Starbucks Case Study
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This is a mini case on Starbucks. It takes you through a brief history, SWOT Analysis, 4Ps and the Marketing Strategies followed buy the company.
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Starbucks Case Study
- 2. FOUNDERS Jerry Baldwin Gordon BowkerZev Siegl
- 3. Schultz convinces the founders to bring Italian café culture to USA 1971 Howard Schultz joins Starbucks 1982 1984 First Starbucks Store (Seattle) 1987 Schultz acquires Starbucks with backing from investors 1992 Completes IPO 1993 272 Starbucks Locations 1995 676 Starbucks Locations and Starbucks Intl. formed 2003 6,604 Starbucks Locations. Acquired Seattle's Best Coffee Co. Starbucks has 24,464 stores today.
- 4. PEOPLE AROUND THE WORLD SPENT ON STARBUCKS LAST YEAR
- 5. MISSION “To inspire and nurture the human spirit – one person, one cup and one neighborhood at a time.” VISION “To establish Starbucks as the premier purveyor of the finest coffee in the world while maintaining our uncompromising principles while we grow.”
- 6. SWOT ANALYSIS Strength | Weakness | Opportunities | Threats High Quality Global Presence Brand Identity Store Ambience Higher Prices Small Product Mix Too many products Imitable products Expansion in Asian markets Diversification of product mix Partnerships Localization Competitive Market Uncertain Suppliers Imitation Saturated US market
- 7. TRENDS IN MARKETING PRACTICES
- 8. ACQUIRING Most of the acquisitions made by Starbucks are either to expand their business, or to improve the customer experience.
- 9. CUSTOMER PARTNERING Starbucks has always tried to partner with its customers and adapted with the times to try and provide a better experience. This includes giving better facilities at the stores and side products.
- 10. GLOBALIZING Starbucks is the world leader in the coffee business. Today, it has 24,464 stores in 6 continents and in 72 countries and territories.
- 11. Baristas, supervisors and managers (as well as those higher up, such as regional directors) are referred to as “Starbucks partners” (in other words, they’re more than “just” employees). Benefits extended to partners include stock options, health insurance and educational programs. In addition, on top of the periodic staff meetings held by the store manager, a special meeting (brainstorming and 'pep talk') is held, perhaps once a year, to help staff at the store level deal with issues such as stress. A very positive approach to dealing with partners.
- 12. MARKET SEGMENTATION Target Audience DEMOGRAPHIC : 18-45 year olds GEOGRAPHIC : Not specific PSYCHOGRAPHIC : People who think it is “cool” BEHAVIORAL : Office workers, Students (sleep- deprived)
- 13. CORPORATE SOCIAL RESPONSIBILITY CSR Community Ethical Sourcing Environment Starbuck’s social responsibility is based on three pillars.
- 14. 1. COMMUNITY • Starbucks develops community stores that partner with local nonprofits. Starbucks in turn donates $0.05 to $0.15 per transaction to the nonprofit partner. • Starbucks has pledged to hire at least 10,000 veterans and military by 2018, and focuses on diversity and inclusion in the workplace. • The company also provides training opportunities for youth in their communities, and has even developed the Starbucks Foundation, a 501c3 whose goal is to strengthen those communities further.
- 15. 2. ETHICAL SOURRCING • The company is committed to ensuring that their coffee, tea, cocoa, and manufactured goods are responsibly and ethically produced and purchased. • Of 396 million pounds of coffee Starbucks purchased in 2013, 95% was ethically sourced. • They only purchase those products from farms and manufacturers that adhere to a certain social, economic and environmental standards.
- 16. 3. ENVIRONMENT • Starbucks refers to the planet as their “most important business partner,” and takes a comprehensive approach to reducing their environmental impact. • To do this, they build LEED certified stores, are committed to recycling and conserving water and energy, and pursue strategies that address climate change on a global level. • Generally, Starbucks tries to be as environmentally friendly as possible in every aspect of their operations.
- 17. THE STARBUCKS FOUNDATION • The Starbucks Foundation was created as part of its commitment to strengthen communities. • It started in 1997 by funding literacy programs in the United States and Canada. • Today it is supporting communities around the globe. • The Starbucks Foundation gave $6.9 million in 2015, making 128 grants to nonprofit organizations. It spends on : • Opportunity for Youth • Community Service • Supporting Tea, Coffee and Cocoa communities • Access to Clean Water
- 18. STARBUCKS When you choose to buy (RED), a portion of the profits goes directly to the Global Fund and is invested in HIV/AIDS programs in Africa. Starbucks has deep relationships with many coffee growing communities in Africa. One way they support their global communities is through their eight-year partnership with (RED). They have contributed more than $14 million till now. All donations generated through (STARBUCKS)RED campaigns have gone to the Global Fund to help finance HIV/AIDS prevention, education and treatment programs. RED.ORG #endofAIDS
- 19. CONCLUSIONS Starbucks has a well established product line, customer experience and supply chain. But the biggest reason for its success has probably been its activities outside Starbucks decided to invest in its people and the communities they work with. When a company puts people first, and focuses on making positive changes for the communities they work with and serve, consumers notice. Because of the positive image of the company, they see less turnover and customers become advocates of the company. Thoughtful CSR programs aren’t just PR stunts or a show for investors, and companies like Starbucks, that are really succeeding, are proof that these programs can be hugely impactful if implemented well.
- 20. SUMMARY
- 21. DISCLAIMER This presentation is prepared by Vishrut Shah ( BITS Pilani, Pilani Campus) as part of a summer internship under Prof. Sameer Mathur (IIM Lucknow) Vishrut Shah Prof. Sameer Mathur