STARBUCKSPresented by:

Mahwish ShaikhAhsan ali Kehar Mehrunisa ShaikhZehra Shoro Rehan ali kango

Assigned by:Sir Abdul Salam

Content History Vision Mission Coffee War Marketing External factor

evaluation(EFE) matrix

Competitive profile (CPM) matrix

Michael Porters five forces

Internal Factor Evaluation

Swot matrix Bcg Matrix Internal External

Matrix

Grand Strategy Matrix The Quantitative

Strategic Planning Matrix (QSPM)

Conclusion

ZEHRA SHORO

Vision And Mission

– Vision statement

To establish Starbucks as the premier purveyor of the finest coffee in the world while maintaining our uncompromising principles while we grow.

– Mission statement: To inspire & nurture the human spirit , one person, one cup, and 1 neighborhood at a time.

History

– Starbucks was founded in 31st march 1971 in Seattle Washington

– After the success of 1 store the second store was opened in 1972 in university village Washington.

– In 10 years business expanded to 5 new stores

– In 1982 Howard Schultz joined the team and in 1987 he purchased Starbucks from the owners.

– Starbucks experienced its first setback in 2002 when its Japanese operations posted a $3.9 million loss.

– In 2007 when the economic recession hit the world and MacDonald's entered the coffee business.

Coffee war

Company Franchise store worldwide

Marketing

– Starbucks strives to elevate the simple task of coffee to a new level.– Starbucks also provide electrical outlets and in some stores wireless

access.– Starbucks also introduced their Starbucks’ cards .– Starbucks relies on its image advertising than traditional advertising .– Starbucks also encourages the use of their website where customers

are able to register their Starbucks’ cards , get nutrition information about Starbucks, shop online, search for careers and much more.

Competition

MAHWISH SHAIKH

External factor evaluation(EFE) matrix

S. No Key external factors Weight Rating Weighted score

Opportunities1 People demand products which are free from artificial flavors and healthy, more focus on

healthy and hygienic products.20 4

0.82 High demand of mixed Lipton tea in Middle east and south Asia .10 2

0.33 Demand of product line addition .05 4 0.24 Building customer relationships .10 3 0.25 Globally Expansion .05 3 0.15THREATS1 Low price of competitors .20 4 0.82 Increase of private café and stores .15 3 0.453 Changing Consumer tastes and lifestyle choices .10 2.5 0.3754 Market saturation in developed countries .05 4 0.2TOTAL 1.0 3.475

Interpretation: Starbucks is doing good in industry as their EFE is more and above average as their result is 3.475

Competitive profile (CPM) matrix Starbucks Caribou coffee Dunkin donuts

Critical success factor Weight Rating Weight score Weight Rating Weight score Weight Rating Weight score

brand image 0.2 3 0.8 0.15 3 0.45 0.1 2 0.2

Product differentiation 0.1 4 0.4 0.2 3 0.6 0.15 3 0.45

Advertising 0.05 3 0.15 0.1 4 0.4 0.1 3 0.3

Price competitiveness 0.15 3 0.45 0.05 3 0.15 0.2 2 0.4

Financial position 0.15 3 0.45 0.05 2 0.1 0.1 1 0.1

Customer loyalty 0.05 3 0.15 0.1 1 0.1 0.05 3 0.15

Global expansion 0.2 2 0.4 0.15 1 0.15 0.2 4 0.8

Customer service 0.1 4 0.4 0.2 2 0.4 0.1 2 0.2

1 3.2 1 2.35 1 2.6

Interpretation: In competitive profile matrix Starbucks weighted score is 3.2 so its performance is better than competitors.

Michael Porters five forcesCompetitive rivalry or competition

Very strong

There is less differentiation of product because coffee and snacks are offered by many other brands

Bargaining power of buyers or customers

Very Strong

They have power to switch to other brands

Bargaining power of suppliers Very Strong

They have power if the number of suppliers are low in an industry, Starbucks relies heavily on finest quality of beans

Threat of substitutes or substitution

strong because substitute product price is lower.

Threat of new entrants or new entry

Strong There are lots of new brands opening, with this new entrant are coming with the innovative ideas, and mostly local shops are entering in the market with low cost and great quality

Interpretation: Starbucks has been strong in all five forces within the completion and industry

AHSAN ALI KEHAR

Internal Factor Evaluationkey internal Factors weight Rating Weighted

ScoreStrengths

1 Internationally recognized brand 0.1 4 0.42 Convenient 0.07 4 0.283 great working environment 0.05 3 0.154 Employee excellence 0.1 4 0.45 R&D department 0.05 3 0.156 Strong brand image and essence 0.03 3 0.097 high standards services 0.1 4 0.48 wireless access, website, Starbucks cards, online services, nutritional information.' 0.1 3 0.3

9 Variety of flavorsTotal 0.6 2.17

Weakness1 Overdependence in the United States market 0.1 2 0.22 Low market share globally 0.05 1 0.053 Expensive Products 0.1 2 0.24 Sustainability 0.1 2 0.25 Less advertising and marketing of their products 0.02 1 0.026 Risky investments in more locations 0.03 0TOTAL 0.4 0.67NET TOTAL 1 2.84

SWOT MATRIX

Strength-Opportunities– Increase expansion in continental market with its

strong brand image (S1, O5)

– Try to explore and utilize their R&D department with some more products in beverages as demanded by customers locally and globally.

– (S5, O2)

– by constantly introducing new variety of flavors in their products and expanding their product line and giving maximum value to customer. They can build good and strong relationship with customers. (s9, O4)

Weakness-Opportunities• As Starbucks is over dependent in united

states they should expand their market to other countries as well (w1, O5)• As their products are so expensive they

should expand their product line with low cost products for middle and lower middle class (W3, O3)

SWOT MATRIX

Strength-Threats– One of the major threats that Starbucks

could face is against its competitors. For this purpose, Starbucks should work through their strengths and give high standard services to the customers. (S7, T1)

– With the threat of market saturation in developed countries Starbucks with strong brand image can move to other countries and earn more revenue. (S6, T4)

Weakness-Threats• As Starbucks is more dependent on

some of their products in united states. They should extend their product line with Changing Consumer tastes and lifestyle choices in other countries. (W1, T3)• To avoid the threat of low price

competitors they should increase their sustainability in the market by doing different things (W4. T1)

KANGO, REHAN ALI

Space Matrix

Space MatrixFinancial Position Rating1 Star bucks ROA is 5.56% +22 Star bucks ROE is 12.66% +43 Star Bucks Revenue Decreased to 7% +14 Star bucks Net Income Decreased 72% +1Total 8

Industry Position Rating1 Star bucks stores available in multiple countries to reach out the maximum

customers+6

2 Star bucks is also having advantage of selling retail products +33 Star Bucks can gain advantage of providing healthy and organic drinks +3 Total +9

Stability Position Rating1 Starbucks prices are very high as compare to other rivals, they should at least

come closer with the rival’s prices-5

2 Star bucks retail products demand should be increased and provide knowledge about using the coffee machines and brewing the beans

-4

3 Star Bucks should increase in the Research and Development sector in order to bring some new recipe

-4

Total -13

Competitive Position Rating1 Star bucks provides the premium coffee and its beans -12 Star bucks is providing WIFI and Electric sockets so that even working class can

feel at ease-2

3 Starbucks consider employees its partners -2Total -5

Space Matrix

• SP Average is -13.0 ÷ 3 = -4.33 • IP Average is +9 ÷ 3 = 3• CP Average is -5 ÷ 3 = -1.66 • FP Average is +8.0 ÷ 4 = 2• Directional Vector Coordinates:• x-axis: -1.66 + (+3.) = +1.34• y-axis: -4.33 + (+2) = -2.33

Bcg Matrix

• Market Growth:10.32%• Market Share: 1.32%

Interpretation: By analyzing the competitors given in the case study we found out that Starbucks has the market share of 1.32% which is excellent.

• market penetration• market development, • product development

HIGH

HIGH

LOW

LOW

MEHRUNISA SHAIKH

Internal External Matrix

Interpretation: Starbucks Corporation has lay in Grow and Build. According to its (IFE) weighted score is 2.84 and (EFE) weighted score is 3.475. Starbucks has focused on Backward, Forward and market penetration, market Development and should have Product Development

Grand Strategy Matrix

Interpretation: Starbucks has lay in Quadrant (I) because Starbucks Market growth is 10% and its Competitive position is strong.

The Quantitative Strategic Planning Matrix (QSPM)

Key Factors Weight AS TAS As TASS. No OPPORTUNITIES1 People demand products which are free from artificial

flavors and healthy, more focus on healthy and hygienic products

.20 1 0.2 4 0.8

2 High demand of mixed Lipton tea in Middle east and south Asia

.10 1 0.2 3 0.3

3 Demand of product line addition .05 3 .15 4 0.24 Building customer relationships .10 1 0.1 1 0.15 Expansion of market share to other countries .05 1 0.05 1 0.5 THREATS1 Low price of competitors .20 4 0.5 1 0.22 Increase of private café and stores .15 - - - 3 Changing Consumer tastes and lifestyle choices .10 1 .10 2 0.24 Market saturation in developed countries .05 1 0.05 1 0.05

Total 1 STRENGTH1 internationally recognized brand 0.1 - - - -2 Convenient 0.07 - - - -3 great working environment 0.05 - - - -4 Employee excellence 0.1 - - - -5 R&D department 0.05 2 0.1 3 .156 Strong brand image and essence 0.03 1 0.03 1 0.037 high standards services 0.1 - - - -

8 wireless access, website, Starbucks cards, online services, nutritional information.'

0.1 - - - -

9 Variety of flavors 0.1 - - 4 - WEAKNESS1 Overdependence in the United States market 0.1 - - - -2 Low market share globally 0.05 1 0.05 1 .053 Expensive Products 0.1 4 0.4 2 0.24 Sustainability 0.1 1 0.1 1 0.15 Less advertising and marketing of their products 0.02 - - - -6 Risky investments in more locations 0.03 - - - -

Total 1 2.03 2.68

• There are two alternative strategies which Starbucks need to consider• (1) To reduce the prices Strategy • (2) Expand the shelf items• According to the sum of total

attractiveness we analysis that strategy 2 with Attractive score of 2.63 indicates that Starbucks need to increase its shelf item by introducing new items.

Conclusion

• We found out that Starbucks is performing averagely in the industry because there is lots of competition and rivals are doing price wars to overcome the Starbucks. Star bucks need to increase product line in order to gain advantage in the industry.

THANK YOU..