Starbucks Case Study
Topic
Marketing Strategy
Assignment #1-1: Case Study # 7 - Starbucks
by
Nguyen Thi Huong (MBA)
Student ID: 201305046
November 2013
TABLE OF CONTENTS
Page
Executive Summary 4
Introduction 6
From a humble coffee shop in Seattle, Starbuck Coffee Company has grown into a dominant multinational corporation all over the world. Starbucks is continuously striving to maintain its position in a fast-moving and changeable coffee industry. 6
A. Environment 6
- Strong Financials: Starbucks after becoming a public company has grown in the two decades and has developed high trust in its investors who believe in Starbucks and give it independence to develop further. Starbucks possesses high capital and high income resulting from sales. The company has its own stores worldwide giving better capitals to sign more ventures. 10
- Reliance on U.S Market: Starbucks is a global company and has a presence in 62 countries. However, the total revenues derived from the U.S market made the lion’s sharre of its revenues at 83,7% in 2005. Given the significant presence globally and the opportunities for further expansion, the company needs to be looking at generating a greater proportion of revenues from outside the U.S. 11
- Large corporate Image: Starbucks continually struggles with backlash despite efforts to be more connected with the community. In the U.S, its presence and acquisitions have destroyed local coffeehouses. They are perceived as Walmart of the coffee sphere by many people. This may be seen as an extreme example of capitalism. Some see its international growth as corporate colonialism, which can mean the destruction of local cultures and experiences. 11
- Expensive price: Starbucks and other coffeehouses have caused the price for a cup of coffee to increase to $3-$4. While this price has become acceptable in the U.S, it will pose a significant barrier in emerging markets and countries where one can get a good cup of coffee for a fraction of
Marketing Strategy
Assignment #1-1: Case Study # 7 - Starbucks
by
Nguyen Thi Huong (MBA)
Student ID: 201305046
November 2013
TABLE OF CONTENTS
Page
Executive Summary 4
Introduction 6
From a humble coffee shop in Seattle, Starbuck Coffee Company has grown into a dominant multinational corporation all over the world. Starbucks is continuously striving to maintain its position in a fast-moving and changeable coffee industry. 6
A. Environment 6
- Strong Financials: Starbucks after becoming a public company has grown in the two decades and has developed high trust in its investors who believe in Starbucks and give it independence to develop further. Starbucks possesses high capital and high income resulting from sales. The company has its own stores worldwide giving better capitals to sign more ventures. 10
- Reliance on U.S Market: Starbucks is a global company and has a presence in 62 countries. However, the total revenues derived from the U.S market made the lion’s sharre of its revenues at 83,7% in 2005. Given the significant presence globally and the opportunities for further expansion, the company needs to be looking at generating a greater proportion of revenues from outside the U.S. 11
- Large corporate Image: Starbucks continually struggles with backlash despite efforts to be more connected with the community. In the U.S, its presence and acquisitions have destroyed local coffeehouses. They are perceived as Walmart of the coffee sphere by many people. This may be seen as an extreme example of capitalism. Some see its international growth as corporate colonialism, which can mean the destruction of local cultures and experiences. 11
- Expensive price: Starbucks and other coffeehouses have caused the price for a cup of coffee to increase to $3-$4. While this price has become acceptable in the U.S, it will pose a significant barrier in emerging markets and countries where one can get a good cup of coffee for a fraction of
References: Starbucks Corporation Corporate Social Responsibility / Fiscal 2006 Annual Report (2006), from http://www.starbucks.com/assets/4dd6216d0fd0400f8689eceba0497e04.pdf (http://www.lippincott.com/files/documents/sensemagazine/95/files/assets/downloads/sense95.pdf) How will you lead differently when you get back to your store, 2008 Starbucks Corporation, from http://www.millwardbrown.com/Libraries/MB_POV_Downloads/MillwardBrown_POV_Brand_Equity_and_Pricing.sflb.ashx Starbucks Corporation: Competing in a Global Market, UW Business School (Revised April 7, 2003) http://faculty.bschool.washington.edu/skotha/website/cases%20pdf/starbucks_Intl%20copy.pdf Krause Fund Research (April 19, 2013), Starbucks Corporation