StarbucksCaseStudy星巴克案例分析

1、CONTENTS1.Introduction 52.External Analysis 52.1Wider Macro-Environmental Analysis 52.2Industry analysis72.3Industry Life cycle 92.4Competitor Analysis 102.5Industry?s Critical Success Factors102.6Opportunities & Threats113.Internal Analysis 113.1 Starbucks?s Strengths & Weaknesses113.2 Evaluation o

2、f Starbucks? Main Capabilit es 123.3 Value Chain Analysis 133.4Starbucks? Main Internal Capabilities against industry?s CriticalSuccessFactors 144.Starbucks? Current ,Issue & Challenges? Diagnosis144.1 Summary of Key Issues144.2 Starbucks? Current Strategic Challenges155.Generation of Strategic Opti

3、ons165.1 Description of Starbucks? Competitive Strategy165.2 Strategic Direction 17Page 15.3Methods of Pursuing Strategies 186.Evaluation of Strategic Options 196.1Suitability 196.2 Feasibility 206.3 Acceptability 217.Selected Strategy 227.1Description of Selected Strategy227.2Resources Needed for I

4、ts Implementation 238.Conclusion 239.References2410.Appendices25Appendix A: PESTEL Analysis 25Appendix B: Porter?s Five Forces Analysis26Appendix C: SWOT Analysis 28Appendix E: VRIO Framework 30Appendix E: Value Chain Analysis 31Appendix F: Porter?s Generic Strategies / Bowman?s Strategic Clock32App

5、endix G: Ansoff Matrix 32Page 21. IntroductionThis report applied the PESTEL, SWOT, Ansoff Matrix and other strategy analysis methods to try to provide a full strategic assessment of Starbucks Corporation. Its aim to further study the Starbucks?development strategic, draw lessons from successful exp

6、erience and absorb its failure lesson.Starbucks was founded in Seattle, Washington by three academics in 1971, Howard Schultz joined it in 1982 and left it to open the II Giornale in 1985, finally, he acquired Starbucks in 1987, became the president and CEO. Until now, Starbucks has 19,435 stores in

7、 more than 50 centuries. By offer beverages, coffee beans and other snacks becomes the world?s premier roaster and retailer of specialty coffee, hasachieved great successin the retail coffee industry. At present, Starbucks focus onextend its international growth, pay attention to Asia market which a

8、s the mostsignificant growth opportunity while slowing its domestic expansion. Starbucksmission is to inspire and nurture the human spirit one person, one cup and oneneighborhood at a time. In addition, according the letter of Howard Schultz to AllStarbucks Partners (2008), the vision of Starbucks i

9、s that it can offer a welcomingexperience for customer, become a warm“ third place” as a part of their daily life witha superior coffee.2. External Analysis2.1 Wider Macro-Environmental AnalysisBased on using the PESTEL Framework (Appendix A), to analysis the wider macro environmental of retail coff

10、ee industry. Generally speaking, the global political environment is stable, social stability, economic development, now the economic situation is getting better, coffee store turning into people leisure life, become a community place, the demand is increasing, coffee become more popular in the worl

11、d,Page 3which is one of the world?s most widely favored beverages. Overall, the macro environment is beneficial to the development of retail coffee industry.Table 1: PESTEL analysis the retail coffee industryPoliticalEconomicSocialGovernment levyingexport quotasTrade restriction tolimited exportsTra

12、de agreementsprovide a stableglobal environmentCoffee become aSuffered from thepopular beveragesglobal economic crisisaround the worldThe large demand ofCoffee satisfied thecoffee beansattitude of leisure lifeCoffee bean prices arePortable coffee fit theaffected by cultivationfast lifestyleand weath

13、erTechnologicalEnvironmentalLegalThe advanced agriculturaltechnology produce high qualityof coffe beanSpecial coffee equipmentsroasting and blending greatcoffee beanJoin in the ConservationInternational s Center forEnvironmental LeadershipMake efforts to recycling instoresAdhere to Labor andEmployme

14、nt regulationsProvide employee insurance and health careObserve the minimum wagerequirements and child laborprovisionsImplement the Food Safety LawProfessional training for theSave water and energy tobaristareduce wasteStick to environmentalprotection lawsPage 42.2 Industry analysisCoffee stores tak

15、es up the speed growth part of the restaurant business, more than 70 billion cups of coffee consumed each year, retail coffee stores have great developing potentiality. However, as many international giants enter the retail coffee industry, especially the chain restaurant, for instance, McDonald lau

16、nched serve coffee, which intensifies the competition further, that is result in the demand of coffee is increasing, the fierce competition also increased the buyer bargaining power. In addition, because the market has been maturity, the industry growth rate is growth slowly. Faced with this situati

17、on, Starbucks need to improve the core competitiveness to achieve the maximum profits in the retail coffee industry (Appendix B).Table 2: The use of Porter?s Five Forces Model to Analysis theretail coffee industryThreat ofNewEntrants(Medium)The powerCompetitiveThe powerof buyersrivalryof suppliers(M

18、edium)(High)(High)Threat ofSubstitutes(Medium)Page 5Threat of entrany：MediumThe demand of technical expertiseA lot of preparatory intemediary inputsHire the special baristaHigh decoration costsHard to match the incumbents distribution channelsHigh adbertising investmentImport high quality coffee bea

19、nThreat of Substitutes： MediumFruit juicesMilkSoft drinksTeaCompetitive rivalry： HighMaturity marketSlowly growth rateBalance competitorsStrong competitors entryLower differentiation of products and serviceThe power of buyers： MediumLow switching costsBuyer negotiation with suppliersBuyers not conce

20、ntratedThe power of suppliers：HighAgricultural technologyWeather conditionThe limitations of government policyPage 62.3 Industry Life CycleThis paragraph analysis the retail coffee industry use of the Porter?s Five Forces framework, which based on analysis the five key forces in the retail coffee in

21、dustry, to indicate the industry feature and industry phase of life cycle. It concluded that the retail coffee industry matured quite, market growth is more slowly, take account of the medium existing barriers, the competitions is also get tougher, markets tend to be more mature. It shows that the r

22、etail coffee industry is in the maturity stage. Because the lower profit in the maturity stage, Starbucks has to develop more diversity productions, change the expansion strategy, fine tune the focus to expand their oversea market to share the market for achieve the higher profits.Table 3: Retail co

23、ffee industry life cycleHighDevelopmentGrowthMaturityDeclineSalesVolumeTimeLowPage 72.4 Competitor AnalysisThere are three mainly strong competitors in retail coffee industry, first is the specialty coffee shops, they have different flavor coffee and different store design compared with Starbucks, f

24、or example, Caribou Coffee and Second Cup Coffee.Second is quick service restaurants, they have huge competitive in coffee industry due to they have huge number of fast-food retailer for bring more convenience to customer; they provide quick service with lower price. A good example for this is McDon

25、ald?s. Third, Donut and Bagel Chains, they have similar services and products with Starbucks, offered fresh brew coffee, but more focus on dessert, Such as Dunkin?s Donuts and Krispy Kreme.2.5 Industry?s Critical Success FactorsTable 4: the critical success factor for the retail coffee industry as f

26、ollowing:Critical Success Factor for the Retail Coffee IndustryStrategic Store LocationAffordable PriceComfortable EnvironmentBrand and ReputationGood Coffee QualitySpecialty Roasting and BrewingDifferent FlavorsInvesting in AdvertisingPage 82.6 Opportunities & ThreatsAccording the SWOT analysis (Ap

27、pendix C), the opportunities and threats existed at present. There are following main opportunities: First of all, Starbucks can expand aggressively abroad through licensing agreements, to operate the outlets in crowed areas. Second, partner with other beverage companies to innovate new taste coffee

28、 or other flavor beverage. Third, by selling handpicked CD to customer and provide digital music for to download as a profit growth point. Forth, Building partner relationship with other international companies will be extended to the international sphere. Further, the Asian market are potentially l

29、ucrative, such India and Vietnam.In term of the threats, firstly, the threats posed by many international giants enter the retail coffee industry, especially the chains restaurant, provide cheaper price coffee. Secondly, coffee beans price increased by limited conditions, like weather or export rest

30、riction, bring about the increasing costs of raw materials. Indeed, the market is becoming saturated, intensifies the coffee store competition further. Moreover, because of Starbucks have a great success in retail coffee industry, generate the copy or imitate the brands by competitors.3. Internal An

31、alysis3.1 Starbucks? Strengths & WeaknessesThere is much strength in Starbucks, most significant, Starbucks has a success brand name, which is the leading retailer and roaster of specialty coffee, has 19,435 stores in more than 50 centuries over the world. It provides the excellent quality coffee an

32、d good customer experience to build a good reputation that is helpful for company long term development. In addition, Starbucks has excellent innovative capability, development new flavor of coffee, such as VIA, Pike Place Roast, are popular by thePage 9consumers. And established widespread distribu

33、te channel and the good commercial credit to dominate the retail coffee industry. Furthermore, it created a good working environment, the good relationship between the managers and employees, list on the 100 Best Companies to Work annually by Fortune magazine.The main weakness of Starbucks is that t

34、he fast grow of retail stores lead to service level decline, the water down of the Starbucks experience. Consequently, expansion to aggressive result in the stores location is more intense, the performance of stores influenced by each others. Other, the products rely on be beverages, the varieties i

35、s not large, has less attractive to customers, especially the people who did not prefer drink coffee. In particular, Starbucks average price is more higher compared with chain restaurant.3.2 Evaluation of Starbucks? Main CapabilitiesTable 5: the main capabilities of StarbucksThe following table eval

36、uated the Starbucks main capabilities in tangible resources and intangible resources (Appendix D).PhysicalRetail storesGood locationSpecialty CoffeeResourceEquipmentTangibleResourcesHumanProfessionalManagementResourceTrained staffteamFinancialInvestmentsStocksAcquisitionsResourcesBrandPatentsGood em

37、ployeeIntangiblerelationshipResourcesIntellectualReputationOrganisationalAmbienceCapitalcultureGoodTechniquesDesignpartnershipPage 103.3 Value Chain AnalysisTable 6: Value chain within StarbucksSupportActivitiesFirm infrastructureThe worldwidecoffee stores, Products distribute worldwide.Provide high

38、 quality of coffee.MarginHuman resource managementRecurring the people who really interesting in coffeeProvide professional training to employees.Provide full health care to staffTechnology developmentProvide diversity productions, developing new flavor coffees.Use special equipment to roasting and

39、brewing coffeeProcurementPurchase green coffee beans.Use purchasing arrangements to control the coffee supplies.InboundOperationOutboundMarketingServiceLogisticsGrindLogisticsand salesAs the thirdImportcoffeeWellPartnerplace ”Margincoffeebeans,coordinatedwithotherbeansroastingdistributioncorporation

40、fromtheandwithtosuppliersbrewing.retailersdistributeoverthePackagingand stores.thecoffeeworld.the coffee.overtheworld.coffeehouseexperiencewith digitalandsocialmediaPrimary activitiesPage 113.4 Starbucks? MainInternalCapabilitiesagainst industry?s CriticalSuccess Factors.Industry s Critical Success

41、FactorsDose Starbucks against these factors?Strategic Store locationYESAffordable PriceNOComfortable EnvironmentYESBrand and ReputationYESGood Coffee QualityYESSpecially Roasting and BrewingYESDifferent flavorsYESInvesting in AdvertisingNOTable 7As the most successful coffee retailer, Starbucks agai

42、nst all the critical successes factors mostly, as for the price and advertising did not match these, it result of the Starbucks strategy, it depend on words to mouth rather than advertising much. Also, it offered the superior coffee with higher price.4. Starbucks? Current ,Issue & Challenges? Diagno

43、sis4.1 Summary of Key IssuesConsidering all the threats and weaknesses that mentioned in the previous sections, it is appears that the following issues exist in Starbucks:Firstly, less competitive advantage compare with other strong competitors after other international giants enter the retail coffe

44、e industry. Especially the chains restaurant, provide cheaper price coffee, they also have location advantages.Page 12Second, the rising prices for coffee beans and dairy lead to cost of production get higher squeeze the margins.Fourth, generate the copy or imitate the brands by competitors because

45、of Starbucks have a great success in retail coffee industry,Fourth, the fast grow of retail stores lead to the Starbucks? service level decline, the water down of the Starbucks experience. Moreover, expansion to aggressive result in the stores location is more intense, the performance of stores infl

46、uenced by each others.Fifth, the market is becoming saturated, profit growth slowly. The downturn economic changed the consumer spending habits is leading to lower consumption.4.2 Starbucks? Current Strategic ChallengesOne of the biggest challenges in Starbucks is keep the excellence experience in s

47、tores and high service level during the period of the stores high speed expansion over the world. More important, more innovation flavors beverage continue to introduced to the market for get more competitive advantage to others competitors. In the current global economic depression, how to occupyin

48、g the market, take larger market sharing for make more profit is also a tough challenges for Starbucks. Furthermore, how to Increase the efficiencies and effectiveness in operating and managing is cannot be ignored.Page 135. Generation of Strategic Options5.1 Description of Starbucks? Competitive St

49、rategyAccording to Porter?s Generic Strategies, there are three types of competitive strategies: Overall cost leadership, Differentiation, focus strategy.Table 8: the Starbucks?competitive strategic optionsStarbucks Competitive Strategic optionsOverallcost Option 1:Price based strategiesleadershipTo

50、ok a gamble by cutting the price of their products, seek alower price than competitors to attractive customers.DifferentiationOption 2 Differentiation strategiesProvide better products and services with higher price to achieve the competitive advantage.FocusOption 3 Focus strategiesProvide high perc

51、eived products and service, offering innovative products or service to meet particular demand of customers.Page 145.2 Strategic DirectionTable 9: use Ansoff matrix to identifying the strategic directions for the strategicoptions.ExistingNewExistingMarketsABOption 1Option 2MarketpenetrationProduct De

52、velopmentConsolidationCDOption 3NewMarket DevelopmentDiversificationPage 155.3 Methods of Pursuing StrategiesBecause of option 1 is focus on market penetration and consolidation, through organic development by develop own capabilities to the cutting price of coffee retail price to get price advantag

53、e to increase the share for market penetration, and enhance the promotion and advertising to attractive new consumers to consolidate the existing market. Acquire coffee industry companies to extending the marketing channel. Option 2 pay attention to product development, in addition to organic develo

54、pment, it mainly through the alliance to pursing the strategy, it will into joint venture with other large enterprise to create new coffee related products. Also it can increase the use more licensing in both domestically and internationally.Option 3 is focus diversification based on the Starbucks p

55、ursuit of vertical integration, this strategy has more risk compare with above strategies. it is radically increase the Starbucks?scope, the most suitable methods for pursuing this strategy is strategic alliances, Starbucks can through joint ventures, licensing agreements to extent the products and

56、markets. In addition, It should be noted that Starbucks never move to Franchising for better control the coffee quality.Page 166. Evaluation of Strategic Options6.1 SuitabilityTable 10: Suitability assessmentStrategic optionsEnvironmentCapabilitycultural influencesGet market shareExploit capabilitie

57、sCultural clashOption 1ExploitsuperiorpricebasedMaintaintheexistingresourcesandSticktowhatthestrategiesmarketshare,Gaincompetencesorganisational culturemore share forpriceadvantage,Option 1ExploitnewExploit researchandMakingcounterDifferentiationopportunitiesindesign,currentculturaldecisionsforstrat

58、egiescurrentsaturatedproductsandrapid growthmarketcapabilitiesOption 3ExploitcorePotentialfor cultureFocus strategiesCreatenewmarket,competencesinnewclashthroughtherequiredformarketfieldmergerandentryacquisitionPage 176.2 FeasibilityTable 11: Feasibility testStrategic optionsFinancial feasibilityRes

59、ource deploymentOption1price based strategiesLowinvestmentmaygainAcquire scale economies, learninghigh profitand competence developmentOption 1Requiredhigh research costExploit capabilitiesDifferentiation strategiesand labor cost.Building on own capabilitiesOption 3RequiredhighcapitalRequired high q

60、uality of resource,Focus strategiesinvestment, strong cash flowdevelop core competencePage 186.3 AcceptabilityTable 12: Acceptability assessmentStrategic optionsReturnRisk degreeCrucialstakeholderreactionOption 1pricebasedLowinvestmentmayMayrequiredstrategiesgain profitable,returnlowfinancial restru