GROUP NAME:

AFSHEEN KHAN
AREEBA IMTIAZ
SAIRA IQBAL

DATE OF SUBMISSION : 20
TH
SEPTEMBER
2014

COURSE: SUPPLY CHAIN MANAGEMENT

SUBMITTED TO : MISS SEEMA

ASSIGNMENT NO: 1

JINNAH UNIVERSITY FOR WOMEN



INTRODUCTION
Starbucks Corporation, doing business as Starbucks Coffee, is an American global coffee
company and coffeehouse chain based in Seattle, Washington. Starbucks is the largest
coffeehouse company in the world, with 23,305 stores in 65 countries and territories, including
13,049 in the United States, 1,909 in China, 1,555 in Canada, 1,089 in Japan and 927 in the
United Kingdom.

Starbucks locations serve hot and cold beverages, whole-bean coffee, micro ground instant
coffee, full-leaf teas, pastries, and snacks. Most stores also sell pre-packaged food items, hot
and cold sandwiches, and items such as mugs and tumblers. Starbucks Evenings locations also
offer a variety of beers, wines, and appetizers after 4pm. Through the Starbucks Entertainment
division and Hear Music brand, the company also markets books, music, and film. Many of the
company's products are seasonal or specific to the locality of the store. Starbucks-brand ice
cream and coffee are also offered at grocery stores.

From Starbucks' founding in 1971 as a Seattle coffee bean roaster and retailer, the company
has expanded rapidly. Since 1987, Starbucks has opened on average two new stores every day.
Starbucks had been profitable as a local company in Seattle in the early 1980s but lost money
on its late 1980s expansion into the Midwest and British Columbia. Its fortunes did not reverse
until the fiscal year of 1989-1990, when it registered a small profit of $812,000. By the time it
expanded into California in 1991 it had become trendy. The first store outside the United
States or Canada opened in Tokyo in 1996, and overseas stores now constitute almost one
third of Starbucks' stores. The company planned to open a net of 900 new stores outside of the
United States in 2009, but has announced 300 store closures in the United States since 2008.

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SWOT ANALYSIS

STRENGTHS

Starbucks is the leading retailer and roaster for brand specialty coffee in the
world.
Starbucks has been referred to as a global coffee house with approximately
9000 coffee houses across the globe.
Brand image with the motto The Starbucks Experience. Starbucks is known
for providing
High quality of product & service.
Flavors variation.
Limited number of strong competitors.
High market share and market growth.
Worldwide resources for coffee beans
Diverse distribution channels, such as grocery stores, convenience stores and
department stores
Staffs personality making customers want to come again
Weaknesses

High pricing which cost not all kind of market could buy Starbucks products.
Too focus on US (company origin) market.
Starbucks refuses to guarantee that milk, beverages, chocolate, ice cream,
and baked goods sold in the companys stores are free of genetically-
modified ingredients.
Because of its perfectness of employees service, some employees complaints
about the management which push them to always be perfect. That is why
they make Starbucks Workers Union.
Starbucks lacks creativity & innovation in terms of new product
development.
Aggressive growth which has led to cannibalization of sales.
Over-reliance on coffee and coffee related products.
Brand image becoming a mere commodity with rapid expansion.
Lack of menu for kids.
External Origin.



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SWOT ANALYSIS

OPPORTUNITIES

The potential employees are educated people which make it easier to train
them.
Customer is not price sensitive.
Could be able to change negative image of coffee into positive one.
Financial support.
Could diverse their product not only in coffee.
Most of the Starbucks coffees are made using organic beans.
Introduction of new products or up gradation of the menu will act as one of
the major opportunity for Starbucks.
Contact and contracts with foreign exporters.
Excellent relationship with suppliers
Worldwide resources for coffee beans
Some degree of control over suppliers
Global expansion

THREAT

Global financial crisis which make peoples tend not to spend too much
money.
Low income in southeast Asian countries makes it hard for Starbucks to
penetrate more market segmentation.
Critics said that it exploits farm workers in third countries.
It said that Starbucks domination driving small cafes out of business.
Issues stated that Starbucks exploit their workers by paying a very minimum
wage with a very high standard of work they need to fulfill.
Threats of substitute products and services include other drink items such as
colas, teas or juices that are sold in retails
Threats from the immediate competitors such as Costa Coffee, caribou
coffee, Dunkin Brands, coffee served at McDonalds.
Saturation in the specialty coffee market
Growing competition from domestic brands and new entrants.
Many companies are selling their coffee cheap just to increase their
customer base




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CRITICAL SUCCESS FACTOR

FIRST MOVER ADVANTAGE:
Starbucks is an organization that opted for various strategies to attract most of
the customers within the coffee industry. The main reason Starbucks had a well-
established future in all parts of the globe was due to the strategic decisions
made to move & expand its stores.

NOW:
Starbucks is now in a state of enjoying the first mover advantage as being known
as the best coffee globally.
FUTURE:
Using the market acceptance strength as pioneer in coffee industry Starbucks can
continue as leader and even gain more share in the market in future.

THE CATALOG:
Another critical success factor for Starbucks is to send the orders via Catalog.
The catalog provides the customers an opportunity to order packed coffee beans
from all across the globe.

NOW:
Catalog is an effective tool for Starbucks now as customers has the liberty to
choose their favorite blend of coffee.
FUTURE:
Enhancing their catalog a bit more, Starbucks can increase their customer base
globally.

EMPLOYEE SATISFACTION:
One of the major success factors for Starbucks in the coffee industry refers to the
satisfaction of employees. It has been seen that, at Starbucks high levels of cost
& time has been invested to attain highest quality employees.

NOW:
Training the employees and maintaining their satisfaction is acting as a
competitive advantage for Starbucks success now as employees are returning
their best at work.
FUTURE:
Training, motivation and satisfaction will provide as Starbucks edge of success as
the new era will be so professional that lack of employee satisfaction may result
a disaster for even market leaders like Starbucks.

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CRITICAL SUCCESS FACTOR

MAINTAINING THE QUALITY OF ARABICA BEANS:
To provide best of the Arabica beans, Starbucks opted various types of strategies
in order to secure the supply chain. In spite of enjoying a dominant market share
in the coffee industry, Starbucks has never tried to utilize its power by reducing
the prices of the beans or compromising on the quality of coffee. Instead they
tried to form a strategic alliance to encourage social change.
NOW:
Starbucks is very curious for picking the best ever beans for the coffee which is
providing a larger span of share and dominancy in the current market.
FUTURE:
Starbucks will have an competitive edge if they continue providing the best
supply chain for its high quality standard.

THE THIRD PLACE:
In a dynamic environment, it is an important task to develop a feeling of
community. At Starbucks, tries to provide a feeling of community when the
customers enter through the doors. Starbucks tries to provide a third place,
where in the people can sit & get away from their daily routine. Starbucks
provides an ambience which offers casual social interactions.
NOW:
Nowadays people all over the world are finding comfort zone and Market giants
like Starbucks are providing them that, so customers show loyalty.
FUTURE:
In the future people will more likely to be a place rather their homes or
workplace, a place which can provide them stress free zone for a change.
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OVERALL STRATEGIC FIT:

This report deals with a Strategic Fit Analysis of Starbucks. Strategic Fit states the
level to which an organization is matching its resources and capabilities with the
opportunities in the external environment. When we establish competitive
advantage over competitors we must have the knowledge about the strengths,
weaknesses, threats and opportunities which have been discussed in the report.
Starbucks is one of the leading brands within the specialty coffee industry.
Starbucks enjoyed many opportunities but one of the key chances is to expand
its operations. This means that opening more number of stores at different
locations worldwide which is one of the strengths of Starbucks. The critical
success factors have been followed at starbucks which adds strength .The
company implement varies forceful strategies, like the company uses the catalogs
in order to attract number of customers. They maintaining the quality and
satisfying the customers. Starbucks is matching Critial Success Factor, with a
satisfactory level of effectiveness which helps to contribute the long term growth
of the economy. Thats why Starbuck is the leader roaster and retailer of specialty
coffee in all over the world.
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RECOMMENDATIONS:
Recommendations for further growth of Starbucks have been highlighted as
follows:

Increase international expansion: The first & foremost recommendation for
Starbucks would be to increase its existence in international countries
(excluding US). Aggressive marketing strategies shall be followed at Starbucks
to expand its operations.

Continuous Improvements in the coffee: It would be quite an important task
for Starbucks to continually improve the taste of the coffee. In order to
improve the quality of coffee, Starbucks shall analyze its brewing systems on
timely basis and consider renovations.

Reduce cost to reduce price in order to survive in the current financial crises.

Depend on international alliances in the international stores to focus on the
domestic market to avoid competition, as the domestic market is the main
source of revenue

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