BUSINESS PLAN OF STARBUCKS

TABLE OF CONTENTS

COMPANY DESCRIPTION --------------------------------------------------------------------- 1-2

MARKET ANALYSIS ---------------------------------------------------------------------------- 3-4

COMPETITIVE ANALYSIS —------------------------------------------------------------------ 5

DESCRIPTION OF MANAGEMENT AND ORGANIZATION —------------------------ 6-8

COMPANY DESCRIPTION

Starbucks Corp. (Starbucks) is a retailer of speciality coffee. Specialty coffee is roasted,

marketed, and sold in stores. The business sells a variety of coffee blends, artisan beverages,

goods, and food products through its outlets. Additionally, Starbucks provides ready-made

drinks, pastries, whole bean and ground coffee, as well as other libations. Its brands include

Teavana, Evolution Fresh, Starbucks Reserve, Princi, Seattle's Best Coffee, and The company

has locations in Asia-Pacific, the Middle East, Africa, Europe, and the Americas through its

owned and licensed outlets. In Nevada, Pennsylvania, Tennessee, Washington, China, and other

US states, the corporation runs roasting operations as well as production, storage, and

distribution facilities. Seattle, Washington, in the US, serves as the organization's headquarters.

It starts in 1971 on the cobblestone streets of Seattle's venerable Pike Place Market. Starbucks

built its first location in this location, providing our customers with freshly roasted coffee beans,

tea, and spices from all over the world to take home. It's name was derived from the well-known

story "Moby-Dick," which evokes the maritime heritage of the early coffee Ten years later,

Howard Schultz, a young New Yorker, would enter through these doors and, after taking his first

sip, fall in love with Starbucks coffee. A different cobblestone route would take him to another

discovery once he joined the organization in 1982. The first time Howard visited an Italian

coffee shop was in Milan in 1983, and upon his return to Seattle, he was inspired to infuse

Starbucks with the friendliness and creativity of Italian coffee culture. By 1987, we had switched

from brown to green aprons and were starting a new chapter as a coffee shop. In the near future,

Starbucks would grow to include Chicago and Vancouver in Canada, followed by California and

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Washington, D.C. also New York We would cross the Pacific by the end of 1996 to open our first

location in Japan, which would be followed by Europe in 1998 and China in 1999.

Company Goals

● To expand its business and to have grown in the next two decades.

● To welcome millions of customers each week .

● To become part of the fabric of ten thousands of neighborhoods all around the world.

● To inspire and nurturw human spirit, one person, one cup and one neighborhood at a

time.

Target Customers

Starbucks markets to both males and females, in a wide age group of 22 to 60 years, with

a focus mostly on urban and suburban centers. The target market is relatively affluent – middle

and upper class – as well as educated, socially aware, active and busy.

While pure coffee lovers are part of the Starbucks target demographic, they are not the majority;

there is a strong targeting focus on customers who go for Starbucks signature and unique

beverage offerings, including shakes, teas, and vegan coffees, as well as their health-conscious

food options, like Classic Oatmeal or Grilled Chicken & Hummus Protein Box.

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MARKET ANALYSIS

Starbucks has become world famous and every day, the company delivers high-quality

coffee and beverages to customers all around the world. One of their most well-known mission

statements is: to inspire and nurture the human spirit - one person, one cup, one neighborhood at

a time. Starbucks' products range from a cup of Joe to Frappuccinos, pastries, and even

after-coffee. Their baristas are trained to perceive each drink as a process that must be executed

the same way every time to ensure the consumer receives the same quality drink every time, or

they will happily remake it. Due to various policies like this, Starbucks has developed high brand

awareness and loyalty among customers, leading it to the market leader in coffee sales.

Starbucks can be found in most urban areas, in a variety of locations, strategically placed

to provide the highest efficiency to the majority of customers. For that large range of consumers,

a wide range of products to meet the needs of the coffee drinker and the pastry eater. Finally, a

price that is higher than competitors but compensated for by adding non-tangible value, such as a

welcoming atmosphere.

To achieve a profit, they concentrate on their strengths, which include brand loyalty,

convenience, a varied product mix, and a diverse set of patents and technology. These attributes

also offer Starbucks the attraction of a good coffee, for which many consumers are ready to

spend a premium above competitors. This allows businesses to maintain a sustained competitive

advantage over their competitors without having to spend a lot of money on advertising.

Starbucks has the option of reaching out to new customers who may not visit the store or are

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regulars for their competition in an attempt to advertise how excellent their product is and

why they should change over.

Starbucks uses the unique selling proposition concept to differentiate their products and

services and gain a competitive advantage over their competitors. Starbucks is well-known for

providing excellent customer service. Customers can either spend some time in the shop and

enjoy the friendly and cozy atmosphere, and the free Wi-Fi, or they can quickly get their

beverage and continue on their way. In both circumstances, the customer is expected to get a

one-of-a-kind experience. This unique selling proposition is crucial in a quick environment when

technology is getting more personalized and social relationships are fading; customers can find

some human contact in their daily lives by visiting a Starbucks store.

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COMPETITIVE ANALYSIS
STRENGTHS
● Strong financial performance
● Quality, Taste and Standardization
● Employee treatment
● Brand image
● Global supply chain
OPPORTUNITIES
● Strengthen Online Channels
● Partnerships or alliances with other
firms
● Intense competition from local
coffeehouses
● Adopt price differentiation
● Expansion in developing markets
WEAKNESSES
● High prices
● Product can be easily imitated
● Avoidance of European taxes
● Unhealthy choices
● Supply cost
THREATS
● Intense competition from local
coffeehouses
● A smaller dealer could try to find
better deals everywhere
● Competitors and new entrants
● Environmental disruption
● Economic Downturns
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DESCRIPTION OF MANAGEMENT AND ORGANIZATION

Starbucks has a matrix organizational structure, which is a hybrid mixture of different

features from the basic types of organizational structure. In this case, the structural design

involves intersections among various components of the coffeehouse chain business. For

example, the company’s product-based divisions intersect with functional groups and geographic

divisions, which intersect with other parts of the organization.

The following features of Starbucks’s corporate structure are

1. Functional hierarchy (business function)

2. Geographic divisions (areas or regions of operations)

3. Product-based divisions (product type, such as food and merchandise)

4. Work teams (groups for tasks and objectives throughout the business organization)

Functional Hierarchy. The functional hierarchy feature of Starbucks’ organizational structure

refers to grouping based on business function. For example, the coffee company has an HR

department, a finance department, and a marketing department. These departments are most

pronounced at the top levels of Starbucks’ corporate structure, such as at the corporate

headquarters. This characteristic is hierarchical. The corporate HR department implements

policies applicable to all of the company’s cafés. The functional hierarchy of the corporate

structure facilitates top-down monitoring and control, with the CEO at the top. Functional groups

are responsible for the organization-wide development and implementation of Starbucks

Corporation’s generic competitive strategy and intensive growth strategies.

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Geographic Divisions. Starbucks’s corporate structure involves geographic divisions, which

are based on the physical location of market operations. The coffee company has three regional

divisions for the global market: (1) Americas, (2) China and Asia-Pacific, (3) Europe, Middle

East, and Africa. Also, in the U.S. market, Starbucks Coffee’s organizational structure involves

further geographic divisions: (a) Western, (b) Northwest, (c) Southeast, and (d) Northeast. Each

geographic division has a senior executive. In this way, each local manager reports to at least two

superiors: the geographic head (e.g., President of Europe, Middle East, and Africa Operations)

and the functional head (e.g., Starbucks Corporate HR Manager). This feature of the corporate

structure enables closer managerial support for Starbucks’s geography-based business needs.

Each division head is given flexibility in adjusting strategies and policies to suit specific coffee

market conditions.

Product-based Divisions. Starbucks has product-based divisions in its organizational structure.

These divisions address product lines. For example, the company has a division for coffee and

related products, another division for baked goods, and another division for merchandise, such as

mugs. This feature of the corporate structure enables Starbucks to focus on product development.

In this way, the company develops and innovates its coffee and related products with support

from its organizational structure. Such development provides competitiveness that the business

needs, especially in dealing with the threats identified in the SWOT analysis of Starbucks

Corporation.

Teams. Teams are used in different parts of Starbucks Coffee’s organizational structure.

However, teams are most visible at the lowest organizational levels, particularly at the

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coffeehouses. For example, each café has teams organized to provide goods and service to

customers. This feature of the corporate structure enables the coffee business to deliver effective

and efficient service to consumers. Team effectiveness is a determinant of the financial

performance of licensed locations and company-owned coffeehouses. Starbucks’s corporate

culture influences how such team effectiveness is achieved. The coffee company’s development

depends on team-based factors and associated human resource management strategies.

The characteristics of Starbucks Corporation’s organizational structure shape strategic

management decisions in the business. Also, different levels of the business organization are

responsible for maintaining the integrity of the corporate structure. The identified structural

characteristics present a framework that influences corporate strategy and executive direction

involving Starbucks’s headquarters.

The current corporate structure of Starbucks is a result of reforms to improve customer

experience and business financial performance. The company recognizes the importance of

strategic alignment involving various facets of the coffee business. In this case, for example,

aligning the corporate structure with trends in the coffeehouse industry stabilizes Starbucks’s

market presence and market share. It is expected that the company’s future organizational

structure will involve additional product-based divisions, such as divisions for new services

complementing food and beverage, to account for further diversification. Its development history

suggests that Starbucks will continue acquiring more firms in the future to support its growth

strategies, including diversification.

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References:

Sakhartov, A. V. (2016). Selecting Corporate Structure for Diversified Firms. In Academy of

Management Proceedings (Vol. 2016, No. 1, p. 11521). Briarcliff Manor, NY 10510: Academy

of Management.

Meyer, P. (2022). Starbucks’s Organizational Structure & Its Characteristics