mgt 449 case analysis: starbucks corporation competing in a global market
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TRANSCRIPT
17
The number of Starbucks stores in 1987
17
The number of Starbucks stores as of 2009 in 55 countries
17,133
Beverages.. A New Era!
1990s opening a new store every workday into the 2000s
Initial public offering on the stock market in 1992 - grown to 165 outlets
Currently in more than 55 countries
A shift in strategy?
Stores closed
in the US since 2008
900Stores opened
outside of the US in 2009
900
Why?!
Strengths
Superior quality
The atmosphere
The size of the company
The company’s culture
Weaknesses
Market cannibalization
The bigger you are, the larger the overhead and the bureaucratic costs
The negative perception
Opportunities
Locally themed menu items
Intensifying socially responsible actions
Threats
Rising dairy costs
Local alternatives
Supply shortage and diminishing returns
Only 20%-50% of profit from global locations
An identity crisis?
The Corporate-Level Strategy
Mission: To inspire and nurture the human spirit – one person, one cup and one neighborhood at a time.
Environmental Mission: Starbucks is committed to a role of environmental leadership in all facets of our business.
Environmental Goals
Goals: Starbucks set a long list of environmental goals, some of the goals are:
Purchase 100 percent responsibly grown and ethically traded coffee by 2015. Achieved.
Double the purchases of Fair-trade certified coffee by 2009. Achieved.
Doubling the farmer land by $20 million by 2015.
The stake-holders to contribute 1 million hours of community services.
50000 young people are innovative in their communities by 2015.
Vertical Integration
exclusive rights to use a high quality Colombian bean crop
Horizontal Integration
Never kill the competition
Tea company acquisition (Tazo)
UK coffee retailer (Seattle’s Coffee)
Business-level strategy
What?
Who?
Where?
Partnership first, country second.
Their international expansion approach
Improving the efficiency
Economies of scale
Human Resource strategy
The marketing strategy
Recommendations
Starbucks have to rethink their “blanket strategy”
Extensive social responsibility campaigns
Catering locally themed menu items
Thank you!
Q & A
