Starbucks is a global coffee company that operates over 19,000 stores worldwide. It started as a small coffee bean roaster in Seattle in 1971. Under new leadership in the 1980s, Starbucks expanded and pioneered the coffee shop concept. Today it sells coffee, tea, food items and coffee brewing equipment across 62 countries. Starbucks positions itself as an upscale brand that provides customers with a unique experience in its stores. It focuses on high quality coffee and customer service to drive its continued global success.

1. Business Analysis
Compiled By;
Qamarudheen Thayyil
khamarudheent@gmail.com
+919-6259-234-12
STARBUCKS
COFFEE
www.starbucks.com

2. Intrduction
Overview
Histrory
Mission
Key People

3. I
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Overview
Starbucks is a world renowned specialty coffee
maker.
It roasts, markets and retails specialty coffee.
It offers blends of coffee, handcrafted beverages,
merchandise, and food items, ready-made drinks,
and Starbucks ice cream.
It markets all of its products under the flagship
Starbucks brand.
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It also market some products under brands such
as Tazo Tea, Seattle’s Best Coffee, Starbucks VIA,
Torrefazione, Italia Coffee, and Evolution Fresh.
The company-owned and licensed stores
operates across Asia-Pacific, the Middle East,
Africa, Europe and the Americas.
Total stores: 19767 (as of September 29, 2013)
Company-operated - 10194.
Licensed stores - 9573.
Overview
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5. I
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The first Starbucks store opened in Seattle’s
Pike Place Market in 1971.
The company grew to be the largest roaster in
Washington with multiple locations until the
early 1980’s.
In 1981,Howard Schultz, recognized a great
opportunity and began working with the founder
Jerry Baldwin.
History
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6. I
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Schultz wanted to bring the Italian café culture
to the United States. Selling espresso by the cup
was the first test.
Schultz left Baldwin to open his own and raised
money from investors to purchase the
Italian Coffee House Giornale.
The company experienced rapid growth going
public in 1992, and growing tenfold by 1997,
with locations around the United States, Japan
and Singapore.
History
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Starbucks coffee on United Airlines flights.
Selling premium teas via Tazo Tea Company.
Offering order Starbucks coffee online.
Introduced new products and operations.
Today, Starbucks has millions of customers
every day, in about 19,000 locations in over
62 countries which have employed approximately
1,82,000 partners worldwide.
Starbucks also began expanding its brand by;
History
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8. “To inspire and nurture the human spirit one
person, one cup, and one neighborhood at a time.”
It ethically sources the finest coffee beans.
It embraces diversity.
It provides a human connection with employees.
It creates stores where customers feel comfortable.
It takes responsibility in each community.
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Mission

9. I
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Key People
Howard Schultz
Chairman
President
Chief Executive Officer
Troy Alstead
Chief Financial Officer and Group President, Global Business Services
Adam Brotman
Executive Vice President, Chief Digital Officer
Curtis Garner
Executive Vice President, Chief Information Officer
Sharon Rothstein
Executive Vice President, Global Chief Marketing Officer
Arthur Rubinfeld
Chief Creative Officer, President, Global Innovation And
Matthew Ryan
Executive Vice President, Global Chief Strategy Officer

10. PRODUCTS
Drinks
Food
Merchandise

11. P
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Espresso
®
FrappussinoNon-Coffee
Cappuccino
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Drinks

12. Pastry/ Cakes
CookiesMuffins
Sandwitch
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Food

13. P
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Merchandise
Blends
Coffe MakersMugs
Tumblers

14. SWOT Analysis
Strengths
Weaknesses
Opportunities
Threats

15. Innovation
Global presence
Strong financials
Brand identity
Store ambience
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Strengths
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16. High employee turnover
Over dependence on US market
Small product mix
Higher prices
Too many products
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Weaknesses
S
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s
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17. S
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International markets
Customization
Inorganic growth
New product mix
Localization
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Opportunities

18. Intense competition
Govt. Regulations
Uncertain suppliers
Target of terrorism
Saturated US market
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Threats

19. Strategy
Success Formula
Internalization

20. S
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Motivated employees & superior customer
service is the key success factor of Starbucks.
Starbucks focuses
on recruiting and
developing right
people.
Starbucks partner serving coffee with a smile :)
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Success Formula
Attractive
compensation
policies.

21. S
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Y
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Market Entry
Local joint-venture is the preferred
entry strategy of Starbucks.

22. Financial Analysis
Share Price
Sales Mix
Income Statement
Earnings
Balance Sheet

23. F
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$46.50
$56.55
$62.00
$54.28 $54.90
$58.97
$67.48
$77.84
$35.12
$45.28
$51.03
$43.04 $44.27
$52.39
$56.65
$65.82
12Q1 12Q2 12Q3 12Q4 13Q1 13Q2 13Q3 13Q4
High Low
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Share Price

24. F
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74% 75% 75%
20% 19% 19%
3% 4% 4%3% 2% 2%
2013 2012 2011
Beverages Food Packaged and single serve coffees Coffee-making equipment and other merchandise
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Sale Mix

25. F
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S
14892.2
13299.5
11700.4
15469
11512.8
10175.8
-325.4
1197.4
1728.5
8.3
1384.7 1248
2013 2012 2011
Net Revenue Operating Expense
Operating Income Earnings After Interest & Tax
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Income Statement

26. F
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S$0.01
$1.83
$1.66
$0.89
$0.72
$0.56
2013 2012 2011
EPS Cash Dividends
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Earnings

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$5,471.40
$4,199.60
$6,045.30
$4,019.60
$5,377.30
$2,209.80
$1,657.10
$894.90
$4,482.30
$5,114.50
2013 2012
Current Assets Fixed Assets Current Liabilities
Long Term Liabilities Equity
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Balance Sheet

28. MARKETING
Segment
Targeting
Positioning
Product
Price
Place
Promotion

29. M
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Every age group.
Tech savvy individuals.
Men and women.
High disposable income.
Brand focused.
Savvy and avid coffee lovers who enjoy
the “Starbucks Experience”.
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Segment

30. M
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Starbucks targets commuters and captive
consumers.
Commuters consist of people heading to or from
work or people on their lunch break.
Captive consumers consist of those who are
stuck in a campus environment.
Eg: high school & college students, corporate
campuses.
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Target Customer

31. M
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Starbucks has positioned itself as an upscale
brand which provide rich experience.
It is obvious from the mission statement that
they are trying to make it the best for socializing.
Starbucks is trying to reposition itself as a
“third place” for its customers.
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Positioning

32. M
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Coffee: More than 30 blends and premium coffees.
Handcrafted Beverages: Fresh-brewed coffee,
®
hot and iced espresso beverages, Frappuccino
coffee and non-coffee blended beverages,
®
smoothies and Tazo teas.
Fresh Food: Baked pastries, sandwiches, salads,
oatmeal, yogurt parfaits and fruit cups.
Merchandise: Coffee- and tea-brewing equipment,
mugs and accessories, packaged goods, music,
books and gifts.
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Product

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Startbucks offers all of its products at a premium
price.
Prices range from $1.00-$4.20 for drinks which is
higher than any other retailers.
In case of foods, Starbucks is more expensive
when compared to quick-service restaurants,
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Price

34. M
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Distributed directly to customers through own
retail stores and retail partners.
Located in high-traffic, high-visibility locations,
focusing on pedestrian consumers.
Company also focus on drive-thru retail stores for
the convenience of non-pedestrian consumers.
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Place

35. M
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Advertising
Starbucks spends under 3% of revenue on ads.
But spends more on ensuring customer
satisfaction to increase word of mouth.
Personal
Selling
Public
Relations
Sales
Promotions
Passionate employees, customer satisfaction.
Events, public performances, green initiatives
philanthropic endeavors.
Store decoration, viral videos, sample vans,
billboards, newspaper, magazines and
social media.
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Promotion

36. FACTS
Five Facts

37. F
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Five Facts
Starbucks has added an average 15 stores on a daily
basis since 1987.
The average Starbucks customer visits the store 6 times
per month while loyal 20% of customers visit 16 times.
There are over 87000 drink combinations at Starbucks.
The Starbucks cinnamon chip scone has more calories
than a McDonald’s quarter pounder with 480 calories.
Starbucks uses 93 million gallons of milk and
2.3 billion paper cups per year.
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38. Recognitions
Awards

39. R
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“No. 1 Best Coffee,” Fast Food and Quick
Refreshment categories Zagat’s Survey of
National Chain Restaurants – 2009-2010
“No. 1 Most Popular Quick Refreshment Chain”
Zagat’s Survey of National Chain Restaurants
– 2009-2010
One of the “World’s Most Ethical Companies”
Ethisphere – 2007-2010
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Awards
One of “The 100 Best Companies to Work For”
FORTUNE – 1998–2000, 2002–2010
One of the “Most Admired Companies in America”
FORTUNE – 2003–2010
One of the “Global 100 Most Sustainable
Corporations in the World” Corporate Knights
– 2010

40. Compiled By;
Qamarudheen Thayyil
khamarudheent@gmail.com
+919-6259-234-12
THANKS
www.starbucks.com