STARBUCKS

Presented by:

Mahwish Shaikh
Ahsan ali Kehar Assigned by:
Mehrunisa Shaikh Sir Abdul Salam
Zehra Shoro
Rehan ali kango
Content

  
History Competitive profile Grand Strategy Matrix
 Vision (CPM) matrix  The Quantitative

Michael Porters five Strategic Planning

Mission forces Matrix (QSPM)
  
Coffee War Internal Factor Conclusion
 Marketing Evaluation

Swot matrix
 External factor

Bcg Matrix
evaluation(EFE) 
Internal External
matrix
Matrix
ZEHRA SHORO
 Vision And Mission

– Vision statement
To establish Starbucks as the premier purveyor of the finest coffee in the world
while maintaining our uncompromising principles while we grow.

– Mission statement:
To inspire & nurture the human spirit , one person, one cup, and 1 neighborhood at a time.
History
– Starbucks was founded in 31st march 1971 in Seattle Washington
– After the success of 1 store the second store was opened in 1972 in university village
Washington.
– In 10 years business expanded to 5 new stores
– In 1982 Howard Schultz joined the team and in 1987 he purchased Starbucks from the owners.
– Starbucks experienced its first setback in 2002 when its Japanese operations posted a $3.9
million loss.
– In 2007 when the economic recession hit the world and MacDonald's entered the coffee
business.
Coffee war
Company Franchise store worldwide
Marketing

– Starbucks strives to elevate the simple task of coffee to a new level.

– Starbucks also provide electrical outlets and in some stores wireless
access.
– Starbucks also introduced their Starbucks’ cards .
– Starbucks relies on its image advertising than traditional advertising .
– Starbucks also encourages the use of their website where customers are
able to register their Starbucks’ cards , get nutrition information about
Starbucks, shop online, search for careers and much more.
Competition
MAHWISH SHAIKH
External factor evaluation(EFE)
matrix
S. No Key external factors Weight Rating Weighted score

Opportunities
1 People demand products which are free from artificial flavors and healthy, more focus on .20 4
healthy and hygienic products
0.8
2 High demand of mixed Lipton tea in Middle east and south Asia .10 2
0.3
3 Demand of product line addition .05 4 0.2
4 Building customer relationships .10 3 0.2
5 Globally Expansion .05 3 0.15
THREATS
1 Low price of competitors .20 4 0.8
2 Increase of private café and stores .15 3 0.45
3 Changing Consumer tastes and lifestyle choices .10 2.5 0.375
4 Market saturation in developed countries .05 4 0.2
TOTAL 1.0 3.475

Interpretation: Starbucks is doing good in industry as their EFE is more and above average as their
result is 3.475
Competitive profile (CPM) matrix
Starbucks Caribou coffee Dunkin donuts
Critical success factor Weight Rating Weight score Weight Rating Weight score Weight Rating Weight score

brand image 0.2 3 0.8 0.15 3 0.45 0.1 2 0.2

Product differentiation 0.1 4 0.4 0.2 3 0.6 0.15 3 0.45

Advertising 0.05 3 0.15 0.1 4 0.4 0.1 3 0.3

Price competitiveness 0.15 3 0.45 0.05 3 0.15 0.2 2 0.4

Financial position 0.15 3 0.45 0.05 2 0.1 0.1 1 0.1

Customer loyalty 0.05 3 0.15 0.1 1 0.1 0.05 3 0.15

Global expansion 0.2 2 0.4 0.15 1 0.15 0.2 4 0.8

Customer service 0.1 4 0.4 0.2 2 0.4 0.1 2 0.2

1 3.2 1 2.35 1 2.6

Interpretation: In competitive profile matrix Starbucks weighted score is 3.2 so its performance is
better than competitors.
 Michael Porters five forces
Competitive rivalry or Very There is less differentiation of product because coffee
competition strong and snacks are offered by many other brands

Bargaining power of buyers or Very They have power to switch to other brands
customers Strong

Bargaining power of suppliers Very They have power if the number of suppliers are low in
Strong an industry, Starbucks relies heavily on finest quality of
beans

Threat of substitutes or strong because substitute product price is lower.

substitution
Threat of new entrants or new Strong There are lots of new brands opening, with this new entrant
entry are coming with the innovative ideas, and mostly local shops
are entering in the market with low cost and great quality
Interpretation: Starbucks has been strong in all five forces within the completion and industry
AHSAN ALI KEHAR
Internal Factor Evaluation
key internal Factors weight Rating Weighted
Score
Strengths
1 Internationally recognized brand 0.1 4 0.4
2 Convenient 0.07 4 0.28
3 great working environment 0.05 3 0.15
4 Employee excellence 0.1 4 0.4
5 R&D department 0.05 3 0.15
6 Strong brand image and essence 0.03 3 0.09
7 high standards services 0.1 4 0.4
8 wireless access, website, Starbucks cards, online services, nutritional information.' 0.1 3 0.3

9 Variety of flavors
Total 0.6 2.17
Weakness
1 Overdependence in the United States market 0.1 2 0.2
2 Low market share globally 0.05 1 0.05
3 Expensive Products 0.1 2 0.2
4 Sustainability 0.1 2 0.2
5 Less advertising and marketing of their products 0.02 1 0.02
6 Risky investments in more locations 0.03 0
TOTAL 0.4 0.67
NET TOTAL 1 2.84
 SWOT MATRIX
Strength-Opportunities Weakness-Opportunities
– Increase expansion in continental market with its • As Starbucks is over dependent in united
strong brand image (S1, O5)
states they should expand their market to
other countries as well (w1, O5)
– Try to explore and utilize their R&D department
• As their products are so expensive they
with some more products in beverages as
should expand their product line with low
demanded by customers locally and globally.
cost products for middle and lower
– (S5, O2) middle class (W3, O3)
– by constantly introducing new variety of flavors in
their products and expanding their product line
and giving maximum value to customer. They can
build good and strong relationship with
customers. (s9, O4)
 SWOT MATRIX
Strength-Threats
– One of the major threats that Starbucks
could face is against its competitors. For
this purpose, Starbucks should work
through their strengths and give high
standard services to the customers. (S7,
T1)
– With the threat of market saturation in
developed countries Starbucks with strong
brand image can move to other countries
and earn more revenue. (S6, T4)
Weakness-Threats
• As Starbucks is more dependent
on some of their products in united
states. They should extend their
product line with Changing
Consumer tastes and lifestyle
choices in other countries. (W1,
T3)
• To avoid the threat of low price
competitors they should increase
their sustainability in the market
by doing different things (W4. T1)
KANGO, REHAN ALI
Space Matrix
 Space Matrix
Financial Position Rating Competitive Position Rating
1 Star bucks ROA is 5.56% +2 1 Star bucks provides the premium coffee and its beans -1
2 Star bucks ROE is 12.66% +4 2 Star bucks is providing WIFI and Electric sockets so that even working class can -2
3 Star Bucks Revenue Decreased to 7% +1 feel at ease
4 Star bucks Net Income Decreased 72% +1 3 Starbucks consider employees its partners -2
Total 8 Total -5

Industry Position Rating

1 Star bucks stores available in multiple countries to reach out the maximum +6
customers
2 Star bucks is also having advantage of selling retail products +3
3 Star Bucks can gain advantage of providing healthy and organic drinks +3
Total +9

Stability Position Rating

1 Starbucks prices are very high as compare to other rivals, they should at least -5
come closer with the rival’s prices
2 Star bucks retail products demand should be increased and provide knowledge -4
about using the coffee machines and brewing the beans
3 Star Bucks should increase in the Research and Development sector in order to -4
bring some new recipe
Total -13
 Space Matrix

• SP Average is -13.0 ÷ 3 = -4.33

• IP Average is +9 ÷ 3 = 3
• CP Average is -5 ÷ 3 = -1.66
• FP Average is +8.0 ÷ 4 = 2
• Directional Vector Coordinates:
• x-axis: -1.66 + (+3.) = +1.34
• y-axis: -4.33 + (+2) = -2.33
 Bcg Matrix
HIGH LOW

• market penetration

HIGH
• market development,
• product development

• Market Growth:10.32%

LOW
• Market Share: 1.32%

Interpretation: By analyzing the competitors given in the case study we found out that Starbucks has
the market share of 1.32% which is excellent.
MEHRUNISA SHAIKH
 Internal External Matrix

Interpretation: Starbucks Corporation has lay in Grow and Build. According to its (IFE) weighted score is
2.84 and (EFE) weighted score is 3.475. Starbucks has focused on Backward, Forward and market
penetration, market Development and should have Product Development
 Grand Strategy Matrix

Interpretation: Starbucks has lay in Quadrant (I) because Starbucks Market growth is 10% and its
Competitive position is strong.
 Key Factors Weight AS TAS As TAS

The Quantitative
S. No
OPPORTUNITIES
1 People demand products which are free from artificial .20 1 0.2 4 0.8
flavors and healthy, more focus on healthy and hygienic

Strategic Planning products

2 High demand of mixed Lipton tea in Middle east and
south Asia
.10 1 0.2 3 0.3

Matrix (QSPM)
3 Demand of product line addition .05 3 .15 4 0.2
4 Building customer relationships .10 1 0.1 1 0.1
5 Expansion of market share to other countries .05 1 0.05 1 0.5

• There are two alternative strategies 1

THREATS
Low price of competitors .20 4 0.5 1 0.2

which Starbucks need to consider 2

3
Increase of private café and stores
Changing Consumer tastes and lifestyle choices
.15
.10
-
1
-
.10
-
2 0.2
4 Market saturation in developed countries .05 1 0.05 1 0.05

• (1) To reduce the prices Strategy STRENGTH

Total 1

1 internationally recognized brand 0.1 - - - -

• (2) Expand the shelf items 2
3
Convenient
great working environment
0.07
0.05
-
-
-
-
-
-
-
-
4 Employee excellence 0.1 - - - -
• According to the sum of total 5
6
R&D department
Strong brand image and essence
0.05
0.03
2
1
0.1
0.03
3
1
.15
0.03
attractiveness we analysis that 7
8
high standards services 0.1
wireless access, website, Starbucks cards, online services, 0.1
-
-
-
-
-
-
-
-
strategy 2 with Attractive score of 9
nutritional information.'
Variety of flavors 0.1 - - 4 -
2.63 indicates that Starbucks need WEAKNESS

to increase its shelf item by 1 Overdependence in the United States market

2 Low market share globally
0.1
0.05
-
1
-
0.05
-
1
-
.05

introducing new items. 3 Expensive Products

4 Sustainability
0.1
0.1
4
1
0.4
0.1
2
1
0.2
0.1
5 Less advertising and marketing of their products 0.02 - - - -
6 Risky investments in more locations 0.03 - - - -
Total 1 2.03 2.68
Conclusion

• We found out that Starbucks is performing averagely in the industry

because there is lots of competition and rivals are doing price wars
to overcome the Starbucks. Star bucks need to increase product line
in order to gain advantage in the industry.
THANK YOU..