35. Internal Analysis
How Starbucks Purchase?
7 Fundemental principles for sustainable Coffee Environ.
With Fair price (Premium price, premium coffee)
With long term contracts
Purchasing shade grown, certified & organic coffees
Collaborating with coffee producers globally on coffee quality
(Starbucks farmer support center in Costa Rica)
* In FY2005, Starbucks paid an average price of $1.28 per pound which was 23% higher than the
average New York “C” price.)
36. Internal Analysis
How Starbucks Purchase?
Providing funds & affordable credit for farmers
Invest in Soc. Development Projects (Vaccination
Campaign, Renovating homes, Building schools)
* In FY2005, Starbucks provided $9.5M in loans to Calvert Foundation, Verde Ventures Fund, Ecologic Finance
37. Internal Analysis
C.A.F.E. (Coffee And Farmers Equity Program
C.A.F.E. Practices are
Starbucks buying
guidelines that reward
suppliers.
Prerequisites:
High-quality coffee
Economic transparency
38. Internal Analysis
Facts About Value Chain
Inbound Logistics
Operations
Marketing and Sales
Service
Procurement
Technology/Development
Human Resource Management
Administration
R& D
42. Internal Analysis
Intangible Assets
Several awards which improves reputation & brand
“The 100 Best Companies to Work For”
“Ten Most Admired Companies in America”
“100 Best Corporate Citizens”
“Most Admired Company”
“ Dow Jones Sustainability World Indexes”.
4th “World’s Most Influential Brands”
“Best Global Brands”
43. Internal Analysis
Core Competencies
Employee value
Lower turnover than the rest of the industry
Happy workers make happy customers
“The 100 Best Companies to Work For” — FORTUNE— 1998–2000, 2002–2008.”
“We realize our people are the cornerstone of our success...”
Howard Schultz
44. Internal Analysis
Core Competencies
Commitment to coffee quality and its sustainability
CAFE practises , social programs & farmers support
“third place” of customers make part of their daily lives
45. Internal Analysis
Core Competencies
Continuous Innovation
Starbucks Hear Music™
“Now Playing” feature on the iTunes® in Stores
Frappuccino® since 1995
Starbucks Roast™
61. Performance Appraisal
Diedrich Coffee (Gloria jeans,Coffee World)
Mission: We sell Great Coffees
Founded in 1972, Diedrich Coffee, Inc. is a specialty
coffee roaster, wholesaler and retailer
Brands include Diedrich Coffee, Gloria Jean's, and
Coffee People
Have more than 110 retail locations, both company-
operated and franchised, under these brands located
in 25 states
68. Review Of The Mission And Goals
To inspire and nurture the human spirit— one person, one cup, and one
neighbourhood at a time.
Provide a great work environment and treat each other with respect and
dignity.
Embrace diversity as an essential component in the way we do business.
Apply the highest standards of excellence to the purchasing, roasting and
fresh delivery of our coffee.
Develop enthusiastically satisfied customers all of the time.
Contribute positively to our communities and our environment.
Recognize that profitability is essential to our future success.
69. Strategy Formulation
Corporate Level Strategies
Concentrating on core customers without increasing number of
stores (Pause- Proceed with Caution)
Shifting focus from Store growth to driving traffic by identifying,
listening and responding to their Core customers
Repositioning and upgrading portfolio by investing in targeted
initiatives
Continuing to invest major and minor renovations( upgrading
store design/adding new platforms)
Increasing the amount of products sold to loyal customers
advertising to core customers
70. Strategy Formulation
Corporate Level Strategies
Reduces the effects of global financial crisis
Entering to new & developing markets (Horizontal Growth-
Corporate Franchising)
Reaching to a higher population
Taking the advantage of increasing income per capita and
peoples desire of spending with the help of brand reputation
71. Strategy Formulation
Business Level Strategies
Competitive Strategy -Introduce new products that create
differentiation and desire
Narrowing down the customers targeted
Covering special expectations of core customers -Introduce state of
the art espresso technology / Launch a new platform of best inclass
brewed coffee, handcrafted by the cup
Decrease the volume suppliers and began to concentrate the
business with national vendors
New/diversified products would cover their needs and increase loyalty
(Ex, Over 90% drink both coffee and tea but portion of the purchasing
tea volume is low, app.12%. They can Focus on TEA Builds on Core
customers to sustain loyalty.
72. Strategy Formulation
Business Level Strategies
More focus on currently new products which get good feedbacks. (EX.
“healthy breakfast”). It can be diversified and became a classic for
Starbucks. Here is the increasing demand graphic of it
73. Strategy Formulation
Functional (Operational) Strategies
Improve faster line speed and improve consistent quality
Reduce the partner turnover
Decrease the operating cost
Push Strategy -Developing new products which are new to core
customers
Supply chain optimization
74. Strategy Formulation
Business Level Strategies
Provide cards to make core customers ; it helps to create
communication channels
Provide value, Brand Ownable
Provide membership systems that make customers feel more attached
to the company or reward their loyalty
75. Strategic Choice Implementation
Making the Structure to Match With The Strategies
Aligned product innovation to achieve improved customer interaction
Ergonomic Store design to achieve faster line speed
Effective equipment deployments to achieve customer and partner
satisfaction
Core training & Efficient use of labor to reduce partner turnover
Decentralization into profit or investment centers
76. Strategic Choice Implementation
Making the Structure to Match With The Strategies
Developing new products would be done in R&D department in
cooperation wit marketing department.
Stating most frequented day part and leverage the opportunity at
lowest part
leverage the opportunity in afternoon and evening
77. Strategic Control
Feedback Control
Checking each quarters numbers to if they match with objectives
to increase core customers visits 20% over 2008
to reduce advertising costs by 10% over 2008
to increase profitability by %30 over 2008
78. Strategic Control
Concurrent Control
Checking that actions are correctly taken
do the core customers have their cards?
do core customers know what each card is for?
do core customers think the cards worth having & using
are core customers happy with new products
do core customers feel more attached to the company?
79. Strategic Control
Feedforward Control
Checking if the situation is appropriate for applying strategies
is the budget enough for operations?
is any more advertising is needed?
are distribution channels effective?
are employees educated enough?