Starbucks

Presented by:
Nahla Youssef
Ahmed Kamal
Ahmed Magdy
 Introduction
 In early years–Founded by Jerry
Baldwin, Gordon Bowker, & Zev Siegel
in 1971, in Seattle
 Sold only whole-bean coffee and coffee
brewing machine
 In 1980’s
– Howard Schultz became CEO and
renamed it as Starbucks
– Re-image from only selling beans to
be a coffeehouse
 Introduction

•From 1990’s till now–

– over than 10500 retail outlets
worldwide
– 35 Million Customers each week
– 3 Stores Opening a day

 Business expansion into food, ice-

cream, tea, RTD business, credit
cards, music and film.
 Schultz strategy
 He set his main Objective to be:
– expanding & exposing brand to increase
people while preserving core values
– Transforming Starbucks from Coffee Retailer to
Coffee Business
– Increase the quality to capture people of seattle
who loved finest coffee but had hectic
schedules
– Selling best class coffee
 Sales revenues

6.5

5.3

4.1

3.3

2.6
2.2
1.7
1.3
1
0.7
0.5
0.3

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
 Starbucks’ Culture
 Great work environment
 Product diversity as an essential
component
 Apply the highest standards of excellence

 Develop satisfied customers

 Contribute positively to community and

environment
 Starbucks Value by Schultz
 Quality-1st preference
 Premium European coffee
experience to USA
 Investing in innovation

 Employees as partners
and the most important
assets
 Brand Awareness

 Word Of Mouth

 Partnerships

 New channels
 Brand Image

•Premium coffee beans

•Brewing techniques
•Store design
•Italian elegance and American informality
•Artwork and Music
 Partnerships
 United Airlines (to provide best services to
the passengers)
– 3600 flights a day, 855 destinations in 155
countries
– 14% Starbucks loyal customers had their 1st
Starbucks coffee in UA flight
 Kraft (for distribution network)
• Starbucks coffee beans are distributed by Kraft in
North America
 Partnerships
 Pepsi (to increase brand awareness &
innovative product development)
– Created ready to drink coffee in cans & bottles
– Under Frappuccino trademark
 Marriot (to increase brand awareness)
– Airport concessions
– Hotel lobbies & Malls
 Brand Strategies
 Frappuccino
– RTD coffee in can and bottle
– Partnership with Pepsi
– First Starbucks’ product in supermarkets
 Tazo
– 3 types of teas- black, green & herbal
– Attracted new customers who look for
alternatives to coffee
 Ice-cream
• Come in 6 flavors from starbucks
 Brand Strategies
 Credit Cards
– Make it easier for customers to purchase
– Combined Starbucks card and credit card

 Starbucks Entertainment
– Investment in film industry
– Custom-made CDs in stores
 SWOT
 Strengths :
– High Quality as a top priority
– Elegant design of the stores
– Brand Image & Brand Identity of Starbucks
– Product diversity
– Internal investment & development .
– Partnership with a lot of famous Companies
– HUB Market Strategy
– Highly qualified team of Management team hired
– Investment in the employees .
– Expanding Starbucks Overseas
– Untraditional Activities Done by starbucks
 SWOT
 Weakness
– Aggressive expansion could lead to managerial
financial problems
– High investment in Activities which didn’t gain
its profit
– High Prices
– Flexibility of Schultz
– Some Partnerships which affect the quality , &
image of starbucks
 SWOT
 Opportunities
– Unsaturated overseas market
– Whole Bean sales in supermarkets

 Threats
– High Activities of the competitors
– Caribou
– Dunkin Donuts
– MC & Burger king
 Going Global focuses on the risks and
rewards of expanding into new geographic
and cultural markets
 Issues
 International Starbucks Expansion with
core values towards products , people,
values , sales driven objectives .

 Different Cultures in the overseas Market

that was not examined & studied leading to
the loss of a major segment .
 Issue 1
 Alternatives 1 :
– Developing well trained Management team
with highly qualified skills , & long experience
to manage the overseas market without losing
the control of the American Market.
 Alternative 2 :
– Hiring professional companies as zone
managers for the overseas market
 Issue 2
 Alternative 1
– Making Market research for every
culture he is going to penetrate , to
see if it match its core values or not ,
& how to match this cultures .
 Alternative 2
– Keeping his old strategy without
change , keeping the plan & core
values in every culture , he is going
to enter