Group Members

Li Merlina (Merlin) M987Z246

Victor Marbun (victor) M987Z259 Thidarat

Prasitpornphakdee (Nok) M987Z245

Nguyen Thi Thanh Nhan (Nhan)M987Z232

江孟唐Chiang Meng-Tang

(Johnson) M98C0242

Huynh Than Phong (phong) M987Z242

Outline

1.Introduction about Starbuck Corporation2.Controllable and Uncontrollable Elements3.Risks and The solutions4.Overall Corporate Strategy of Starbuck5.Strategy for improving productivity in Japan6.Conclusion

Introduction about Starbuck Corporation

Beginning to 1990The original Starbucks was opened in Pike Place Market in

Seattle, Washington, in 1971 by three partners: English teacher Jerry Baldwin history teacher Zev Siegel, and writer Gordon Bowker.

In 1984, the original owners of Starbucks, led by Baldwin, took the opportunity to purchase Peet's .

Introduction about Starbuck Corporation

In 1987, they sold the Starbucks chain to Schultz's Il Giorna.

Starbucks opened its first locations outside Seattle at Waterfront Station in Vancouver British Columbia and Chicago, Illinois that same year

Introduction about Starbuck Corporation

1990 to 2008• The first Starbucks location outside of North America opened in

Tokyo in 1996.• Starbucks entered the U.K. market in 1998 with the acquisition

of the then 60-outlet, UK-based Seattle Coffee Company, re-branding all its stores as Starbucks .

Introduction about Starbuck Corporation

• In 1999, Starbucks experimented with eateries in the San Francisco Bay area through a restaurant chain called Circadia.

• In April 2003, Starbucks completed the purchase of Seattle's Best Coffee and Torrefazione Italia from AFC Enterprises, bringing the total number of Starbucks-operated locations worldwide to more than 6,400

Introduction about Starbuck Corporation

On September 14, 2006, rival Diedrich Coffee announced that it would sell most of its company-owned retail stores to Starbucks.

In January 2008, Chairman Howard Schultz resumed his roles as President and Chief Executive Officer after an eight year hiatus and replaced Jim Donald, who took those posts in 2005.

Collaboration

• In 1995, the company collaborated with Dreyer's Grand Ice Cream to introduce Starbucks Coffee Ice Cream and

• the following year with Pepsi-Cola Company for its bottled Starbucks Frappuccino drinks.

Coffee Bean Sources

Starbucks Coffee

Starbucks Profit

Starbucks Chain

Starbucks Now

• Starbucks is the largest coffeehouse company in the world, with 16,635 stores in 49 countries,

• including 11,068 (6,764 Company Owned, 4,304 Franchised) in the United States,

• nearly 1,000 in Canada and • more than 800 in Japan.

The Controllable and Uncontrollable elements that Starbucks has

Encountered in Entering Global Markets.

Name of the country ElementControllable Uncontrollable

Japan 1.Competition among rival shops in Japan.2.Economic depression.

France Political and legal bindings. (France’s arcane regulations and generous labor benefits.

Italy Price (Italian coffee bars prosper by serving food as well as coffee, and area where Starbucks still struggle. Also Italian coffee is cheaper than US java say, Italian purists, much better. Americans pay about & 1.5 for an espresso, on the other hand northern Italy the price is 67 cents, in the South just 55 cents

Vienna Culture (young are always enthusiastic about new and they embrace the new. So, Starbucks will get positive advantages in expanding their business in Vienna compared to existing coffee shops there).

RISKS

Rising Prices of the commodities: Starbucks is heavily reliant on raw materials and a

spike in prices could dramatically narrow the company's profit margin.

Coffee: this higher-quality coffee often carries a substantial price premium, depending on market supply and buyer demand at the time of purchase

Dairy: Starbucks is a major consumer of dairy.

RISKSCannibalization The main risk Starbucks faces is its own

dominance – with starbucks in every corner of a street there is likelihood of cannibalization of sales from existing locations

Competition : Because of rising prices starbucks may lose customers to their less expensive competitors. McDonalds and Dunkin Brands sell coffee which is cheaper than that sold by starbucks.

RISKS

Health Concerns: Consumers’ awareness of the rise of obesity has caused some “would-be” starbucks customers to turn to their health options. Most of the beverages contain dairy, sugar and a good amount of caffeine.

Consumer Spending: The slowing U.S Economy is really having a negative effect on the business because people will be cutting down on their spending on luxuries like coffee.

SOLUTIONS

Starbucks must push to be the first mover.Innovate new products to stay ahead of

such competitive tactics.

SOLUTIONSShould become alert towards competitive marketWith the health concerns from the customers

Starbucks should look at healthier commodities like 2% and soy milk in many of its products

SOLUTIONS

Improved Advertising- Starbucks should step up its campaigns on promotions

Widens Target Market – the company should diversify its offerings and include the lower and the middle earners and also children.

Overall Corporate strategy of Starbucks

• Provide a great work environment and treat each other with respect and dignity.

• Embrace diversity as an essential component in the way we do business.

• Apply the highest standards of excellence to the purchasing, roasting and fresh delivery of our coffee.

• Develop enthusiastically satisfied customers all of the time.• Contribute positively to our communities and our

environment.• Recognize that profitability is essential to our future

success.

Starbucks in Japan• New shops attracted large crowds, but the effect wore

off as the market became saturated.• Japan was a success when they first opened new stores; – they need to research their customers and market to

find out the sudden change. – By being more aware of their customers and their

likes and dislikes – They will be able to find out what adjustments are

needed to become more successful.

Strategy for improving productivity in Japan

• The stores in Japan are similar to other Starbucks Coffee locations. At these new stores, well-trained, friendly baristas customize and serve a variety of Starbucks Coffee drinks to every patron, just like the stores in North America. In addition, Japanese customers are able to purchase Starbucks Coffee beans

• With the launch of Green tea Frapucinno, Starbucks had made a Big Hit in Japan market.• After rapidly building its brand in Japan over the last five years, Starbucks now needs to

adjust its approach.• While the average annual revenue per store has declined in Japan, Mr. Schultz said, ''it is still

significantly higher than in North America -- 60 percent higher.'’

Starbucks Experience• Comfortable setting to create positive and uplifting experience.• Inviting stores ambience.• Unique warmth that sets apart from “work” and “home” • Customized beverage order.• Emotional connection between Barista and customers• Most of Starbucks customers are not price sensitive.• Benefit from strong brand.• Be able to change more.• Less brand switching.• Prevented erosion in market share.

Order Starbucks Online• By finding the nearest

Starbucks nearest shop using GPRS

• Application use in iPhone

• Pay using Starbucks card barcode and no need swipe

• For now only can be use in USA

New Product Innovation • Starbucks Coffee Liqueur is the

company's most recent attempt to extend the iconic brand from the strip mall to bars and kitchens everywhere.

• The new Starbucks product is the result of a joint venture with Jim Beam Brands Co., makers of various spirits and wines

• Sold in 750 ml bottles, the packaging immediately conjures the three main elements at play: liquor, coffee and Starbucks

Conclusion

• Capitalism cause greed this prove by starbucks strategies all over US

• Low wage employee could lead to disaster because it will lead to high turn over

• Starbucks strategy by keeping prices in every country stay the same can lead to disastrous strategy

• Starbucks have to customize their marketing in different countries in order to keeping their sales