Company overview

To say Starbucks purchases and roasts high-quality whole bean coffees is very true. That’s
the essence of what we do – but it hardly tells the whole story ..

Starbucks was founded in 1971 by Gordon Bowker, Jerry Baldwin and Zev Siegel, who
joined forces to open a coffee shop in Seattle. Starbucks is primarily a retailer of specialty
coffee and it operates in the US, The Asia Pacific region, China, Asia and Latin America.

Starbucks offer the finest coffees in the world, they treat their employees as partners because
they are at they are at the heart of the Starbucks Experience.

STARBUCKS MISSION:

“To inspire and nurture the human spirit - one person, one cup, and one neighborhood at a
time. “

Here are the principles of how Starbucks live that every day:

Our Coffee
It has always been, and will always be, about quality.
We’re passionate about ethically sourcing the finest coffee beans, roasting them with great
care, and improving the lives of people who grow them.
We care deeply about all of this; our work is never done.

Our Partners
We’re called partners, because it’s not just a job, it’s our passion.
Together, we embrace diversity to create a place where each of us can be ourselves.
We always treat each other with respect and dignity.
And we hold each other to that standard.

Our Customers
When we are fully engaged, we connect with, laugh with, and uplift the lives of our
customers - even if just for a few moments.
Sure, it starts with the promise of a perfectly made beverage, but our work goes far beyond
that. It’s really about human connection.

Our Stores
When our customers feel this sense of belonging, our stores become a haven, a break from
the worries outside, a place where you can meet with friends. It’s about enjoyment at the
speed of life—sometimes slow and savored, sometimes faster. Always full of humanity.
Our Neighborhood
Every store is part of a community, and we take our responsibility to be good neighbors
seriously.
We want to be invited in wherever we do business. We can be a force for positive action-
bringing together our partners, customers, and the community to contribute every day.
Now we see that our responsibility—and our potential for good—is even larger.
The world is looking to Starbucks to set the new standard, yet again. We will lead.

Our Shareholders
We know that as we deliver in each of these areas, we enjoy the kind of success that rewards
our shareholders. We are fully accountable to get each of these elements right so that
Starbucks—and everyone it touches—can endure and thrive.

Starbucks mission having the following characteristics which is

 Broad in scope which do not include monetary amounts, numbers, percentages, ratios
or objectives

 It is less than 250 words in length

 Inspiring

 Identify the utility aim of a firm’s products which is coffee

 Reveal that the firm is socially responsible

 Reveal that the firm is environmentally responsible

 Include nine components :

o Customers

o Products and services

o Markets

o Technology

o Concern for survival/growth/profits

o Philosophy

o Self-concept

o Concern for public image

o Concern for employees

 Reconciliatory
  Enduring

Starbucks is very concern about their quality and roasting the finest coffee beans with great
care. Because of this Starbucks drinkers are extremely loyal to this brand.

One of the example that a US tourist in Malaysia saw Starbucks and wanted to purchase one
because back in America they are loyal to the name. They say Starbucks give a sense of
belonging to them and this is jive with their mission

Responsible Company

Starbucks is not only 100% focusing on profit making meanwhile they are also committed to
doing business responsibly and conducting themselves in ways that earn the trust and respect
from their customers, partners and neighbours. They call this as Starbucks “Shared Planet ™”
– which is their commitment to doing business responsibly.

Reusable Tumbler

One of the example is that customer who bring in a reusable tumbler into Starbucks store will
receive a RM2 discount for every purchase. This initiative is to swap the paper cup for a more
eco-friendly option. This effort is one of the ways Starbucks is collaborating with customers
to reduce environmental impacts.

As part of Starbucks Shared Planet commitment to environmental stewardship, Starbucks

have set aggressive goals to minimize cup waste though recycling and reusable options and
are collaborating with a wide range of stakeholders to drive meaningful change.

Starbucks is working to develop a comprehensive recycle cup solution. The company is

collaborating with local authority, raw material suppliers, cup manufacturers, retail and
beverage partners to improve recycling infrastructures.

Not only that, Starbucks customer can log into their website to see the impact if customer
switching from paper cups to a reusable mug. http://www.starbucks.com/thebigpicture

Ethical sourcing

Starbucks are committed to buying and serving the highest quality, responsibly grown,
ethically traded coffee to help to create a better future for farmers and more stable climate for
the planet. Coffee that Starbucks buy are under additional ethical sourcing requirements
verified by Scientific Certification Systems to ensure that it is grown in a manner that
protects the environment and gives back to farming communities.

Last year, Starbucks bought 77% of their total coffee through the ethical sourcing which
almost 300 million pounds worth and they are also committed to doubling the amount of
Fairtrade certified coffee that they will buy in 2009 to 40 million pounds, This figure is more
than anyone else in the world.

Community Involvement

Starbucks are committed to being a good neighbour and a catalyst for change by bringing
together their employees, customers and their communities. By 2015, Starbucks ` aim is to
contribute more than 1 million community- service hours per year. One of the samples is
Starbucks organised a charity movie screening to raise fund for HOPE Worldwide.
SWOT Analysis

Starbucks stores offer a wide choice of coffee beverages from Frappuccino to Caramel hot
chocolate and iced hazelnut chocolate to green tea latte. The company’s extensive products
offering enabled it to cater a wider customer base and meet customer’s diverse needs
efficiently. However, there are thousands stores in both US and international market, a tight
quality and service level control are their biggest challenge in order to maintain a high
standard because Starbucks is not only selling coffee, Starbucks also treating their stores as
third place for consumers after home and office.

Strengths Weaknesses
 Starbucks has a strong brand equity lends  High store operating expenses impact
a competitive edge profits

 Wide geographic presence and operations

in more than 50 countries
 Wide range of coffee-products sold

 Capabilities ensure product quality

Opportunities Threats
 Launch of Starbucks “instant coffee”  Lower buying power

 Lean process to lead to cost reduction  Increasing health consciousness

 Stable credit ratings strengthen

stakeholder confidence

Strengths
 Starbucks has a strong brand equity lends a competitive edge
It has built a reputation globally for the quality of its products and superior customer
experience. Since 1971, Starbucks coffee has been committed to ethically sourcing and
roasting the highest quality Arabica coffee in the world. Today, with stores around the
globe, Starbucks is the premier roaster and retailer of specialty coffee in the world and
was ranked no 13th in Customer Service Champs 2010 by Bloomberg Businessweek
.Owing to its premium brand, Starbucks enjoys a high degree of customer loyalty and
gains a significant competitive advantage over lesser known coffee brands.

 Wide geographic presence and operations in more than 50 countries

As of September 2008, Starbucks operated 1,979 company-operated retail stores and
3,134 licensed retail stores in these international markets. As at 2010 more than 80 stores
around Klang Valley with provide flexibility to the customer to buy coffee.

 Wide range of coffee-products sold

 Starbucks offer a wide range of coffee and non coffee based beverages i.e caramel
macchiato, vanilla latte, caramel latte, iced signature chocolate, frappuccino and etc.
Furthermore, it also offers variety of fresh food items like pastries, prepared breakfast and
sandwiches.

 Capabilities ensure product quality

Starbucks provide the same appearance and maintain at a high product quality throughout
all their stores.

Weaknesses
 High store operating expenses impact profits
If Starbucks is unable to successfully implement its transformation initiatives and
continues to suffer declining profits, it would affect the company’s growth plan and also
affect investor confidence.

Opportunities
 Launch of Starbucks “instant coffee”
The launch of new innovative instant Starbucks coffee is expected to bring incremental
revenues for the company in the near term.

 Lean process to lead to cost reduction

Starbucks can use the Toyota production thinking – Lean process for making their drinks,
cutting out unnecessary steps to improve efficiency and speed up service.

 Stable credit ratings strengthen stakeholder confidence

The stable credits of the company increase stakeholder confidence and also provide an
opportunity to raise finance to meet any expansion plans in the future

Threats
 Lower buying power
The economic downturn has caused consumer have lesser money for discretionary
purchases as a result of job losses, bankruptcies and reduced credit card limit.

 Increasing health consciousness

Starbucks’ products contain caffeine, excessive consumption can lead to a variety of
adverse health effects. Increasing consumer awareness of health risks like obesity and
diabetes could significantly reduce the demand for Starbucks’ products