06-10-2012, 03:17 PM
Starbucks
Starbucks.ppt (Size: 211 KB / Downloads: 141)
Introduction to Starbucks
Company started in 1971 in Seattle, Washington
Grew from 55 stores in 1989 to over 2,200 stores today
Products sold include:
- beverages - pastries
- whole coffee beans - coffee-related retail items
Industry Definition
Specialty Eatery Industry
Fits within the largest segment of disposable income spending -- food and beverages
Steady growth in this segment in the 1990’s has led to an abundant number of new companies
As demand for convenience has made eating out a normal routine, the demand for specialty food services has increased in recent years
Industry and Competitive Analysis
Market Structure
Monopolistic Competition
Competitive Activity
Many companies are in the market and competition is fierce
Competitors use location, product mix, and store atmosphere differentiation to establish market niche
Industry Costs and Capital Structure
Low to moderate costs for each location
Major start-up expenditures are property and equipment
Major operating costs are labor and cost of sales
Industry PEST Analysis
Political Influences
Relationships between coffee producing nations and US
State & Local government controls
Economic Influences
Constant demand for food and beverages
Changes in disposable income could influence purchase levels
Social Influences
Consumer preferences could shift from coffee to other beverages
Technological Influences
Use of technology can improve operational efficiencies
Starbucks Corporate Strategy
Maximize market penetration
Provide a relaxing, attractive social atmosphere
Offer high-quality products
Create a great working environment
Achieve profitability
Site Characteristics
Leased store located on Central Street in Wellesley
Store has over 1,000 square feet of retail space and 1,000 square feet of office and storage space in the basement
Second most profitable store in the fourteen store region
Located one block away from Commuter Rail train station and in busy retail shopping area
Only one direct competitor (Au Bon Pain) in the area
Site 7-S Analysis
Strategy
Store’s strategy is to create a comfortable Third Place environment
Serve customer a customized high-quality product
Achieve high level of profitability by focusing on high-margin items while generating add-on sales
Minimize overall expenses by focusing on controllable expenses
Skills
Most important skills include “people skills” and drink preparation ability
Partners receive training to learn about products, brewing methods, and sales techniques
Retraining mainly occurs during new product roll-outs, although this site does not use regular meetings, but instead one-to-one discourse