Defining the Business and the Effects

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Defining the Business and the Effects
David Ryan Joanne Kee Ann Milligan Maura
McCallion Laura Hillis
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(No Transcript)
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Executive Summary

• Starbucks is one of the worlds most recognised
  brands
• Interbrand placed Starbucks in 88th place in 2000
• Regarded as one of the worlds fastest growing
  world brands

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Industry Trends

• June 2004 - total UK coffee shop market - 8090
  units
• Forecast to grow by a compound rate of 5.1 from
  June 2004 to December 2006
• Branded segment represents approximately 28.4 of
  this market, up from 25.8 in December 2001
• (Mintel 2004)

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Branding

• When people drink coffee its not just the
  taste, its the brand, the idea, the environment,
  these things are just as important as the product
  itself. Starbucks for example has a very strong
  brand.
• Leigh Sparks, Professor of retail studies at
  Stirling University

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Branded Coffee Market Development

• Café Culture UK
• 1950- 60s - tea and coffee shops
• 1960-90s - pub culture
• Society changes
• Fashion change
• Bespoke demand
• Branded Coffee

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Branded Sector Growth

• Compound annual rate of 15.7 between 2000 2004
• Forecast 10.7 between 2004 2006
• Outlets predicted to increase from 2,299 units in
  2004 to 2,965 in 2006 (UK)
• (Mintel 2004)

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Market Positioning
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Target Sectors
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Local Perception
High Quality
Starbucks
Clements
Esquires
Roscoffs
Premium Price
Economy Price
MacDonalds
Low Quality
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UK Competitor Analysis
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Financial Results- Revenue
www.thismoney.com
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Financial Results- Profit
www.thismoney.com
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Starbucks History

• 1971 Small coffee shop, Pike Place, Seattle
• 1987 Six shops, new investors expanded
• 1992 Became a publicly traded company
• 1998 Entered UK market
• 2003 Fortuna 500 company
• 2004 Entered Northern Ireland market
• 2004 8,500 stores worldwide, 90 000 staff

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Defining the Business

• Great Coffee (Arabica Beans)
• Educating consumer taste
• 3rd Place experience, place between home and
  work
• Diversification music, coffee machines,
  financial services

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Product Portfolio
Café Misto Café Au Lait Cafè Americano Cafè
Latte Cafè Mocha Cappuccino Caramel
Macchiato Caramel Mocha Cinnamon Spice
Mocha Eggnog Latte Espresso Espresso con Panna
Espresso Macchiato Gingerbread Latte Peppermint
Mocha Pumpkin Spice Latte Syrup Flavoured
Latte Toffee Nut Latte White Chocolate Mocha Iced
Caffè Americano Iced Caffè Latte Iced Caffè
Mocha Iced Caramel Macchiato Iced Syrup Flavored
Latte Iced White Chocolate Mocha
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Whats Important?

• Partners
• Customer satisfaction
• Product service quality
• Convenience
• Community engagement
• Environmental/green agenda
• Shareholder value

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• Mission Statement

To establish Starbucks as the premier purveyor of
the finest coffee in the world while maintaining
our uncompromising principles as we grow.
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6 Guiding Principles

• Customer satisfaction
• Community contribution
• Profitability
• Work Environment
• Embrace Diversity
• Business Excellence

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Strategy

• Strong on relationship marketing- internal and
  external
• SBU geographical location in relation to
  approach taken to working with particular
  community
• Friendly community clusters with similar brands
• Environmental

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Growth Strategy

• 1998, Starbucks entered the European market
• Entered NI Market 2004
• Junction One, Antrim, May 2004
• Castle Place, Belfast, Aug 2004
• Castlecourt, Belfast, Nov 2004
• Belfast International Airport
• (Planned)
• Strategy - clustering

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• Social, environmental and economic benefits for
  Starbucks communities
• Supporting growers
• Supporting local communities
• In NI Steeple Association, Antrim
• UK National Literacy Trust

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Oxfam

• Starbucks joint venture 2004
• To support local farmers in irrigation, seeds,
  tools and literacy
• Aimed at stabilising global coffee crisis
• Based in East Hararge region of Ethiopia
• One year pilot
• Worth 100,000
• Financial Times, 14 October 2004, P27

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Relationship Marketing

• Intuitive marketing
• Deeper level of understanding
• Reputation by word of mouth
• Subtle advertising of new stores
• Limited advert budget
• Brand recognition

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Analysis
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Porters 5 Forces Model
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The Future

• Product diversification
• Financial Services
• CD Creation and Music download
• Wireless internet
• Market Saturation
• Countering Anti Globalisation concerns
• CSR development
• Seasonal diversification of products
• Increase Fair Trade Coffee

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Conclusion

• Starbucks is one of the worlds most recognised
  brands
• Interbrand placed Starbucks in 88th place in 2000
• Regarded as one of the worlds fastest growing
  world brands

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THE END
David Ryan Joanne Kee Ann Milligan Maura
McCallion Laura Hillis