbucks to take
advantage of.
The company can significantly expand its network of retail stores in the United States as
part of its push towards greater market share and more consumer segments. This opportunity
ties in with the other opportunities described above related to the expansion into newer
markets, diversifying into newer consumer segments, and increasing its footprint across the US
and globally.

Threats
The company faces threats from the rising prices of coffee beans and is subject to supply
chain risks related to fluctuations in the prices of this key input. Further, the increase in the
prices of dairy products impacts the company adversely leading to another threat to its
profitability.

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The company is beset with trademark and copyright infringements from lesser-known
rivals who wish to piggyback on its success. As with other multinational retailers in the
emerging markets, Starbucks has fought litigation against those misusing its brand and famous
logo.
The company faces intense competition from local coffeehouses and specialty stores
that give the company a run for its money as far as niche consumer segments are concerned. In
other words, the company faces a tough challenge from local stores that are patronized by a
loyal clientele, which is not enamored of big brands.
Starbucks has to expand into emerging markets as a necessity as the developed markets
that it has traditionally relied on are saturated and given the fact that the ongoing recession has
made the going tough for many retailers, it faces significant threats from this aspect.
Finally, as mentioned earlier, Starbucks faces significant challenges because of its global supply
chain and is subject to disruptions in the supply chain because of any reason related to either
global or local conditions.

12.Conclusions(recommendation)
In conclusion I want to mention that i like starbucsk coffee and this is the reason that I
choose to write this project about this company and my recommandations for starbucks are:
Starbucks has great growth opportunities in Tea and Fresh Juice products mix. They
should build up theseproducts along the same line of their core coffee products.
Also as consumer tastes and lifestyle shift towards more snacks and beverages options,
Starbucks should tailor its menus and expand to give more healthy product offerings in
its mix.
We can see that Starbucks invest very little in advertising and marketing initiatives. It
would be recommended that Starbucks make significant investments in advertising and
marketing initiatives in the face of increased competition in the market.
Further build and retain customer loyalty, by building on beta concept of on-the-go
home delivery.

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Bibliography:
http://scholar.harvard.edu
http://www.academia.edu
http://www.starbucks.com
The starbucks experience-5 principales to turning ordinary into
extraordinary/by Joseph A. Michelly

EXPLORING CORPORATE STRATEGY/by Gerry Johnson, Kevan Scholes and Gerry


Johnson

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