STARBUCKS

SHUBHADIP BISWASPGDM10-12IILM-GSM

HISTORY

Jerry Baldwin, Zev Siegl, and Gordon Bowker--FOUNDERS OF STARBUCKS-1971

IT USED 2 BE A RETAILER HOWARD SCHULTZ STARTED HIS CAREER AS

ASALESMAN IN SWEDISH KITCHENWARE 1982—HE BEGAN HIS JOURNEY WITH

STARBUCK 1983-ON A BUSINESS TRIP TO MILAN—HE SAW

AN EXPRESSO BAR WITH DIFFERENT CONCEPT

HISTORY

HE LOVED IT----IT WAS A WARM COMMUNITY EXPERIENCE

HE PROPOSED THE IDEA ------BOARD OF DIRECTORS REJECTED IT

HE LEFT STARBUCKS & OPENED HIS OWN COFFEE BAR COMPANY—II GIORNALLE

1987—HOWARD BOUGHT STARBULKS FROM THAT TIME TO NOW ON STARBULKS IS

MOST POPULAR COFFEE BRAND WORLDWIDE—FOR ITS FAMOUS FRESH BREWED COFFEE

COFFEE INDUSTRY ANALYSIS

BASIC COFFEE SPECIALTY COFFEE---HIGHER

QUALITY COFFEEGROWING IN 7% ANNUAL GROWTH

RATE

COFFEE INDUSTRY ANALYSIS

COFFEE SHOPS MAKE UP THE FASTEST GROWING PART OF THE RESTAURANT BUSINESS, CHECKING IN WITH A 7% ANNUAL GROWTH RATE!

WORLD COFFEE PRODUCTION IS ESTIMATED AT 110 - 120 MILLION BAGS PER YEAR

14 BILLION ESPRESSO COFFEES ARE CONSUMED EACH YEAR IN ITALY, REACHING OVER 200,000 COFFEE BARS, AND STILL GROWING

AMERICANS CONSUME 400 MILLION CUPS OF COFFEE PER DAY, OR EQUIVALENT TO 146,000,000,000 (146 BILLION) CUPS OF COFFEE PER YEAR; MAKING THE UNITED STATES THE LEADING CONSUMER OF COFFEE IN THE WORLD.

COFFEE INDUSTRY ANALYSIS

THE NATIONAL COFFEE ASSOCIATION ESTIMATES THAT THE US COFFEE MARKET WILL REACH $29 BILLION IN 2011

STARBUCKS ALREADY HAS A PRESENCE IN CHINA, BUT THE INDIAN MARKET REMAINS LARGELY UNTAPPED. RECENTLY, STARBUCKS ENTERED INTO A PARTNERSHIP WITH TATA COFFEE ,THE NATION'S BIGGEST COFFEE PRODUCER TO HELP TAP THE COUNTRY WHERE COFFEE CONSUMPTION HAS INCREASED BY 89% IN THE PAST 13 YEARS.

CURRENTLY ONLY 22% OF URBAN YOUTH GO TO CAFES, AND ACCORDING TO CAFE COFFEE DAY EXECUTIVES, THE INDIAN MARKET HAS THE POTENTIAL TO HOUSE UP TO 5,400 CAFES. CURRENTLY LESS THAN ONE-THIRD OF THOSE CAFES EXIST.

.

CURRENT SCENARIO

STARBUCKS IS THE LARGEST COFFEEHOUSE COMPANY IN THE WORLD, WITH 17,009 STORES IN 50 COUNTRIES, INCLUDING OVER 11,000 IN THE UNITED STATES, OVER 1000 IN CANADA, AND OVER 700 IN THE UK.

STARBUCKS SELLS DRIP BREWED COFFEE, ESPRESSO-BASED HOT DRINKS, OTHER HOT AND COLD DRINKS, COFFEE BEANS, SALADS, HOT AND COLD SANDWICHES AND PANINI, PASTRIES, SNACKS, AND ITEMS SUCH AS MUGS AND TUMBLERS.

SBUX.O$36.72-0.14-0.38%

CURRENT SCENARIO

THROUGH THE STARBUCKS ENTERTAINMENT DIVISION AND HEAR MUSIC BRAND, THE COMPANY ALSO MARKETS BOOKS, MUSIC AND FILM.

STARBUCKS POSTED EARNINGS OF 399.3 MILLION OR $0.37 EPS, UP 86% COMPARED TO $199.4 MILLION FROM SAME QUARTER LAST YEAR. THIS FIGURE BEAT ANALYST ESTIMATES OF $0.32 EPS.[SALES ALSO ROSE 17% TO 2.8 BILLION AS COMPARABLE STORE SALES ADDED 8% IN DOMESTIC MARKETS.

REVENUE GROWTH OF STARBUCK

PESTEL ANALYSIS

POLITICAL-HIGH TARIFF AFFECTS STARBUCKS

PRODUCTION,ABILITY TO SOURCING BEST COFFEE BEANS

ECONOMICAL-1.HIGHER EXCHANGE RATE---MOST OF SUPPLIERS OF

STARBUCKS ARE EXTERNAL---RESULT=INCURRING HIGHER COST--

COFFE MAKING IS BEING EXPENSIVE WAYOUT---EXTRA COST TO CONSUMER??OR MAKING LESS PROFIT??

PESTEL ANALYSIS

2.INCOME DISTRIBUTION OF CONSUMER—AFTER THE ECONOMIC CRISIS,2007

UNEMPLOYMENT FIGURES ROSE.PEOPLE WHO WERE ABLE TO CONSUME

STARBUCKS’ EXPENSIVE SPECIALTY COFFEE NOW SAW IT AS A LUXURY IN SOME LOCATION.

RESULT=SUDDEN DROP IN SALES VOLUME,2009

PESTEL ANALYSIS

SOCIAL ISSUE-1.CHANGING TASTE—USA IS CONSUMING MORE

SPECIALTY COFFEE—IMPORT OF 1.3 BILLION IN 2010 INDIA ,CHINA---PEOPLE PREFER TEA. SO DIFFICULTY IN

IMPLEMENTATION OF STRATEGY-AMERICANISATION IN DEVELOPING COUNTRIES.

2.HEALTH CONSCIOUSNESS-NEED TO INTRODUCE NEW HEALTHY ALTERNATIVESNORTH AMERICANS ARE REPLACING ALCHOHOL WITH

COFFEE3.COFFEE BARS—A PLACE FOR MEETING,A PLACE OF

RECREATION

PESTEL ANALYSIS

TECHONOLOGY— STARBUCKS FOR PROMOTING BAND

GLOBALLY—USING SOCIAL NETWORKING SITES

IMPLEMENTED NEW PHONE PAYMENT SYSTEM

STARBUCKS CARD—ONLINE PAYMENT—IT ALSO HELPS TO INCREASE CUSTOMER LOYALITY

PESTEL ANALYSIS

ENVIRONMENTAL- COFFEE HARVES IS DEPENDENT ON

WEATHER CONDITIONS,HEALTH OF COFFEE TREES,HARVESTING PRACTICES,DISEASE AND INFECTION CAUSED BY INSECTS

OPPORTUNITIES AND THREAT--

OPPORTUNITIES--- ENTRY INTO NEW MARKETS GROWTH IN COFFEE MARKETTHREATS—COMPETITION WITH MCDONALD, CARIBOU

COFFEE AND PEET'S COFFEE IN THE BROADER MARKET FOR SPECIALTY COFFEE. THEY ARE SELLING GOOD COFFEE FOR BETTER VALUE

PREVIOUSLY-SECOND CUP---GROWTH OF SECOND CUP WAS A HEADACHE.

INTERNAL ANALYSISSTRENGTH AND WEAKNESS--

STRENGHTH—1.BRAND IMAGE2.STRATEGY TO CAPTURE KEY

LOCATIONSAND OPENING STORES3.ROASTING TECHNOLOGY4.VALUED AND MOTIVATED

PARTNERS[EMPLYEES]

INTERNAL ANALYSISSTRENGTH AND WEAKNESS--

WEAKNESS—1.AGGRESSIVE EXPANSION WITHOUT PROPER INFRASTRUCTURE– IS

STARBUCKS THERE??ANS—NORESULT=PUT A STARBUCKS THERE.QUESTION ARISES-----QUALITY VS VOLUME2.STARBUCKS HAS NOT FOCUSED ON ITS PRODUCT DIFFERENTIATION

OBJECTIVES3.PROBLEM IN DISTRIBUTION CHANNEL-STARBUCKS HAS CHARGED THAT KRAFT'S ALLEGED NEGLECT AND

MISMANAGEMENT OF THE BUSINESS -- WHICH BRINGS IN ABOUT $500 MILLION IN ANNUAL SALES.

THE WORLD'S BIGGEST COFFEE CHAIN WANTS TO END THE PARTNERSHIP ON MARCH 1 AND REPLACE KRAFT WITH PRIVATELY HELD ACOSTA INC.

LARGEST PUBLICLY TRADED FOOD SERVICE COMPETITORS-----FY 2009company revenues Net

incomeNet margin

restaurants

franchised

mcdonald $22745 $4551 20% 32478 81%

Yum brands

$10836 $1083 10% 37000

starbucks $9775 $391 4% 16635 0%

Darden restaurant

$7218 $372 5.2% 1773

Brinker international

$3621 $79 2.2% 1689 40%

Wendy international

$3581 $4 0.1% 6451 80%

Burger king holdings

$2537 $200 7.9% 11925 88%

Jack in the box

$2471 $131 5.3% 2212 46%

Cke restaurants

$1419 $48 3.4% 3141 71%

COMPETENCIES OF STARBUCKS--

ROASTING TECHNOLOGY VALVE TECHNOLOGY VALUE AND MOTIVATED PARTNERS REAL ESTATE APPROACH BAND IMAGE QUALITY EFFICIENT SUPPLY CHAIN SYSTEM

CORE COMPETENCIES

ROASTING TECHNOLOGY BRAND IMAGE

MARKETING STRATEGY

THE GLOBAL ECONOMY CONTINUES ITS RECOVERY, STARBUCKS IS PLANNING TO OPEN AN AVERAGE OF MORE THAN ONE STORE EACH DAY.

ACQUISITION- APRIL 2003, STARBUCKS COMPLETED THE PURCHASE OF

SEATTLE'S BEST COFFEE AND TORREFAZIONE ITALIA FROM AFC ENTERPRISES

1998-tazo tea company ; 1999-hear music;2008-cloverPARTNERSHIP- UNITED AIRLINES NORDSTORM BARNES AND NOBLE BOOK STORE

MARKETING STRATEGY

PEPSICO PRICECOSTCO RED HOOK BREWERIES DREYER’S ICE CREAM ARAMARK APPLE TATA COFFEE Acosta Inc

STARBUCK STRATEGY

RESULT OF SWOT ANALYSIS--

1.STARBUCKS AGGRESSIVE GROWTH STRATEGY HAS MADE IT DIFFICULT TO DELIVER

CONSISTENTLY HIGH QUALITY PRODUCTS AND SUPERIOR CUSTOMER SERVICE WORLDWIDE.

2.STARBUCKS NEEDS TO REFOCUS ON THE PRODUCT DIFFERENTIATION STRATEGY RATHER THAN EXPANDING.

3.MARKET PENETRATION WILL NOT BE A PROBLEM IF STARBUCKS CREATES PROPER INFRASTRACTURE GLOBALLY.