Starbucks

Group members: Sana Riaz (Reg. No. 0185) Saira Khalid (Reg. No. 0201) Umaira Iqbal (Reg. No. 0026) Sabahat Riaz (Reg. No. 0213) Ayman Umer (Reg. No. 0020) Hifza Azeem (Reg. No. 0075) Hina Naseem (Reg. No. 0067) Zunera Mazhar (Reg. No. 0039)

Vision statement “Establish Starbucks as the premier provider of finest coffee in the world maintaining our uncompromising principles while we grow”

Mission statement To inspire and nurture the human spirit – one person, one cup and one neighborhood at a time.

History

Introduction Founded in 1971 Founders are: Gorden Bowker Jerry Baldwin Zev Siegl

Year 1982 “Howard Schultz” joined Chairman and CEO of Starbucks

Number of Branches Year Branches 1987 17 1997 1412 2007 15011 2011 17017

Location on map (USA)

Location on map (world)

Situation (2008) Launched internet website Created facebook fan page and twitter account. Opened stores in Argentina, Bulgaria, Belgium, Portugal and Czech Republic Stores = 16680

Current situation (year 2013) Partnership agreement with Green Mountain Coffee roaster Launched “TWEET-A-COFFEE” Opened stores in Vietnam and Monaco Total stores = 19767 Brand value = $14213 million

products

products

Strategy formulation framework

The input stage By:

Strategy Formulation Framework Stage 1: The input stage IFE Matrix EFE Matrix CPM

IFE Matrix Sr. No. Strengths Weight Rating Weighted average score 1 Quality 0.09 3 0.27 2 Ventures 0.08 4 0.32 Worldwide operations 0.06 0.24 Regional focus 0.10 0.30 5 Good management 0.36 6 Environment of store 0.05 0.15 7 Internal R&D department

IFE Matrix Sr. No. Weaknesses Weight Rating Weighted average score 1 Heavy losses 0.09 2 Lower credit ratings 0.08 3 Increase in debt 0.10 0.20 4 Deteriorating trends 0.06 5 Corporate restructuring due to losses 0.07 0.14 6 Pulled to give Discounts Total 2.52

EFE matrix Sr. No. Opportunities Weight Rating Weighted average score 1 Favorable rates of foreign currency 0.09 2 Roasted bean popularity 0.10 3 0.3 Serving fresh donuts 0.11 0.22 4 Offering branded products in retail stores 0.07 5 60% population use coffee in USA 0.36

EFE MATRIX Sr. No. Threats Weight Rating Weighted average score 1 Constant threat from McDonalds 0.2 4 0.8 2 Home delivery services 0.3 1.2 3 Global recession 0.04 0.12 Total 3.16

CPM (Competitive Profile Matrix) Star Bucks McDonald’s Dunkin Donuts

The Matching Stage By:

Strategy Formulation Framework Stage 2: The matching stage SWOT Matrix SPACE Matrix BCG Matrix IE Matrix Grand Strategy Matrix

SWOT Matrix

SWOT SO WO ST WT Strengths Weaknesses Opportunities 2 S + 1 O Ventures Worldwide operations Regional focus Good management Environment of store Internal R&D department Quality Services Weaknesses Heavy losses Lower credit ratings Increase in debt Deteriorating trends Corporate restructuring due to losses Pulled to give Discounts Opportunities Favorable rates of foreign currency Roasted bean popularity Serving fresh donuts Offering branded products in retail stores 60% population use coffee in USA 2 S + 1 O 7 S + 5 O Market penetration 1 W + 4 O Market development Threats Constant threat from McDonalds Home delivery services Global recession 1 S + 1 T Joint Venture 6 S + 3 T Promotional assessment 5 W + 3 T Retrenchment SWOT SO WO ST WT

SPACE Matrix

Environment Stability Financial Strength Rate EPS 0.71 +5 Liquidity 0.79 +3 Leverage 0.56 Working Capital -441700 +2 ROE 12.67 Total +20 Environment Stability Rate Rate of inflation -5 Price change of competing products -4 Barrier to entry Competitive pressure Ease of exit -2 Risk involved -3 Total -23 Competitive Advantages Rate Market share -5 Product Quality -6 Product life cycle -3 Customer loyalty Competition Capacity utilization -4 Technological know how Control over supplier & distributor total -35 Industry strength Rate Growth Potential +6 Profit potential +5 Financial stability Resource utilization Ease of entry +4 Productivity Capital utilization Total +34

Calculation X-axis = CA+IS = -35+34 = -1 Y-axis = FS+ES = +20-23 = -3 Financial Stability +17 Industrial Strength +29 Environmental Analysis -20 Competitive Advantage -35 X-axis = CA+IS = -35+34 = -1 Y-axis = FS+ES = +20-23 = -3

? BCG Matrix Relative market share US EU Industry sale growth rate Asia

IE Matrix Strong Average Weak 3.0 to 4.0 2.0 to 2.99 1.0 to 1.99 High Medium 2.0 to 2.99 Low 1.0 to 1.99

Grand Strategy Matrix

RAPID MARKET GROWTH Quadrant II Market development Market penetration Product development Horizontal integration Divestiture Liquidation Quadrant I Market development Market penetration Product development Forward integration Backward integration Horizontal integration Concentric diversification WEAK COMPETITIVE POSITION STRONG COMPETITIVE POSITION Quadrant III Retrenchment Concentric diversification Horizontal diversification Conglomerate diversification Liquidation Quadrant IV Concentric diversification Horizontal diversification Conglomerate diversification Joint ventures SLOW MARKET GROWTH

Grand Strategy Matrix

The decision making stage By:

Quantitative Strategic Planning Matrix (QSPM) Stage 3: The decision making stage Quantitative Strategic Planning Matrix (QSPM)