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PRESENTED BY : DEEPAK VARGHESE M-14-02
DIXON DOMINIC M-14-04
ISHAN PARASHAR M-14-06
SOHAM DAS M-14-16
Introduction
 Industry - Coffee Shop
 Founded - March 30, 1971 (Seattle, Washington)
 Key People - Howard Schultz (Chai...
Timeline in Brief
1971 - Starbucks Coffee, Tea and Spice store
(coffee bean roasting) opened in Seattle Pike Place
Market...
• 1996 - Started selling bottled Frappuchino
• 1999 - Acquired Tazo Tea
• 2000 - Acquired Hear Music, a San Fransisco base...
Why Globalize?
Saturated home market
Reaching brand maturity stage in USA
Salient Features
International joint ventures...
Japan
Starbucks Coffee Japan was established in October
1995, as a JV between Sazaby Inc. and Starbucks
Coffee Internatio...
UK
• Starbucks fuelled its initial expansion into UK
with an acquisition of the then 56 outlet, UK
based, Seattle Coffee C...
France
Started in 1994 but could open only 30
outlets in 10 years.
Huge cultural diversity considering its
historic café...
South Korea
• Started in 1999
• Starbucks Korea Co. Ltd. As a JV with Shinsegae
Department Store Co. Ltd. and Starbucks Co...
Middle East
• Entered in 1999, Kuwait.
• Licensing agreement with trading partner and
licensee M.H. Alshaya Co. WLL, a pri...
China
• Entered in 1999
• China was a tea preferring country and had a rich
culture around it.
• Targeted the new middle c...
India
• Attempted to form alliance with Future Group; rejected
by FIPB.
• Was in talks with Jubilant Group for an alliance...
Cultural Diversity
• At Starbucks diversity is defined by an equation –
DIVERSITY = INCLUSION + EQUITY + ACCESSIBILITY
ACC...
Generic Value Chain
Generic Value Chain
Primary Activities
• Inbound logistics - Sourcing coffee from diverse
coffee beans producers with whom...
Generic Value Chain
• Marketing and Sales - Traditionally, investment in
marketing activities have not been significant an...
Generic Value Chain
• Human Resource Management:- Great benefits,
employee empowerment and amazing corporate
culture makes...
OPERATING RESULTS
AMERICA – SEGMENT RESULTS
EMEA – SEGMENT RESULTS
CHINA / ASIA PACIFIC – SEGMENT RESULTS
0
10
20
30
40
50
60
70
80
2013 2012 2011 2010 2009
Gross margin
Gross margin
0
200
400
600
800
1000
1200
1400
1600
2013 20...
0
0.05
0.1
0.15
0.2
0.25
0.3
0.35
2013 2012 2011 2010 2009
D/E Ratio
D/E Ratio
0
5
10
15
20
25
30
35
2013 2012 2011 2010 2...
STARBUCKS VS PEERS
References
• Starbucks’ Global Quest in 2006: Is it the best yet to come? by Danny
Nugroho RP and Retnowulan
• Starbucks I...
Starbucks Retail Chain Analysis
Starbucks Retail Chain Analysis
Starbucks Retail Chain Analysis
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Starbucks Retail Chain Analysis

Analysis of Starbuck's strategy of expansion in various areas and India in particular.

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Starbucks Retail Chain Analysis

  1. 1. PRESENTED BY : DEEPAK VARGHESE M-14-02 DIXON DOMINIC M-14-04 ISHAN PARASHAR M-14-06 SOHAM DAS M-14-16
  2. 2. Introduction  Industry - Coffee Shop  Founded - March 30, 1971 (Seattle, Washington)  Key People - Howard Schultz (Chairman & CEO) Kevin Johnson (President & COO)  Inspired to sell high quality beans & equipment inspired from Alfred Peet’s style  Roasted coffee beans bought from Peet’s  After a year started buying from growers  Later bought Peet’s
  3. 3. Timeline in Brief 1971 - Starbucks Coffee, Tea and Spice store (coffee bean roasting) opened in Seattle Pike Place Market 1982 - Howard Schultz joined Starbucks 1986 - Howard Schultz established Il Giornale Coffee Company 1987 - Il Gionarle acquired Starbucks and changed name to Starbucks Corporation 1992 - IPO with 140 outlets (12% = $25mill.)
  4. 4. • 1996 - Started selling bottled Frappuchino • 1999 - Acquired Tazo Tea • 2000 - Acquired Hear Music, a San Fransisco based company • 2003 - Acquired Seattle’s Best Coffee • 2005 - Introduced Starbucks Coffee Liqueur; Acquired Ethos Wate
  5. 5. Why Globalize? Saturated home market Reaching brand maturity stage in USA Salient Features International joint ventures Licensing Acquisitions Maintaining its image throughout Operating at loss in few areas Imbibing local culture With 20% of world’s coffee consumed in North America, Starbucks had to aggressively sell its offerings in countries that already have dedicated tea or coffee drinkers.
  6. 6. Japan Starbucks Coffee Japan was established in October 1995, as a JV between Sazaby Inc. and Starbucks Coffee International. Since opening its first store in Ginza district, Tokyo has expanded to more than 900 stores. Company Name:- Starbucks Coffee Japan Ltd. Critics warned that Japanese would never buy takeout coffee in paper cups or accept the interior non smoking policy. Starbucks proved them wrong with nearly 30% of its customers drinking takeout coffee in those throw away cups.
  7. 7. UK • Starbucks fuelled its initial expansion into UK with an acquisition of the then 56 outlet, UK based, Seattle Coffee Company, 1998. • Rebranded all stores to Starbucks • Used its capital and influence to obtain prime locations across the country. • 675 stores : 2nd biggest overseas market.
  8. 8. France Started in 1994 but could open only 30 outlets in 10 years. Huge cultural diversity considering its historic café culture and French tend to hold to their traditions Target audience = America & Asian tourists + young rich kids wanting to mingle with these tourists Has been incurring losses inspite of tweaking the menu to local tastes and
  9. 9. South Korea • Started in 1999 • Starbucks Korea Co. Ltd. As a JV with Shinsegae Department Store Co. Ltd. and Starbucks Coffee International • Faced opposition from locals; changed lettering of the store and in-store redecorating • A Starbucks store in Seoul showcases traditional Korean culture, with much of its interior constructed with material reclaimed from old buildings. • Succeeded where Wal-Mart failed; largest in the
  10. 10. Middle East • Entered in 1999, Kuwait. • Licensing agreement with trading partner and licensee M.H. Alshaya Co. WLL, a private Kuwait family business. • The family operates over 280 Starbucks stores in Middle East Region including Kuwait, KSA, UAE, Egypt, Lebanon, Jordan, Qatar, Bahrain and Oman. • Currently 600+ stores.
  11. 11. China • Entered in 1999 • China was a tea preferring country and had a rich culture around it. • Targeted the new middle classes with the idea of “meet with friends while drinking our favorite beverage”. • Didn’t advertise but focused on getting high visibility and high traffic localities. • Introduced beverages using popular local
  12. 12. India • Attempted to form alliance with Future Group; rejected by FIPB. • Was in talks with Jubilant Group for an alliance; didn’t materialize. • Entered in 2012 by forming a JV with Tata Global Beverages. • Indian consumers sit for hours in the outlets with their coffee unlike their foreign counterparts which demand plush outlets rather than kiosks and small outlets serving coffee on the go. • Opened its 75th store on July, 2015.
  13. 13. Cultural Diversity • At Starbucks diversity is defined by an equation – DIVERSITY = INCLUSION + EQUITY + ACCESSIBILITY ACCESSIBILITY • “We remain highly respectful of the culture and traditions of the countries in which we do business. business. We recognize that our success is not an an entitlement, and we must continue to earn the the trust and respect of customers everyday.” Howard Schultz
  14. 14. Generic Value Chain
  15. 15. Generic Value Chain Primary Activities • Inbound logistics - Sourcing coffee from diverse coffee beans producers with whom they have relationships and built up efficient supply chain management system. • Operations - They have operation in 60 countries with their stores being modeled on company stores and licensed stores. • Outbound logistics - Most of its product mix are in-store and some through large box retailers. Payment around source through point of sale, prepaid Starbucks Cards and mobile payments.
  16. 16. Generic Value Chain • Marketing and Sales - Traditionally, investment in marketing activities have not been significant and relied mainly on the growing reputation of premium quality product mix and superior customer services to give the ‘Starbucks Experience’ to drive customers to their stores and products. • Service - Starbucks has a reputation for providing supreme level of customer services to their consumers. SUPPORT ACTIVITIES • Firm Infrastructure- They have well designed, aesthetically pleasing stores. They have efficient level of finance, accounting and legal departments to support the firm’s infrastructure.
  17. 17. Generic Value Chain • Human Resource Management:- Great benefits, employee empowerment and amazing corporate culture makes Starbucks drive efficient management of human capital. • Technology development:- Investments in innovative technologies like the well - liked mobile app. • Procurement:- Starbucks procures its products from a diverse group of supplier and has fixed contracts with some of the suppliers.
  18. 18. OPERATING RESULTS
  19. 19. AMERICA – SEGMENT RESULTS
  20. 20. EMEA – SEGMENT RESULTS
  21. 21. CHINA / ASIA PACIFIC – SEGMENT RESULTS
  22. 22. 0 10 20 30 40 50 60 70 80 2013 2012 2011 2010 2009 Gross margin Gross margin 0 200 400 600 800 1000 1200 1400 1600 2013 2012 2011 2010 2009 Net Income Net Income
  23. 23. 0 0.05 0.1 0.15 0.2 0.25 0.3 0.35 2013 2012 2011 2010 2009 D/E Ratio D/E Ratio 0 5 10 15 20 25 30 35 2013 2012 2011 2010 2009 ROE ROE
  24. 24. STARBUCKS VS PEERS
  25. 25. References • Starbucks’ Global Quest in 2006: Is it the best yet to come? by Danny Nugroho RP and Retnowulan • Starbucks International Marketing Strategy by Shahzad Khan • Modes of International Business by Brijesh Dholakia • Strategic Planning of Starbucks(Past Decissions, Current Situation and Future Options) by Namrataben Govindbhai Panchasara • https://en.wikipedia.org/ • http://articles.economictimes.indiatimes.com/ • http://marketresearch.about.com/ • http://www.forbes.com/ • http://www.bloomberg.com/ • https://news.starbucks.com/views/ • http://www.business-standard.com/

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