Starbucks:

Case Study
Group 4
Operations Management
 Content of this presentation
● Summary of the Case
● Statement of the Problem
● Statement of the Objective
● Areas of Consideration/Analysis
● Alternative Courses of Action
● Recommendations
● Action Plan
● Contingency Plan
 Summary
Starbucks Corporation, an American company founded in 1971 in Seattle, WA, is
a premier roaster, marketer and retailer of specialty coffee around world. Starting
as a single shop specializing in high quality coffee and brewing products the
company grew to be the largest roaster in Washington with multiple locations
until the early 80’s.
In 1987, Howard Schultz led a group of investors that purchased Starbucks from
its' founders. Where in the founders are three academic — English teacher Jerry
Baldwin, history teacher Zev Siegel, and writer Gordon Bowker.
 Summary
The three partners shared a love of fine coffees and exotic teas and believed they
could build a clientele in Seattle much like that which had already emerged in the
San Francisco Bay area. It was first called as Starbucks Coffee, Tea, and Spice.
Since then, Starbucks has become the premier roaster and specialty coffee retailer
in the world.
 Summary
The company experienced rapid growth going public in 1992, and growing
tenfold by 1997, with locations around the United States, Japan and Singapore.
Starbucks also began expanding its brand. Starbucks uses minimal advertising
and has grown on word of mouth and brand recognition. Currently, there are
32,938 stores worldwide.
Starbucks recently started to expand product mix by venturing into the tea and
fresh juice product offerings with a mergers and acquisition. This provides
significant opportunities for Starbucks products and product-lines.
 Time Context

Mid - 1980’s to Present

 View Point
Howard Schultz
Chief Executive Officer, Starbucks
Corporation
(1986-2000, 2008-2017)
 Statement of the
Problem

This study aims to answer the

following question:

How can Starbucks reach

other consumers other than coffee
drinkers?
 Objectives
General Objective
● To reach target and potential customers.
Specific Objectives
● To provide continuous customer satisfaction.
● To increase customer lifetime value.

Cabrera, Allen Lyra

 Areas of Consideration/Analysis
Strengths Weaknesses
❖Strong Market Position and Global Brand. ❖Clashing Coffee Culture with that of other
Recognition. countries.

❖Products of the Highest Quality. ❖Expensive Products.

❖Human Resource Management.

Guba, Riesz Karel

 Areas of Consideration/Analysis
Opportunities Threats
❖Expansion into Emerging Markets. ❖Increased Competition.

❖Expanding Product mix and offerings. ❖Changing Consumer tastes and lifestyle
choices.
❖Technological advances.

Guba, Riesz Karel

 Alternative Courses of Action
Expand Product Mix and
New Distribution Channels
Offerings
This presents a great opportunity for the Successfully expanding a product mix
future by expanding their end product can help a business adjust to changing
distribution systems and could drive consumer demand and preferences while
more revenue if the implementation is reducing product risk and reliance on a
successful. single product or product line.

Mauhay, Tricia Aez

 New Distribution Channels
Advantages Disadvantages
➔ Drive Profits ➔ Decreased revenue
◆ Opportunities to sell more of ◆ Products are at a cheaper
your products to both new price.
and existing customers. ➔ Complexity
➔ Build Greater Brand Awareness ◆ Some channels require
◆ Generate buzz around your several participants.
brand. ➔ Confusion
➔ Reduce Market Risks ◆ Channel members may have
◆ Selling through just one conflicts of interest.
channel is a risky game.

Mauhay, Tricia Aez

 Expand Product Mix and Offerings
Advantages Disadvantages
➔ Low Cost of Production and ➔ Competition
Development ◆ Businesses scramble to come
◆ New products will be up with the next exciting
produced utilizing the product.
existing systems of the ➔ Riskiness
company. ◆ New products come with a
➔ Competitive barriers world of uncertainty
◆ More difficult to find a gap ➔ Evolving Markets
in the marketplace. ◆ A continually changing
➔ Reach New Audiences landscape of customer tastes.
◆ A need to continually attract
new ones.

Mauhay, Tricia Aez

 Recommendation
It is highly recommend to use the two alternative
actions.

❖ Where in, expanding product mix and offerings

can help the business to adjust on the never
ending demands and preferences of customers.
❖ It is also better to add and expand distribution
channels which can be a great opportunity for the
company's future success. Which will drive more
revenue and customers if it is implemented

Andaya, Jaina Jane

 Action Plan
For the Starbucks Corporation to attract new
audiences, they must observe the following:

● Remain relevant to the customer in order to

grow in the emerging international
markets.
● Focus on getting additional penetration into
untapped rural markets.
● Build better relationships with big box
retailers to get premium shelf space and
increase the efficiency of this distribution
channel.

Orbista, Johnwen
 Contingency Plan

1. Maintain a research and development team to

continually reinvent the way Starbucks did
business.

2. Make Starbucks a strong global brand by

challenging the status quo, innovating, taking
risks, and altering the company’s vision of who it
was, what it did, and where it was headed.

Barbosa, Jandrei
 Updated History

● In 2018, Howard Schultz retires from Starbucks,

becomes chairman emeritus.

● Today Starbucks is the largest coffeehouse company

in the world, with 32,938 retail locations as of the
first quarter of 2021.

● During the first quarter of 2021, Starbucks launched

278 new stores.
Thanks
Group 4
Andaya, Jaina Jane
Barbosa, Jandrei
Cabrera, Allen Lyra
Dalisay, Jane Mharbie
Guba, Riesz Karel
Mauhay, Tricia Aez
Orbista, Johnwen Maxie

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