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1.0 EXECUTIVE
SUMMARY

 

Starbucks
Corporation is a coffee supplier and it started since 31 March 1971 in Seattle,
Washington. Starbucks Corporation founded by the three founding partners. They
are Jerry Baldwin who was an English teacher, Zev Siegl who was a History
teacher and Gordon Bowker who was a writer. Howard Schultz joined Starbucks and became the director of retail
operation and marketing in 1982. During that time, when Howard Schultz joined
Starbucks, Starbucks supplied coffee to fine restaurants and espresso bars.
Starbucks Corporation did not brew coffee to sell during that time.

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Starbucks
expands beyond Seattle due to the public’s demands for great coffee. Therefore,
they expanded to United States at first, then the entire world. Tokyo was the
first store that located outside the United States and started in 1996. In
2000’s, Starbucks has more than 15000 locations in more than 40 countries.

 

Starbucks is
taken into consideration the principle representative of “second wave coffee”,
which distinguish itself from other coffee and serve venues within the United
States by flavor, quality and customers experience, while popularizing their darkly
roasted coffee. Since the 2000’s, the third wave coffee makers have focused on
quality – minded coffee drinkers with hand – made coffee primarily based on
lighter roasts, while Starbucks recently used automatic expresso machines for
efficiency and safety reasons.

As we all know, Starbucks serve variety of hot and cold beverages, whole-bean
coffee, macro-ground instant coffee, espresso and cafe latte. Yet, it
also sells pre-packaged
food items, sandwiches, drink ware such as mugs and tumblers, pastries and snacks. Moreover, Starbucks concentrated on producing products more particular to the local culture
and flavor. Therefore, it sells books, music, films and
ice-creams based on the
local availability. We
also can find Starbucks brand coffee bottles sold inside the grocery stores.

 

Starbucks is the
largest and famous coffee house in the world as of 2013. It was located around
the world and it has 22766 stores in 65 countries such as nearly 13000 stores in the United States,
1400
stores in
Canada, 1120
stores in
Japan, 550 stores in
South Korea, 205 stores in the Philippines and 170 stores in Thailand. On 17 December 1998, Starbucks Corporation opened
the first Starbucks in Kuala Lumpur, Malaysia. It is operated by licensee of
Starbucks Coffee International. In March 2015, Starbucks had expanded to Sabah
and Sarawak. Now, people around the world can enjoy the Starbucks’ food and
beverages at everywhere.

 

 

 

 

 

 

2.0 BUSINESS NAME AND BUSINESS DESCRIPTION

 

The business
name of the company for our marketing plan is Starbucks Corporation. We think
that this business name has attracted our attention and it is memorable. This
is because it is easy to pronounce and the products it sales is expensive
compared to other coffee house. The design of their logo is also unique. The
design of logo has experienced many huge changes since the creation of
Starbucks. When the company is obtained by Howard Schultz (CEO of Starbucks)
the design of logo changed in the year 1987. Although all of the huge changes
caused to the design of the logo, the Starbucks logo still keeps its original
“Mermaid” sign. The design of logo rapidly growth in the prestige of Starbucks.
As a matter of fact, the Starbucks logo has become one of the world’s most
famous sign.

 

The people will think
that Starbucks, an American coffee firm sale their products are more expensive
compared to others coffee shop. This is because they offer their coffee, tea,
and other products with high standards of quality and taste. Besides, Starbucks
Corporation also has a good customer service, the employees of Starbucks always
serve the customers with their enthusiasm and politeness.

 

Starbucks stands
out among competitors by their fame. Starbucks has almost 24000 coffee shop
chains worldwide. The employees in Starbucks have good work efficiency and
serve the customers politely and friendly. The employees have to train on every
product and they have a full knowledge of their products. They need to follow
their company’s SOP (standard operating procedure) to make their beverages and
foods. The environment of every Starbucks chains are comfortable and warm and
it is a place to release leisurely.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3.0
BUSINESS MISSION STATEMENT

 

The mission
statement of Starbucks is “To inspire and nurture the human spirit
– one person, one cup and one neighborhood at a time.” The reason Starbucks Corporation still existing is
due to its high and
good quality
of coffee
beans that have
local taste.

 

 

 

 

 

 

 

 

 

 

 

 

 

4.0
S.W.O.T ANALYSIS

Company strength? Weakness? What major opportunities
and threats does you company face?

 

STARBUCKS S.W.O.T ANALYSIS

Strengths

Weaknesses

·        
Strong brand image
·        
Extensive global supply chain
·        
Diversified business through subsidiaries

·        
Higher price points
·        
Generalized standards for most products
·        
Imitable products

Opportunities

Threats

·        
Expansion in Asia, the Middle East, and Africa
·        
Diversification of product mix
·        
Partnerships or alliances with other firms

·        
Competition from low-cost coffee sellers
·        
Imitation
·        
Independent coffeehouse movements

 

    

Starbucks Coffee
Company stands as the biggest coffeehouse business in the world. In SWOT
analysis, business strengths are evaluated to determine the ability to address weaknesses,
opportunities and threats. This SWOT analysis of Starbucks Coffee presents the
internal factors and external factors significant to the firm. Even though
Starbucks is already a strong global brand, various factors threaten the
business. As such, the firm must innovate its approaches to overcome these
threats. Indeed, Starbucks is so well known throughout the western hemisphere
that it has become a household name for coffee.

 

Starbucks has
one of the world’s strongest and most popular brands. The company also has a
growing population of loyal customers who prefer Starbucks based on quality and
the brand. In addition, the company has a global network of suppliers. The firm
has also acquired businesses as subsidiaries, such as Teavana. This part of the
SWOT analysis shows that Starbucks is resilient through diversification and a
global supply chain.

 

Next, most
Starbucks products are also based on generalized corporate standards that make
the products less aligned with cultural demands in some markets because of
higher prices. Then, Starbucks Coffee’s business is imitable in terms of
products and café ambiance. This part of the SWOT analysis shows that Starbucks
must innovate to overcome its weaknesses, especially the imitability of
products.

 

Furthermore, the
company Starbucks also has the opportunity to expand in Asia, where economic
growth rates are high. In addition, even though Starbucks already has a
considerably diverse product mix, further diversification can help improve its
competitive advantage. Partnerships and alliances can also strengthen Starbucks
Coffee’s competitive position. This part of the SWOT analysis shows that
Starbucks has major opportunities for global growth.

 

Lastly, low-cost
coffee from firms like McDonald effectively compete against Starbucks products.
Also, other companies can imitate the business. Many competitors have already
imitated Starbucks and succeeded, such as Stars and Bucks, a coffeehouse in the
Palestinian Territories. There is also a growing social movement supporting
independent coffeehouses and opposing large coffeehouse chains like Starbucks.
This part of the SWOT analysis shows that Starbucks must ensure competitive
advantage amid potential negative effects of the identified threats, especially
imitation and competition.

 

 

 

 

 

 

 

5.0 COMPETITIVE ANALYSIS

Who are your major competitors?

Starbucks is a
business that serves beverages with the main focus on coffee. When talking
about competitors, those that serve coffee are known as competitors. When we
talk about major competitors, those companies should be as big and as many
outlets as Starbucks. There are two major competitors that can be seen clearly
which is The Coffee Bean & Tea Leaf and Tim Hortons. These two companies
are one of the famous coffee restaurants around the world. However, Howard
Schultz which is the owner of Starbucks mentioned that these major competitors
are not a threat to the company. There are no obvious decline of profit if
either one of these two companies make promotions or new menu. The main threat
came from the local coffee shops. In Sibu, Sarawak we can see Coffee Code is one
of the famous coffee restaurant that can compete with Starbucks Company.

How is your competition really defined?

The competition
can be defined as tough. This is because there are a lot of other competitors
besides few major competitors. These competitors are known as the local coffee
shops. In Malaysia, there are a lot of local coffee shops due to the culture of
Malaysian. Coffee shops have existed date back to 1960. Especially in Malaysia,
citizens are used to going to the local coffee shops. Some are regular
customers such as the senior citizens due to the regular hangout spot. As for
other citizens, they will choose local coffee shops due to the different in
price. Our company have much more expensive beverage compare to the local
coffee shops. This is why competition is defined as tough especially in
Malaysia.

 

How could you characterize your market from an
economic perspective?

Starbucks is a
coffee business which target market mainly consists of adults or teenagers that
drink coffee. Having coffee products in this industry is definitely very tough
to survive due to high competitors. We characterize this market as monopolistic
competition that consists of high competitors but variety of prices due to different
quality and taste. However from an economic perspective, this industry
definitely has a bright future. There are so many coffee consumers all around
the world. This shows that our target market is not limited. When there are few
customers that enjoy cheaper coffee, there are some that prefer better quality
coffee. As for our company, we provide a promising quality of coffee for our
costumer. There are few to none of Starbucks restaurant closed down due to
having loss. This shows that despite all the competitors, Starbucks still
obtained profits throughout the world.

How does this economic characterization impact your
choice of strategy?

This
characterization impacts few of our strategies. We focus more on our product
quality which is our best aspect. Starbucks itself are famous and chained
throughout the world due to the taste and quality of the coffee bean. We also
target more on the customers that prefer quality over cheaper price. We will
introduce new type of beverage once in a while to attract these customers. Besides,
we also do promotions from times to times. This strategy can target the
customers that wanted cheaper price for coffee. With this promotion, they can
enjoy cheap coffee with a high quality taste. A strategy like this definitely
able to increase our existing customers. As our market is monopolistic competition,
we have to adapt in term of variety, quality and price to maintain our top
position in this industry.

 

 

6.0 MARKETING OBJECTIVES

 

For our
marketing objectives we will like to achieve the five main goals that we set
for the marketing department:

 

For the first
one, we are targeting on attracting newer customer buy using our new marketing
strategy. Most of the times, Starbucks customers are between 20 years old until
35 years old. To break this limit, we are planning to target every age
categories by coming out the drinks that are suitable their taste and good for
their health on that particular age.

 

Next, increase
the sales year by year is also one of our objective. We are trying to avoid the
reduction of our sales on each outlet. Research and survey have to be done
month by month to ensure that our products are satisfy the customers or not. If
it is not we will have to come out solution immediately so that we can avoid
the loss in short-term.

 

Besides that, we
also want to expand our market more than before in locally and also
internationally. We are trying to fitment on every old outlet and at the same
times slowly increase the numbers of outlets. As for international market, we
will not involve all the country because there is some country that is not
suitable for our markets.

 

For the fourth
objective, we want our brand being the top brand for long-term in the world
especially in drinks. We need to always observe our competitor and staying at
the first place but without copying or stealing the idea. We have to keep our
origin to compete with the competitors.

 

Lastly, we want
to satisfy our customer by our new service and new products. We are trying to
improve our service time by time and for the products we are trying to create a
new product during the international festivals and on the Starbucks
anniversary. As we mention earlier, we also trying the change and evaluate our
products to satisfy every customer taste. The happiness of customer is the most
important on our goals.

 

 

 

 

 

 

 

 

 

7.0
MARKETING STRATEGY

 

Target
Marketing Strategy

As we are focusing on every age of the customers, we
will have to done our survey and also research on the customers’ behavior. We
will be more providing the drinks that majority customers are prefer but in
contrast, we will also be coming out several different types of the drinks
because we want fulfill all the marketing segments. As our target markets are
huge, we need more manpower do reach the customers with our best services and
products.

Marketing
Mix

To achieve our marketing objectives, we are coming
with our the best and the newest marketing strategy which is based on the
marketing mix, product, price, place and promotion by satisfy the target markets needs and wants as
below:

Product

As for the product, we are now fully concentrate on
all the drinks and foods. We are creating a different menu on drinks for
different age of customers. As for the kids, we named it as ‘Kid’s Drinks’ and
from there, we are giving the drinks like juice, vanilla, strawberry, chocolate
milk, cream and a lot that is fully suitable and attractive for the children.
For the customer which above 20 years old, normally we are more concentrate on
the coffees and tea. We will be coming out different mixture one every festival
and coming with a new drink on each Starbucks anniversary.

On the food, at this stage we only providing on
sandwiches, paninis and salads. We are planning to add on the dessert and cakes
which is very suitable for the customers to enjoy with their drinks and spend
their time on our outlet.

We also processing on giving the service of online
purchasing on our products through our website. Customers give choose what they
want and paid it to our workers when the products were delivered or they can
pay through online or using their bank card. This service is trying to give
convenience to some customers who are lazy but craving on our drinks.

Price

From current strategy, our drinks are sold with
different size which called short, tall, grande, venti and trenta. Our products
are branded and as usual it will be expensive. To fulfill the customers, we are
offering some basic coffee and tea which cost less and once they paid for the
first time, the keep refill that particular drinks.

Besides that, we also coming out with combo set. We
will combo the drinks and the foods which will help the customers save their
money. On each combo, we are giving the many choices to at each combo
categories with relevant prices.

Place

On every outlet, we are avoiding to be built on the
high traffic jam place and inside a shopping mall and. We will choose a place
that really can let the customers relax on listening to the music or chatting
with their friends or enjoy on reading their book on our outlet. Each of our
outlet will list on the google map and it definitely easy to find. On our
outlet, we will provide free Wi-fi and free phone charging to the customers.

Promotion

On each festival, we will be giving the promotion on
buy one free one on any drinks to the customers. Besides festival, we will also
be giving free any 2 drinks for any customers who are having birthday on that
particular days. We also will be rewarding to the customers when they redeem
the points from any of our cooperator like giving free T-shirt or have a
discount on that particular purchases.

 

 

 

 

 

 

 

 

 

 

 

 

8.0
MARKET ANALYSIS

 

Overview
of coffee industry

Starbucks is a food and beverage industry or in
specific way is a café and coffee industry that have business all around the
world. Coffee industry is the highest consumed drink in the most developed
country like United States and European countries. Coffee market also become
the second most traded commodity in the world. The coffee market value will
have excepted to expand about 5.5% CAGR to reach around XX million USD in the
forecast period.

 

Growth
of coffee industry

The growth of the coffee market slightly increases
in year 2016 compare to before. The most common age that drink coffee are
between 19 to 34 years. Form the information we can see that 44% of the coffee
that have in United States come from millennial. As the information the
consumption of coffee have increase form 34% till 48% in the age 18 to 24
years-old. In age of 25 to 39 years-old, the percentage increase from 51% to
60% that had reported by the national coffee association in New York. Start
form aged 40 and above, the consumption of coffee will decrease from 76% to
60%. Coffee culture has become a fashion symbol among the young generation is driving
the coffee consumption. The other factor causes the growth is also came from
the availability of the wide-range of coffee type, rising of urbanization, and
others factor.

Key
trends

The coffee industry has some trend that will happen
now and also in future. The ready-to-drink coffee is rising in the demand. The
popularity of soft drink that include caffeinated drink cause the driving sale
of RTD coffee. The consumption of pattern on-the-go was increasing the RTD
coffee demand. The news enter in this industry was encourage to enter this type
of coffee. 

Other trend is nitro coffee that interest by the
consumer. Nitro coffee was similar idea from beer that poured from a tap that
have mouth-feel like beer. Nitro coffee allow consumer to add less milk and sugar
that appeal to those health-conscious coffee drinkers. This offer a unique
coffee experience to consumer.

Next trend is the iced coffee. Iced coffee is one of
most popular go-to drink that consumer looking in summer as a refresh drink. Iced
coffee has gained popularity in the several years that the sales increase about
580% in between years 2011 till 2016. 
Large number of coffee retail brand has added iced coffee inn they
product line. Iced coffee is like hot coffee that uses heat to sugar, oil, extract
flavor, and caffeine from the bean, chilled and served with ice.

 

 

9.0
ORGANIZATIONAL STRUCTURE AND PLAN

 

In Starbucks, they use matrix organizational
structure which has mix with different feature of basic type of organizational
structure. Starbucks has mix four main type of organizational structure that is
functional structure, geographic division, product-based division, and teams.
Functional structure means that divide organization into a small group based on
the specialized. Like in Starbucks, the main functional group are HR
department, finance department, and marketing department. HR departments will
help Starbucks control the employee problem and policies in Starbucks, finance
department will look after for the money part and marketing department help to
design marketing plan to promote Starbucks. This structure can help Starbucks perform
better in every area because they have professional team that help them in the
area that they specialize.

 

The next feature is geographic division. This
structure is normally use in the company that have operation in the large
region around the world. Every location have they own internal structure and
management. This structure allow company to use local and experience to run the
company in the particular location. Starbucks has division into three regions
in global market. The first part is Asia-pacific and China. The second part is
USA. The last part is Europe, Middle East, Russia and Africa. This feature can
help Starbucks support closer managerial of support for the local needs.

 

The third structure is product-based division.
Product-based division means that the different product will let different
people to manage it so that they can focus in the product line. In Starbucks,
the coffee was one of the divisions, baked good is another division and mugs
will manage by other division. This structure can help Starbucks manage the
product efficiently due to different groups so that each team can focus on
certain product and make sure the product will be produced well.

 

The last organizational structure is team. Team was
the most notable in the lowest organizational levels in Starbucks. In each café
of Starbucks, they will have a team that delivers goods and service to customer.
This structure can help Starbucks to enable the company provide effective and
efficiency service and goods to customer.            

 

 

 

 

 

 

 

 

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