Starbucks case study

Presented by:
Kenza Charaf Mouna Gourram Omar Bouzoubaa Iliass El Assal Ismail Slaoui

Outline
Vision & Mission Proposed Mission Statement Six principles of Starbucks Objectives & Strategies SWOT analysis Matrices EFE matrix IFE matrix SWOT matrix Space matrix Outcomes of Space Matrix Strategies Financial Ratios

Vision & Mission

The Vision statement : To inspire and nurture the human spirit one person, one cup, and one neighbourhood at a time The mission of Starbucks: To establish Starbucks as the premier purveyor of the finest coffee in the world while maintaining our uncompromising principles while we grow

Proposed Mission Statement

Establish Starbucks as the foremost provider of the deluxe coffee in the world and also to be established as the most employee appreciated company even as maintaining our uncompromising principles as we grow mutually with hitech advances

six principles of Starbucks

The six principles of Starbucks are stated as: Provide a great work environment and having engaged employees--another part of the Starbucks experience. Bet on the diversification. High quality of purchasing raw materials. Roasting and fresh delivery of our coffee. Creating an experience and develop satisfied customers in order to earn customer loyalty. Contribute positively to our communities and our environment, and recognize that profitability is essential to our future success.

Objectives :
Our coffee Our partners

Our customers Our stores Our neighbourhood Our Shareholders

SWOT analysis
Strengths High brand equity High end coffees Very good experience Enormous number of locations strong ethical values Exclusive coffee products Weaknesses High prices Offer one flavor Acting just on the coffee industry Coffee being a product of dependency

Opportunities

Threats

Coffee market growing worldwide More competitors focusing on Product diversification to food and nonfood items Selling to other companies Develop international business coffee products (McDonalds, dunkin donuts) Suppliers dependency and rising in the cost of coffee and dairy

Diversifying their business

products.
Financial crisis and recession

Financial Ratios
2008 Current Ratio Quick Ratio Total Liabilities to total assets Profit Margin Equity Ratio Debt to Equity Inventory Turnover Sales Growth Net Income 0.8 0.48 0.56 3% 0.44 1.28 14.98 10.3% -53% 2007 0.787 0.466 0.57 7.1% 0.43 1.34 13.6 20.8% 19.2% 2006 0.79 0.461 0.496 7.2% 0.5 0.98 12.23 NA NA

Matrices

EFE matrix
Key External Factors
Weight Rating Weighted Score

Opportunities Product diversification to food and smoothies Selling to other companies Develop international business Diversifying their business Threats Coffee Products (Macdonald's, Dunkin Donuts) Volatile business environment Financial crisis and recession Total

0.2 0.06 0.1 0.13

4 2 4 2

0.8 0.12 0.4 0.26

0.24 0.08 0.19 1

4 3 2

0.96 0.24 0.38 3.16

IFE matrix
See the hard copy

SWOT matrix
See the hard copy

Space Matrix

X axis

Competitive position (CP) --2 Product quality --3 Market capital share --4 Technological know how --2 Control over distributors

Industry position (IP) +6 Profit potential +5 Growth potential +5 Financial stability +5 ease of entry into market

Average= 5.25 Y axis Average=2.75 Financial position (FP) +4 Cash flow from operations +5 Liquidity +5 Leverage +6 Working Capital +4 Cash Flow from Operations Stability position (SP) --4 Price range competing products --2 Barriers to entry --2 Competitive pressure --5 Barriers to exit --3 Risk involved in Business

Average= 4.8 X axis= 2.50

Average= 3.2 Y axis= 1.6

Outcomes of Space Matrix

Aggressive Profiles:

The space Matrix shows aggressive response of Starbucks. So, the company has to follow these strategies: Horizontal integration, Market penetration Market development