CHARLES BONGRAIN - CAMILLE LESAGEFREDERIC MONTOIR – XXX XXX
STARBUCKS
IT IS NOT JUST COFFEE, IT IS STARBUCKS COFFEE
I. HISTORY OF STARBUCKS II. STARBUCKS CUSTOMERSIII. STARBUCKS IN THE WORLDIV. SWOT ANALYSISV. MARKETING MIXVI. STARBUCKS IN KOREAVII.CONCLUSION
CONTENT
STARBUCKS NAME
MOBY DICK
BALDWIN – BOWKER – SIEGL
SEATTLE, 1971 - FIRST STARBUCKS
58 years old
Grew up poor
His father had a hard life
Excelled at sports and won an athletics scholarship
Graduated in Business & Marketing
Joined Starbucks Company in 1982 as Diector of Marketing
HOWARD SCHULTZ – CEO OF STARBUCKS
1983 he went on a trip in Milan:Coffee bars existed on
every street200.000 in the countryServed as meeting places
His idea: bring the Italian coffeehouse tradition back to the United States
The pilot coffee concept was successful but the owners refused to develop the concept
HOWARD SCHULTZ – VISION OF A CEO
1985: Started his own coffeehouse: Il Giornale Coffee
1987: purchased Starbucks Coffee (6 stores)
Renamed Il Giornale Coffee with the Starbucks name
Expended aggressively first across the United States and then around the world
HOWARD SCHULTZ – VISION OF A CEO
HOWARD SCHULTZ – HIS PHILOSOPHY
2008: regained his status as a CEO of Starbucks
Co-authored: “Pour Your Heart Into It”
“Starbucks may become another soulless big chain”
HOWARD SCHULTZ – HIS FEAR
2009: 616 US Starbucks Coffee closed1/3 of the headquarters employees were fired2000 jobs lost
TOO MANY STORES…TOO EXPENSIVE
2011 - STARBUCKS NEW LOGO
HOWARD SCHULTZ – THE NEW LOGO
STARBUCKS TODAY
15.000+ STORES
50 COUNTRIES
1st ROASTER AND RETAILER
18-45 year olds
Youngsters who want to gather with their friends
Office workers and students who need to catch up
with their work
Those who feel that drinking coffee is "cool"
People who are adventurous, willing to try new things
TARGET
Egypt
South Africa
STARBUCKS IN AFRICA
2 / 52 - (4%)
EAST ASIA• China• Hong Kong• Macau• Japan• South Korea• Taiwan
SOUTH EAST ASIA• Indonesia• Malaysia• Philippines• Singapore• Thailand
STARBUCKS IN ASIA
NORTHEN ASIA• Russia
WESTERN ASIA• Armenia• Barhain• Cyprus• Jordan• Lebanon• Kuwait• Oman• Quatar• Saudi Arabia• Turkey• United Arab Emirates23 / 44 - (52%)
NORTH AMERICA (100%)• Canada• USA• Mexico• Puerto Rico
CENTRAL AMERICA (3/52 - 14%)• Aruba• Bahamas• El Salvador
• SOUTH AMERICA (4/10 - 40%)• Argentina• Brazil• Chile• Peru
STARBUCKS IN THE AMERICAS
• Austria
• Belgium
• Bulgaria
• Czech Republic
• Denmark
• France
• Germany
• Greece
• Hungary
STARBUCKS IN THE EUROPE
• Ireland
• Netherlands
• Poland
• Portugal
• Romania
• Spain
• Sweden
• Switzerland
• UK
18 / 37 – (49%)
Australia
New Zealand
STARBUCKS IN OCEANIA
2 / 9 – (22%)
AN ADAPTATION STRATEGY
Names are translated into local languages
• South Korea: 스타벅스 (transliteration: seutabeokseu)• Arabic-speaking countries: ستاربكس (transliteration: stārbaks)• Bulgaria: Старбъкс (transliteration: Starbâks)
AN ADAPTATION STRATEGY
Adapting their products
•Different muffin flavours, different cheesecakes
AN ADAPTATION STRATEGY
Adapting to their markets
• Products launched in limited international markets.• Sold in supermarkets and convenience stores
STARBUCKS FAILURES
2003: Starbucks closed all six of its locations in Israel due to difficult business environment
2007: closed its store in Beijing's Forbidden City2008: closed 61 of its 84 stores in Australia:
Starbucks failed to truly understand Australia’s cafe culture.
STARBUCKS FAILURES – ONLINE PETITIONS
“The Forbidden City is a symbol of China’s cultural heritage. Starbucks is a symbol of lower middle class culture in the West. We need to embrace the world but we also need to preserve our cultural identity.There is a fine line between globalization and contamination. But please don’t interprete this as an act of nationalism. It is just about us Chinese people respecting ourselves. I actually like drinking Starbucks coffee. I am just against having one in the Forbidden City”.
Product diversificationEstablished logo, developed brand, copyrights,
trademarks, website and patentsCompany operated retail storesInternational presenceValued and motivated employees, good working
environment
STRENGHTS (1/2)
STRENGHTS (2/2)
Good relationships with suppliers
Industry market leaderCustomer loyaltyWide spread and consistentKnowledge basedStrong BoardTrendy brand imageStrong financial foundation
Lack of internal focus (too much focused on expansion)
Cross functional managementProduct pricing is high
WEAKNESSES
Competition (restaurants, street carts, supermarkets, other coffee shops, other caffeine based products)
Market saturationCoffee price volatility in developing countriesNegative publicity from poorly treated farmers in
supplying countries
THREATS (1/2)
THREATS (2/2)
Consumer trends toward more healthy ways and away from sweet coffee beverages and cakes
Cultural and Political issues in foreign countries
Expansion into retail operations
Technological advancesNew distribution
channels (delivery)New productsDistribution agreementsBrand extensionEmerging international
marketsContinued domestic
expansion/domination of segment
OPPORTUNITIES
• Espresso beverages Caffe latte, Caffe Mocha, Caramel
machiato… Iced caffe Latte, Iced vanilla Latte…
• Frapuccino Coffee base, cream base and tea base
• Coffee and tea Hot chocolate, soya milk, tea
• Food Cookies, muffins, salads, sandwiches, coffee
bags…• Equipment: mugs, coffee machines…
STARBUCK’S PRODUCT RANGE
DepthLenght
Width
PRICE
COMPARATIVE VALUES OF STARBUCKS’ CAFFE LATTE
Towns & countries Price of a tall caffe Latte (€ and won)
Price of lunch in the neighbourhood
Paris, France3,70€
5880 KRW14€
22240 KRW
Dubai, UAE2,85€
4530 KRW5,70€
9050 KRW
Seoul, South Korea
2,40€3800 KRW
3,15€5000 KRW
PLACE: A PLACE FOR AMBIENCE & EXPERIENCE
Warmth, Comfort, Diversity
A place of quiet contemplation
Some kind of neighbourhood office
A gathering place for neighbours and friends
PLACE: A PLACE FOR AMBIENCE & EXPERIENCE
Friendly baristas Customized
beverages
PROMOTION: ADVERTISING
STARBUCKS DOUBLE SHOT ESPRESSO
PROMOTION: ADVERTISING
STARBUCKS FRAPUCCIONO COFFEE DRINKStaring Michael Bublé
PROMOTION: PRODUCT PLACEMENT
STARBUCKS IN MOVIES
The devil wears Prada
PROMOTION: PRODUCT PLACEMENT
STARBUCKS IN MOVIES
Meet The Fockers 4
PROMOTION: PRODUCT PLACEMENT
STARBUCKS IN MOVIES
Fight Club
PROMOTION: DIRECT MARKETING
SNS
SNS
PROMOTION: COMMITMENT TO THE WORLD
Environmental
impact
Creating “Grounds for
your Garden”
Using recycled materials:
ranked 15 on the
U.S. Environmental
Protection Agency’s list of
Top 25 Green Power
Partners
PROMOTION: COMMITMENT TO THE WORLD
Fair trade
Largest buyer of Certified Fair Trade coffee in North
America (10% of the global market)
Starbucks has given the FTC label greater visibility,
helping to raise consumer awareness in the process.
Payes above market prices for all of its coffee
Opens farmer support centers in Africa
PROMOTION: COMMITMENT TO THE WORLD
PROMOTION: COMMITMENT TO THE WORLD
Ethos water
Ethos bottles feature prominent
labeling stating "helping
children get clean water”
$.05 from each $1.80 bottle sold is
used to fund clean water projects
in under-developed areas.
Sales have raised over $6,200,000
PROMOTION: COMMITMENT TO THE WORLD
Product (red)
Raise awareness and funds to help eliminate AIDS in
Africa.
Starbucks’ Red products and Red card:
PROMOTION: COMMITMENT TO THE WORLD
Helping countries after natural disasters
STARBUCKS IN KOREA
Starbucks entered the Korean market in 1999
DUNKIN DONUTS
AMERICAN COMPANY
THE COFFEE BEAN AND TEA LEAF
AMERICAN COMPANY
CAFFEE PASCUCCI
ITALIAN COMPANY
CAFFE BENE
KOREAN COMPANY
ANGEL-IN-US COFFEE
KOREAN COMPANY
SEVEN MONKEYS COFFEE
KOREAN COMPANY
EDIYA COFFEE
KOREAN COMPANY
HOLLYS COFFEE
KOREAN COMPANY
TOM N TOM COFFEE
KOREAN COMPANY
NUMBER OF STORES IN KOREA
Caffebene Ediya Angel-in-us Starbucks0
100
200
300
400
500
600
PRICE COMPARAISONS
Size(ml) Americano Caffe Latte Caffe Mocha or mocha latte
Starbucks
Short(237) 2800 3300 3800Tall(335) 3300 3800 4300
Grande(473) 3800 4300 4800
Coffee bean Small(335) 4000 4500 5000
Regular(473) 4500 5000 5500
Angel-in-us Small(335) 3300 3800 4500
Regular(473) 3800 4300 5000
Caffebene 4000 4500 5000Pascucci Short(260) 3800 4000 4500
Seven monkeys Regular 3500 4000 4500
Ediya Regular 2500 2800 3000
Hollys Small(335) 3200 3700 4200
Regular(473) 3700 4200 4700
Dunkin donuts Small(300) 2000 2500 2500
Tom n toms Tall(335) 3300 3800 4100
Large(473) 3700 4100 4600
PRICE COMPARAISONS
Prices per 100ml (won)
Americano Caffe latte Caffe mocha
Pascucci 1461.54 1538.46 1730.77
Coffee bean 951.37 1057.08 1162.79
Starbucks 803.38 909.09 1014.80
Angel-in-us 803.38 909.09 1057.08
Tom n Toms 782.24 866.81 972.52
Hollys 782.24 887.95 993.66
Dunkin Donuts 666.67 833.33 833.33
Number of stores 529 339
Sales(million won)
102,256 242,133
Net profit (million wons)
11,225(14.8%) 16,853(9.3%)
Management 100% Direct
mgmtMostly franchise
MenuFocus on bever-
ageFocus on dessert
CAFFE BENE AND STARBUCKS’S STRATEGIES
Global company
Howard Schultz: Geocentric Orientation
Adaptation Strategy
Globally Successful
Future Oriented
IT IS NOT JUST COFFEE, IT IS STARBUCKS COFFEE
STARBUCKS TODAY
THANK
YOU