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summarized by
Andi S. BoedimanStrategic Innovation Consultant
andisboediman@gmail.com
www.ideonomics.com
History
• Founded in 1971.• Coffee, tea, and spice store.• Named in honor of the first mate in
Herman Melville’s Moby Dick.
History• 1982: Schultz enters as head of marketing• 1987: Jerry and Gordon sold Starbucks and Giornale
acquired it making Howard Schultz the CEO and the name changed to Starbucks Corporation.
• 1996: Starbucks and Dreyer's Grand Ice Cream, Inc. introduces Starbucks® Ice Cream and Ice Cream bars, making Starbucks the number one brand of coffee ice cream in the U.S.
• Began selling bottled Frappuccino• 1998: Introduced a lighter and milder tasting line of
coffee and Tiazzi, a mixture of tea, fruit juice, and ice.• Through Kraft Foods begins to extending the Starbucks
brand into grocery stores
History2004• Began its in-store CD burning service, allowing
customers to create personalized CDs at the Starbucks Hear Music
• Through Tazo and Kraft Foods they began distributing Tazo super-premium teas in U.S. grocery stores.
• Jim Beam Brands Co. agrees to develop and market Starbucks-branded coffee liqueur outside of Starbucks stores.
• Through XM Satellite Radio, Starbucks offers a 24-hour "Starbucks Hear Music" channel.
• Introduced a new Frappuccino, a light blended coffee beverage
Howard Schultz• Kitchen appliance
salesman• Hired by Starbucks in
1982• Trip to Milan in 1983• Left the company in
1985• Bought the company in
1987
Mission Statement
• To establish Starbucks as the premier purveyor of the finest coffee in the world, while maintaining our uncompromising principles while we grow.
Culture
• Third Space (after home & work)
• Employee Focus• Corporate Social Responsibility
http://www.starbucks.com/aboutus/environment.asp
6 Principles• 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.http://www.starbucks.com/aboutus/environment.asp
6 Principles
• 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.
http://www.starbucks.com/aboutus/environment.asp
Strengths
• The product is strongly differentiated from those of rivals
• Strong brand-name image/company reputation
• Good supply chain management • Better product quality relative to
rivals• Wide geographic coverage• Joint ventures
Weaknesses
• Leverage the brand to other that has to be proven to strengthen the brand portfolio strategy such as Hear Music
Opportunities
• Expanding into new geographic markets
• Expanding the company’s product line to meet a broader range pf customer needs
• Joint ventures that can expand the firm’s market coverage or boost its competitive capability
Threats
• Loss of sales to substitute products • Restrictions trade polices on the part
of foreign government• Entry of product new competitors
Attributes
• Command a premium price for its product
• Increase unit sales• Gain buyer loyalty to its brand
Starbucks Today
• Starbucks now has approximately 6,294 coffeehouses in North America alone,
• And they have approximately 900 locations outside of North America.
• In 1991, Starbucks became the first privately owned company to offer a stock option program to all of their employees.
• Higher employee satisfaction leads to lower turnover rates, which in turn leads to lower employee training costs, which leads to greater profits.
• Starbucks also gives back to the community, both local and abroad.
• This provides Starbucks with plenty of good publicity.
• Starbucks also takes great interest in its suppliers well-beings.
What major bookstore is a Starbucks most likely to be found inside?
• In 1993, Starbucks Corporation started a relationship with Barnes and Nobles, Inc.
Since, they have won accounts with many other companies, such as:
• Sheraton Hotels (now Starwood Hotels)
• United Airlines• Nordstrom• Canadian Bookstore
Chapter
• Westin Hotels• Canadian Airlines• Kraft Foods (to extend
into grocery stores)• Hyatt Hotels Corp.
Hear Music™ Brand Portfolio
Hear MusicMedia Bars
Hear MusicCoffeehouses
& Stores
Hear MusicXM 75
Hear MusicRecord Label
& CD Sales
• Starbucks brand is about the in-store experience• Designed to enhance the sensory signals• Hear Music = “Starbucks” coffeehouse music• Allows the customer to interact and create their own
music, thus enriching the experience
Hear Music™ Brand Portfolio
Products• 66 Exclusive & Co-
Produced Titles– Artist Choice– Opus Collections– In Store Playlists
• Selected Artists & Albums
Price• Mid to High + $2
Place• Starbucks Coffee
Shops• Hear Music Stores• Hear Music WebsitePromotion• In Store• Press (Grammy
Award)• Online• XM Radio
Hear MusicMedia Bars
Hear MusicCoffeehouses
& Stores
Hear MusicXM 75
Hear MusicRecord Label
& CD Sales
Hear Music™ Brand Portfolio
Product
• XM Channel 75 Launched in Oct 2004
• The Voice of Music at Starbucks
Price
• $7.99/MonthPlace & Promotion
• Satellite Radio Receiver
• Online
Promotion
• In Store
• Press
• Online
• XM Radio
Hear MusicMedia Bars
Hear MusicCoffeehouses
& Stores
Hear MusicXM 75
Hear MusicRecord Label
& CD Sales
Hear Music™ Brand Portfolio
Product
• Unique stores that encourage customers to discover music through personal interaction
• Customers can create personal compilations
• Library of 250,000+ titles available for mixing
• Large selection of titles available for sale
Price
• $6.95 for 5 songs + $1 for each additional tune
Place & Promotion
• Berkeley
• Santa MonicaPromotion
• Press
• Online
Hear MusicMedia Bars
Hear MusicCoffeehouses
& Stores
Hear MusicXM 75
Hear MusicRecord Label
& CD Sales
Hear Music™ Brand Portfolio
Product
• Interactive CD creation within Starbucks Stores
• Customers can create personal compilations
• Library of 250,000+ titles available for mixing
• Large selection of titles available for sale
Price• $6.95 for 5 songs +
$1 for each additional tune
Place & Promotion• 45 stores throughout
Austin, TX & SeattlePromotion• Press• Online• Stores
Hear MusicMedia Bars
Hear MusicCoffeehouses
& Stores
Hear MusicXM 75
Hear MusicRecord Label
& CD Sales
Hear Music Brand Weaknesses• Low Awareness
– 19% of those surveyed made no association with Starbucks– Many could not make the connection between Hear Music
and Starbucks without prompting• Wrong usage occasion for extended music interaction
– Starbucks coffee shops largely “on the go” & business customer
– Most music consumers do not think of Starbucks as a destination for music
– Ability to download to a digital media player• Unclear Target Audience
– Starbucks persona vs. technically challenged– Starbucks coffee customer vs. Music Purveyor
• Mixed Messages– Starbucks Music vs. Variety of Music
CARE
• Starbucks distributes funds in response to any natural disasters that may occur in countries where their coffee and tea originate.
Starbucks Foundation
• Created by the Chairman of Starbucks, Howard Schultz.
• Dedicated to creating hope, discovery, and opportunity in communities where Starbucks are located.
Support Conservation International’s Conservation Coffee Program
• Encourages ecologically sound coffee growing practices.
Keeping it Fresh
• Starbucks tries to introduce a few new beverage ideas every year, just to keep things interesting.
summarized by
Andi S. BoedimanStrategic Innovation Consultant
andisboediman@gmail.com
www.ideonomics.com
notes
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