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STARBUCKS:
More than Just Great coffee.
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Company presentation:

Starbucks Corporation is an American company present in

through the world thanks to their famous coffee chain. Partly
in franchise, it is the largest chain of its kind in the
world. Starbucks establishments sell exclusively their
own brand of coffee (ground or beans), tea, drinks,
pastries, utensils, and coffee machines, but
the company primarily aims to "offer an experience-
consumer (deliver consumer experience in English), it is-
to offer its customers a unique service that they will not find elsewhere
not in the cafés of another brand (comfort, calm...).
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Starbucks in numbers:

. 24.72 billion $ in revenue . 110.2 billion $ is the value

in 2018 business merchants.

. 32.180 of store in the . 227,000 employees in 2020

entire world. (estimation).

. 78 countries where Starbucks is . 1.37 billion dollars in revenue

present. business.
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Company history:

The first Starbucks store opened in Seattle in 1971 by three

partenaires : Jerry Baldwin, un professeur d'anglais, Zev Siegl, un
history professor, and the writer Gordon Bowker. The three
entrepreneurs were inspired by roaster Alfred Peet, that they
personally knew, and open their first business
to sell high-quality Juliette coffee beans and
coffee machines. The three friends enroll in the hippie period and
the standardized and industrialized consumer society4the
foundation of their company representing thus according to the professor
of history Bryant Simon an example of countercultural capitalism.
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Function of the company:

President:
Kevin Johnson

Financial management:
Patrick Grismer

Management of
Marketing: Research and
development resources
Brady brewer humans
Hans mellote
Angela is
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Macroeconomic environment of the company:

A-Economic constraints:

The price of coffee is very volatile (e.g. Freeze of 1994 in Brazil, the price
the coffee price goes from $1.26 per pound to $1.80/pound or in 2010 where the
coffee prices have soared dramatically following some
climatic problems in the main exporting countries.
Starbucks is therefore forced to align its prices with the current market.
market to avoid accumulating too much loss. (There is a
development of fair trade between the Northern countries and
the Southern countries.)
 B-Political constraints:

- A large part of the coffee-exporting countries are developing countries.

often in conflict (Colombia, Cuba, Ethiopia, Nigeria,...) Moreover, some conflicts
between exporting and importing countries takes place, such as Ethiopia which demands
that the origin of coffee should be indicated on their product, which may lead to a
Boycott of Starbucks products.

C-Sociological constraints:

Having stores in different countries, Starbucks must face challenges.

sociological and cultural constraints. The approach will be different if a
The boutique Starbucks is located in China, the United States, or France. Because
that they did not take into account the sociological nature of the French by
example that Starbucks had some problems making profits
in this country because the French enjoy moments of relaxation
preferred cafés on-site rather than takeout. Some countries
some will prefer a strong coffee, others a mild coffee, one must know how to play with the
different cultures in order to increase its clientele.
 D- Technological constraints:

- Competition being fierce, the company Starbucks must constantly

increase its budget for research and development. Not counting
the increase in the espresso machine market (such as
Nespresso and the ease of making good coffee thanks to the pods (such as
than Senseo). These machines allow for a quality equivalent to
that of coffee shop bars at home. Starbucks must constantly innovate.
to keep its clientele loyal.

E-Environmental constraints:

The raw materials that Starbucks uses are mostly

climate-dependent. The main raw material, coffee,
the main exporters which are Colombia, Brazil, and Vietnam have
suffered significant climate damage that slowed production. In 2009
Vietnam experienced a rather intense rainy season, which slowed down the
In production, Brazil experienced a decline of 20%. Furthermore, every two years the
Arabica coffee plants should no longer be exploited to allow them to
time to regenerate which affects production.
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Microeconomic environment of
the company:

. A- Clients:

. Starbucks targets students, young professionals, employees and

intellectual professions type entrepreneur. These are mainly
young people aged 15 to 29, very urban who consume Starbucks.
Out of 25 people, 18 are familiar with Starbucks, either closely or remotely.
However, out of these 18 people, only 10 have already
consumed Starbucks products, so we observe that
Starbucks has many customers and a good reputation.
 B- Concurrent:

Starbucks remains today the global leader of coffee shops; its success fuels the
covetousness. Indeed, its main competitor in the Anglo-Saxon market, Costa
Coffee has just been bought by the Coca-Cola Group. Moreover, JAB is already forming
a real challenger in the US market with its various acquisitions in the sector.
The major competitor of Starbucks is McDonald's with its McCafe concept.
McCafé prices are lower than those of Starbucks, but the drink sizes.
is lesser and Starbucks aims to be perceived more as a quality coffee shop a bit
chic.
 C- Positioning of the company:

The company Starbucks currently has a positioning in the niche of selling

quality coffee, roasted on-site, with a very tasting environment
sought: the design of the places is refined so that customers feel comfortable there.
as at home. Today, many choices are possible in the
making his coffee, but also in the selection of his milk, which allows
to have a finally quite wide range of coffees. Starbucks specializes
in the café, and has so far generally refused to do any catering,
so to a very limited range of tasting products (only a few
pastries), and still centered around coffee.

The goal of Starbucks stores is originally to offer its customers a

personal places, where they will feel good (we talk about "third place":
the one in addition to his home and his workplace).
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Starbucks in the era of covid-19:
. The company's revenue fell by 5% to 6.7 billion dollars.
the three months ending on December 27, which correspond to the first
quarter of its 2020/21 fiscal year. Sales to the number of stores
comparables, the preferred measure in commerce, also decreased by 5%
overall. The stores received fewer orders (-19%) but their
the average price was higher (+17%). The trends clearly diverged on
the two main markets of the group: sales fell by 5% in the United States.
United but have progressed by 5% during the same period in China. The net profit
The group's revenue fell by 30% over the year to reach 622 million dollars.
Reported per share and adjusted for exceptional items, the profit exceeds
however, analysts' expectations reached 61 cents compared to 55 cents
anticipated. Starbucks also opened 278 new stores in the
period, and by the end of December counted 32,938. Among them, 51% were managed
directly by the company, the rest being held by franchisees.
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Analyze SWOT:
A- Forces:

["Notoriety","Quality","Beautiful and strong image","Customization"]

Profitability - Renowned global coffee brand - its employees - strong
ethical values - adopt a socially responsible attitude - the
sense of welcome - emphasizes details - Uses every critique
pour s’améliorer - la possibilité de graver des CDs dans certaines
boutiques - The company chooses its own coffee. - The company
has 4 factories in York, Kent, Carson, and Amsterdam and many
other roasting sites. -Has its own transportation company,
which allows for a gain of time, money, and management.
 B-Weaknesses :

- Standardization - On implantation - Massification (a Starbucks can be found at

every street corner and sometimes even one directly across from the other) - High prices -
remains vulnerable to an innovation - present in the United States - The company is
dependent on a main competitive advantage which is coffee sales - of
financial performance of the group - The economic crisis negatively affects
the company's financial results and especially its financial resources which are
reduced, as well as the company's liquidity in general - the value of
the brand is losing steam - Sizes that verge on the ridiculous in name and volume ('tall,
Large, Venti » and a new size the « trenta » which holds about 1L of
drink)
 C- Opportunities:

New products and services can be offered as

products respecting fair trade - The company can expand
easily abroad and take advantage of the opportunities it offers - Achieve
partnerships with other companies and franchising its brand for
goods and services that have good potential - Consumer willingness
to buy a product that has added value not only in taste but
also beneficial for the environment, its health...etc. The
consumers would therefore be willing to pay an additional cost, if the
products offered to him have all these characteristics. - Asia has
a huge growth potential, especially in China, due to evolution
the tastes of its inhabitants. - Customers' expectation to have access to a
wider range of products (food or related services) - Wide range
distribution channels of coffee: Café/restaurant, large distribution
distributors.
 D- Threats:

The coffee market is not a particularly stable market and the company
is dependent on it. - Starbucks has been experiencing the rise in prices for several years now.
["price of coffee and milk - The brand's competitors are very numerous -The"]
Scandals with coffee producers could tarnish the brand's image
Example: The trade conflict between Ethiopia and Starbucks in 2006.
becoming a multinational, Starbucks chose as a model of
development the standardization of its cafes, its products and its methods
of consumption. This mode of growth necessarily opposes certain
local consumption habits. - Saturation of the American market and low
growth of the European market in terms of coffee consumption
Consumers' concerns about "junk food", drinks too
sweet, caloric, caffeine, etc. - Boycott for political reasons (conflicts
in the Middle East that can provoke anti-American sentiments) -Phase
of the maturity of the European and American markets.
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Conclusion:

. One can therefore observe that Starbucks is a multinational that has

a good marketing sector that knows how to use it without spending too much
money on advertising and other frills to sell its products.
Thanks to more or less free advertising through word of mouth
ear, social networks and stars addicted to cardboard coffee,
Starbucks can afford to buy a brand image
to attract more customers. In conclusion, Starbucks is
far from bankruptcy but some modifications need to be made, like
stop the over-implantation of Starbucks stores (example Santa
It counts 560 Starbucks within a radius of 40km) and to review its
policy for establishment in foreign countries.
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Thank you for

your attention:
Work done by:
Harmache Souhaib.