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Starbucks Case Study

Ruben Baab, Charly Costigan, Tyler Kleckner, Ashley Kreuer, Ellen Park, Ashley Wooding

Format

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Background and Background

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Gerald Baldwin, Gordon Bowker, and Ziev Siegl – opened a small restaurant in Seattle's Pike Place Market in 1971 Howard Schultz – Joined up with the Starbucks marketing staff Traveled to Italy and became thinking about the espresso bars and tried to carry it to America

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Founding fathers sold the company to Shultz

Began to wide open new shops and had a hundred and forty stores simply by 1992 Decided to take the company public and succeeded by opening more stores Shultz continued for taking the position while chairman and chief global strategist and hired CEO Orin Jones in 2002

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Mission/Vision of Starbucks

пѓљ To fulfill customers also to create a " third

place” environment  Three pieces to personalisation strategy: the coffee itself, service, and atmosphere

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Overview as of 2002

пѓљ five, 886 stores(4574 National, 1312 International) пѓљ Customers(20 , 000, 000 total, 570 per week per

store)  Net Income of 215 million $  Customer Demographic (Traditional versus New)  Menu (Average price of drink – $3. eighty five, 30 refreshments, and twenty three whole veggie coffee blends)  Partners – 360 total labor hours and an average spend rate of $9. 00 per hour  Partnerships (Pepsi Bottling Co., Kraft Foods, and Dreyers Ice cream) 8/19/2013 your five

2002E - $21. a few Billion (total sales)

Specialised Coffee, 31% Specialty Caffeine Traditional Caffeine Traditional Coffee, 69%

Starbucks Share of Specialty Espresso Market 42% (estimate) – 13% Total Market Share 8/19/2013 6

2005E - $22 Billion

Specialty Coffee, 41% Traditional Coffee, 59%

Specialised Coffee Traditional Coffee

 Starbucks Discuss of Niche Coffee Market 50% (estimate) –

twenty. 5% Total Market Share

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Advantages

пѓљ Well developed and established brand

technique: " live coffee”  Locations  Product Combine  " Partners”  Customization of Drinks

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Weak points

 Customization of Refreshments – Induced tension between product top quality and customer focus – Increased menu size  Lacked an organized marketing group  Little or no image & product difference

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Opportunities

пѓљ Increase Client satisfaction

– Consumer Quota

пѓљ Increase the quantity of stores

– Domestically/Internationally

пѓљ Create New items & Companies

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Threats

пѓљCompetition

– Doughnut & Bagel Chains – Small scale niche coffee restaurants

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Problem

пѓљ Key Trouble: Maintaining a buyer

focused brand image although continuing enlargement  Customer Satisfaction – Misplaced sight of the consumer – Lost interconnection between consumers and developing business – Service distance 8/19/2013 doze

Existing Program

 Investment Plan – $40 million annually – Add 20 labor hours a week – Maintain 3 minute assistance time objective • Increase customer satisfaction

пѓљ Goal: All stores attain $20, 000 increase

in weekly product sales

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Reinvigorating a Customer Focused Picture

 Fresh Incentives to get customer – Ideas: Drink of the day, account cards, provide at your seats  Bonuses for Companions – Adding 20 hours during optimum hours to keep 3 tiny time – More specialist to local retail managers – Use a rolling menu policy 8/19/2013 14

Keeping Expansion

пѓљ Moving into fresh domestic and international

markets пѓљ Certainly not saturating existing markets

– Instead: transfer to untapped home-based markets and increase through put in current shops through added hours – Advantages: Will appear more consumer focused nearby, faster 8/19/2013 15

Summarize

– – – – – – – customer satisfaction inovations company image Advertising plan Enlargement Domestic Intercontinental

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