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Starbucks Case Study

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Starbucks Case Study John Baab, Charly Costigan, Tyler Kleckner, Ashley Kreuer, Ellen Park, Ashley Wooding Outline Background and History Gerald Baldwin, Gordon ... – PowerPoint PPT presentation

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Title: Starbucks Case Study


1
Starbucks Case Study
  • John Baab, Charly Costigan,
  • Tyler Kleckner, Ashley Kreuer,
  • Ellen Park, Ashley Wooding

2
Outline
3
Background and History
  • Gerald Baldwin, Gordon Bowker, and Ziev Siegl
    opened a small coffee shop in Seattles Pike
    Place Market in 1971
  • Howard Schultz Joined the Starbucks marketing
    team
  • Traveled to Italy and became interested in the
    espresso bars and tried to bring it to America
  • Founders sold the company to Shultz
  • Began to open new stores and had 140 stores by
    1992
  • Decided to take the company public and succeeded
    by opening more stores
  • Shultz continued to take the position as chairman
    and chief global strategist and hired CEO Orin
    Smith in 2002

4
Mission/Vision of Starbucks
  • To satisfy customers and to create a third
    place environment
  • Three components to branding strategy the
    coffee itself, service, and atmosphere

5
Overview as of 2002
  • 5,886 stores(4574 National, 1312 International)
  • Customers(20 million total, 570 per week per
    store)
  • Net Income of 215 million
  • Customer Demographic (Traditional vs. New)
  • Menu (Average price of drink 3.85, 30 drinks,
    and 23 whole bean coffee blends)
  • Partners 360 total labor hours and an average
    pay rate of 9.00 per hour
  • Partnerships (Pepsi Bottling Co., Kraft Foods,
    and Dreyers Ice cream)

6
Starbucks Share of Specialty Coffee Market 42
(estimate) 13 Total Market Share
7
  • Starbucks Share of Specialty Coffee Market 50
    (estimate) 20.5 Total Market Share

8
Strengths
  • Well developed and established brand strategy
    live coffee
  • Locations
  • Product Mix
  • Partners
  • Customization of Drinks

9
Weaknesses
  • Customization of Drinks
  • Caused tension between product quality and
    customer focus
  • Increased menu size
  • Lacked a strategic marketing group
  • Very little image product differentiation

10
Opportunities
  • Increase Customer Satisfaction
  • Customer Quota
  • Increase the number of stores
  • Domestically/Internationally
  • Create New Products Services

11
Threats
  • Competition
  • Donut Bagel Chains
  • Small scale specialty coffee chains

12
Problem
  • Key Problem Maintaining a customer focused brand
    image while continuing expansion
  • Customer Satisfaction
  • Lost sight of the consumer
  • Lost connection between customers and growing
    business
  • Service gap

13
Existing Plan
  • Investment Plan
  • 40 million annually
  • Add 20 labor hours a week
  • Maintain 3 minute service time goal
  • Increase customer satisfaction
  • Goal All stores achieve 20,000 increase in
    weekly sales

14
Reinvigorating a Customer Focused Image
  • New Incentives for customer
  • Ideas Drink of the day, membership cards, serve
    at your seat
  • Incentives for Partners
  • Adding 20 hours during peak hours to maintain 3
    minute time
  • More authority to regional retail managers
  • Install a rolling menu policy

15
Maintaining Expansion
  • Moving into new domestic and international
    markets
  • Not saturating existing markets
  • Instead move into untapped domestic markets and
    increase through put at current stores through
    added hours
  • Advantages Will appear more customer focused
    locally, faster

16
Recap
  • customer service
  • inovations
  • brand image
  • Marketing plan
  • Expansion
  • Domestic
  • International

17
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