Revision- Starbucks case study

Starbucks

Starbucks is an Amercian global coffee company. There are about 20,891 stores in 62 countries. Starbucks established in 1971 as a Seattle coffee beans roaster and retailer by three partners.

From this graph, it describes the number of starbucks shops  have a significant increase within 30 years. Especially, from the 2001 to 2007, the date rise from 4000 stores to 17000 stores.

Firstly, in this case study, I will do the SWOT anlysis,  the SWOT is a tool help people to identify the strengths, weaknesses, opportunities and threats. The SWOT is a basic,straight forward model to analysis a company what they need to do an what they can not do.  It  show the company's potential opportunities and threats.

Strengths. W. O. T





The starbucks shop's locations are often in the marked places, such as the city centre, large shopping mall, high-end residential. It can attract amout of customers.The starbucks is a global coffee brand. It has almost 19000 cafes in 62 countries. The high quality products and services are also streagths.The starbucks have good relations with the suppliers. In addition, the organization has strong ethical values and ethical mission statement as follow," starbucks is committed to a role of environment leadershio in all facts of our business". Because of  these facts, the consumer loyalty is very high.

From this chart, we can know from 2009 to 2013, the revenue and EPS are have an significantly rise, the date of EPS increased quicker than the Revenue, the starbucks is a public limited company, the invester and the shareholders earned lots of money from the starbucks.

In 2011, the starbucks profit margins were hit seriously by the global financial crisis, however, the company covered quickly, it increased 12.7% in 2012. The starbucks famous brand name and the high customers loyalty help the company recovered quikly.

In 2013, the starbucks opened aout 1200 new shops, many in the United States and China.

S. Weakness. O.T

The starbucks faces strong competitions. The McDonald's, Burger King, wendy's, Subway and the Taco Bell 's market share in the US in 2005 are larger than the starbucks. The McDonal's market share is 7.7%, the Burger King's market share is 2.4%, the Wendy's and the Subway's market share are 2.3% and 2.2%. The Taco Bell and the starbucks's market share are 1.7% and 1.6%.

There are few new products development and creativity. Their innovation may flater over time.

Global coffee beans price influence the starbucks's profit.

High product prices in some counties also make the starbuck's maret share lower than other company.

The McDonald's premium coffee price was lower than the starbucks.

Some negative publicity (Health Problems,; Tax evasions; poor treatment of suppliers)

The starbucks does not grow its own coffee beans, it must depand on the coffee suppliers.

S.W.Opportunities.T

1. Develop new products and new services.
2. Starbucks has may opportunities to expand its global operations. Develop new market such as India, China and any other Pacific Rin.
3. Co-branding with other companies to develop other companies food and drinks (offer wine and beer)
4. Technoligical advances( new coffee machines etc)
5. The starbucks should form more of such partnerships and offer  coffee to some big supermarket.
6. To extend supplier network.

S.W.O.Threats

• Different cultural and Political issue in foreign countries.
• Consumer trends towards more healthy lifestyles. They think people should away from coffeeine
• Coffee price volatilty in developing countires.
• In the US mareket, the coffee market is saturation.
• Due to the political, economic and weather condition, the supplier line may disruption, it will increase the cost of the firm.
• Trademark infrigement. Some company illegal use the brand of starbucks.

Ways to global and growth strategies

• Horizontal integration
• Starbucks combine with its competitor.eg It introduced a drink of coffee with Pepsi through joint ventures. In this way, they can decrease the loss of competition. This product was accepted by the customers and creating a win-win effect.

• Vertical integration
• Starbucks is trying to control its input. Direct control of suppliers and their roasted coffee plants. The safety of their first-class coffee beans to meet growing demand and grower and exporter, check te agricultural environment and crop yield, and look for variety and source: will conform to the starbucks strict standards of quality and taste.



Globalization

Recent years, the globalization become one of the most controversial subjects. It changes millions people's lives. The economics have been encourages by the globalization. People who come different coutries can communication very well.


Definition:
"Globalization is the tendency of businesses, technologies, or philosophies to spread throughout the world, or the process of making this happen. "Margaret Rouse 2007
"Economic globalisation is the international integraton of goods, technology, informaton, labour, capital or the process of making this happen."

Four events encourage the globalization:

1. In 1990, the sovient Union collapse.

2. In the mid 1990's, China under the leadership of Deng Xiaoping had carried on the reform and opening up. 

3.After 1998, the Internet developed quickly.

4. After 2000, the India become the world centre.

 

Five forces encourage the globalization:

1. Political: EU and NAFTA preferential trading agreements, openning up economies of communist nations to global competition.

2. Teconological: Internet encourage the small companies to compete globally.

3. Market and Costs: Saturated domestic markets force businesses to move markets.

4. Living standard: Developing countries want to have high living standard.

5. Competitive: Developing countries compete with developed countries.

Good example- Global industries.

1. Apple

There are  11 countries have the apple retail store. Online stores access in 37 countries. Products can be easily purchased through the web and stores. Information about apple can easily find all over the world. Many manifacaries in other countries,such as China, Phillippines.Not restricted to one region, prodution line distrubted all over the world, globally.

2. COCA COLA

The coca-cola industry follow other countries taste and culture, it created many new products, thi strategies can earn more profits.

In India, the coca-cola's market share was in the third, it behind the Pepsi and the local drink Thums-up.

3. Starbucks

The starbucks is the NO.1 coffee brand in the world , it valued about $4 billion. One advantages of the starbucks is gives its customers high quality products and services. Perfect blended coffee,  premium music, friendly staffs and warm atmosphere.

Bad Example

Google in China

why did china banned Google?

1.  The local search engine Baidu which has now more than 80% of the market. 

2. The Chinese government take this action to shield themselves from foreign espionage while people using search engines and the social media networks.

3. Google does not want to be involved in the "government censorship"-restricting people from sites the Chinese government does not want people know. Some information break the China law.

How To Go Global !

Internal Strategies

• company try to sell goods in the other countries. open the oversea markets.
• invest in the oversea markets. Establishing operations in other countries.
• E-Commerce. Consumers can buy the products online.

these  method, the companies can control in their own countries

External Strategies

There are 5 ways  the companies go to other countries to control their global activities.

1. Joint Venture

eg. the US fast food industries cooperate with Turkish private equity business

2. Strategic Alliance

eg. Star Alliance and one world

3. Franchising

two or more companies become a single business

4. Merger

5. Acquisitions