Case # 5: Starbucks Coffee

company

Team Members

Starbucks

07/31/2015

Table of Contents

Introduction
Vision Statement
Mission Statement (1990-2008)
EFE matrix
IFE matrix
CPM matrix
SWOT matrix
SPACE matrix
IE matrix
GRAND STRATEGY matrix
BCG matrix
Action Plan & Recommendations
Starbucks
07/31/2015

History
First Starbucks opened in Seattle
Washington
March 30, 1971
Jerry Baldwin-English Teacher
Gordon Bowker-Writer
Zev Siegh History Teacher

Starbucks
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CONTINUE
Entrepreneur Howard Schultz joined the
company in 1982
Director of Retail Operations and
Marketing
Idea of selling beverages

Starbucks
07/31/2011

CONTINUE
April, 1984 first store to sell beverages
was opened
Served 400 customers over the 250
customer average at their best store
II Giornale Acquires Starbucks
Howard Schultz Starbucks President and
CEO

Starbucks
10/31/2011

CONTINUE
World's premier roaster and retailer of
specialty coffee
8,812 company-owned stores
7,852 licensed stores in more than 50
countries

Starbucks
10/31/2011

CONTINUE
Annual sales of about $10 billion as of
April 2010
Sell : beverages, pastries, whole bean
coffee, ground coffee, and coffee-related
products

Starbucks
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VISION STATEMENT
To inspire and nurture the
human spirit one person,
one
cup
and
one
neighborhood at a time.

Starbucks
07/31/2015

Mission Statement
1990 October 2008

Establish Starbucks as the premier

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

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Starbucks

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Starbucks

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Competition

Starbucks
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EXTERNAL FACTOR
EVALUATION

Starbucks
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External Factors Evaluation

(EFE Matrix)

Weigh
Ratin
t
g

Weight
ed
Score

Opportunities
International Markets

.10

.10

Global expentipion

.11

.44

Long-term Industry Growth

.10

.30

New product mix

.09

.36

Purchasing companies

.10

.10

Strong financial support

.12

.48

Terrorist Attacks & Safety issue

.11

.33

New entrants

.09

.36

Government Regulations

.10

.30

US market saturation

.08

.24

Threats

TOTAL

1.00

3.01

INTERNAL FACROR
EVALUATION

Starbucks
07/31/2015

Internal Factor Evaluation

(IFE Matrix)
Strengths

Weigh Rating Weighte

d Score
t

Innovation

.11

.44

Global presence

.12

.48

Profitability

.06

.18

Brand Recognition

.10

.40

Store ambience

.12

.48

High market share and market

growth

.06

.18

Limited number of strong

competitors

.06

.18

.08

.32

High employee turnover

.10

.10

High prices

.06

.12

Over dependence on US markets

.05

.10

High quality customers service

Weaknesses

COMPETITIVE PROFILE
MATRIX

Starbucks
07/31/2015

(CPM)

Starbucks

McDonalds

Critical Success
Factor

Weigh Ratin
t
g

Product Quality

0.10

Advertising

0.14

Product Variety

0.12

Price
Competitivenes
Customer Loyalty

0.15

0.17

Global Expansion

0.12

Customer Service

0.11

Financial Position

0.09

Total

1.00

Scor
e

0.3
0
0.4
2
0.3
6
0.4
5
0.6
8
0.4
8
0.3
3
0.1
8
3.2
0

Dunkin Donuts
Ratin
g
2
2
3
3
3
3
3
3

Scor
e

Ratin
g

Score

0.2
0
0.2

0.20

0.42

8
0.3
6
0.4

0.36

0.45

5
0.5
1
0.3

0.68

0.36

6
0.3
3
0.2

0.33

0.27

7
2.7
6

3.07

COMPETITIVE PROFILE
MATRIX

CPM of Star Bucks is

3.20 which is higher
than its competitors so
they have competitive
advantage.

SWOT MATRIX

Starbucks
07/31/2015

SWOT Matrix
Strengths S
1) Profitability
2) Brand
Recognition
3) Global Presence

Weaknesses W

Opportunities O

SO Strategies

WO Strategies

1) Global Expansion
2) New Markets
3) Purchasing
Companies

1)

1) New markets will

balance distribution
2) Lower prices for
new products
3) Purchase
companies to
survive

Threats T

ST Strategies

WT Strategies

1) New entrants
2) US market
saturation
3) Government
Regulation

1) Offer better
stakeholder value
2) Ensure a strong
foundation
3) Grow according to
the rules and
regulations

1) Enter into new

countries before
competition
2) Lower prices in
Asia

2)
3)

Re invest profit in
new markets
Use its brand to sell
new products
Expand global
presence by
purchasing
companies

1) Uneven worldwide
distribution
2) Product Pricing
3) Overdependence
on US markets

SPACE MATRIX

Starbucks
07/31/2015

SPACE Matrix
Internal Strategic Position

External Strategic Position

Financial Strength (FS)

Ratin
g

Environmental Stability
(ES)

Ratin
g

5
6
6
4

Technological changes
Rate of inflation
Competitive pressure
Demand Variability
Price Range of Competing
Service

-3
-3
-2
-5
-1

Return on Investment
Working Capital
Net income
Price Earning Ratio

FS average

5.25

ES average

-2.80

Competitive Advantage
(CA)

Ratin
g

Industry Strength (IS)

Ratin
g

Market Share
Service quality
Customer loyalty
Competitions capacity
utilization

CA average

-1
-2
-2
-1

Profit potential
Growth potential
Financial Stability
Resource utilization

-1.50 IS average

Conclusion:Directional vector coordinates: X-axis -1.50 + 5.25 = 3.75

6
5
5
5

5.25

SPACE Matrix
Conservative

FS
+6

Aggressive
(3.75, 2.45)

IS

CA
-6

+6

-6

Defensive

ES

Competitive

IE MATRIX

Starbucks

07/31/2015

(IE) Internal & External Matrix

IFE Total Weighted Scores (3.06)
EFE
Tota
l
Wei
ght
ed
Sco
res
(3.0
1)

Strong
4.0 to 3.0
Hig
GROW &
h
BUILD
3.0
to
4.0
Me
diu
m
2.0
to
2.9
9
Lo
w
1.0
to
1.9
9

Average
2.99 to 2.0

Weak
1.99 to 1

GRAND STRATEGY
MATRIX

Starbucks

07/31/2015

Grand Strategy Matrix

WE
RAPID MARKET GROWTH
EK Quadrant II
Quadrant I
CO
MP
ETI
TIV
E
Quadrant IV
PO Quadrant III
SIT
IO
N

SLOW MARKET GROWTH

ST
RO
NG
CO
MP
ETI
TIV
E
PO
SIT
IO
N

BCG MATRIX

Starbucks
07/31/2015

Grand Strategy Matrix

WE
RAPID MARKET GROWTH
EK Quadrant II
Quadrant I
CO
MP
ETI
TIV
E
Quadrant IV
PO Quadrant III
SIT
IO
N

SLOW MARKET GROWTH

ST
RO
NG
CO
MP
ETI
TIV
E
PO
SIT
IO
N

Action Plan &

Recommendations
Enhance atmosphere
Entertainment to attract more customers
Increase marketing
Advertise
Sales promotions
Promote healthy products

Starbucks
07/31/2015