STEP 1: Identify the firm’s existing vision, mission, objectives, and strategies.

VISION

To inspire and nature the human spirit-one person, one cup, and one neighborhood at a time.

MISSION

None in the case study.

OBJECTIVES & STRATEGIES

Our Coffee

It has always been, and will always be, about quality. We’re passionate about ethically sourcing
the finest coffee beans, roasting them with great care, and improving the lives of people who
grow them. We care deeply about all of this; our work is never done.

Our Partners

We’re called partners, because it’s not just a job, it’s our passion. Together, we embrace
diversity to create a place where each of us can be ourselves. We always treat each other with
respect and dignity. And we hold each other to that standard.

Our Customer

When we are fully engaged, we connect with, laugh with, and uplift the lives of our customers-
even if just for a few moments. Sure, it starts with the promise of a perfectly made beverage,
but our work goes far beyond that. It’s really about human connection.

Our Stores

When our customers feel this sense of belonging, our stores become a haven, a break from the
various outside, a place where you can meet with friends. It’s about enjoyment at the speed of
life- sometimes slow and savored, sometimes faster. Always full of humanity.
Our Neighborhood

Every store is part of a community, and we take our responsibility to be good neighbors
seriously. We want to be invited in wherever we do business. We can be a force for positive
action- bringing together our partners, customers, and the community to contribute every day.
Now we see that our responsibility and our potential for good is even larger. The world is
looking to Starbucks to set the new standard, yet again. We will lead.

Our Shareholders

We know that as we deliver in each of these areas, we enjoy the kind of success that rewards
our shareholders. We are fully accountable to get each of these elements right so that
Starbucks and everyone it touches can endure and thrive.
STEP 2: Develop vision and mission statements for the organization.

VISION

To establish Starbucks as the most recognized and respected brand in the world and become a
national company with values and guiding principles that employee could be proud of.

MISSION

Establish Starbucks as the premier purveyor1 of the finest coffee in the world and also to be
established as the most employee valued company while maintaining our uncompromising
principles as we grow together with technological advances. Provide a great work environment
and treat each other with respect and dignity. Embrace diversity as an essential component in
the way we do business. Apply the highest standards of excellence to the purchasing, roasting
and fresh delivery of our coffee. Develop enthusiastically satisfied customers all of the time.
Contribute positively to our communities and our environment. Recognize that profitability is
essential to our future success.
STEP 3: Identify the organization’s external opportunities and threats.

Opportunities

1. Globalization makes it easy to enter international market such as United States, Canada
and nine other markets.
2. Consumers are more prefer on organic or healthy product.
3. Recent trends have shown that more educated people bought coffee.
4. Coffee growth increase 13 percent and 59 percent respectively.

Threats

1. Current recession may impact the sales because the purchasing power of the consumer
reduces.
2. Entry barrier in the international market.
3. People started to become more health-conscious.
4. Many companies such as Dunkin Donut and Mc Donald’s are pricing their product
cheaper to impress customers.
5. The 2007-2009 global recession negatively affected the specialty coffee industry.
STEP 4: Construct a Competitive Profile Matrix (CPM)

Starbucks Dunkin’s Donuts McDonald’s

CRITICAL WEIGHT RATING WT RATING WT RATING WT
SUCCESS FACTOR (WT) SCORE SCORE SCORE
Advertising 0.10 4 0.40 3 0.30 4 0.40
Product Quality 0.15 4 0.60 2 0.30 3 0.45
Price Competitiveness 0.05 2 0.10 3 0.15 3 0.15
Management Experience 0.05 3 0.15 3 0.15 2 0.10
Financial position 0.05 3 0.15 2 0.10 3 0.15
Organization Structure 0.05 3 0.15 2 0.10 2 0.10
Production capacity 0.05 2 0.10 2 0.10 2 0.10
E-commerce 0.05 4 0.20 3 0.15 3 0.15
Customer loyalty 0.10 3 0.30 2 0.20 2 0.20
Global expansion 0.13 4 0.52 2 0.26 2 0.26
Employee benefits 0.10 4 0.40 2 0.20 2 0.20
Customer Service 0.12 3 0.36 2 0.34 2 0.34
TOTAL 1.00 3.43 2.35 2.60

STEP 5: Construct an External Factor Evaluation (EFE) Matrix

Key External Factors

Opportunities Weight Rating Weighted
 Score
Globalization makes it easy to enter international 0.16 4 0.64
market such as United States, Canada and nine
other markets.
Consumers are more prefer on organic or healthy 0.11 3 0.33
product.
Recent trends have shown that more educated 0.12 2 0.24
people bought coffee.
Coffee growth increase 13 percent and 59 percent 0.09 3 0.27
respectively.
Threats
Current recession may impact the sales because the 0.14 3 0.42
purchasing power of the consumer reduces.
Entry barrier in the international market. 0.12 2 0.24
People started to become more health-conscious. 0.08 3 0.24
Many companies such as Dunkin Donut and Mc 0.10 3 0.30
Donald’s are pricing their product cheaper to
impress customers.
The 2007-2009 global recession negatively affected 0.08 3 0.24
the specialty coffee industry.
Total 1.00 2.92

STEP 6: Identify the organization’s internal strengths and weakness

Strengths

1. Closing approximately 425 company operated stores on the United States.

2. Adding of approximately 60 company related stores internationally.
3. Open approximately 65 net new licensed stores in the United States and
approximately 320 net new licensed stores internationally.
 4. Total revenue increase from 2006-2008.
5. Gross profit increase from 2006-2008.
6. Industry market leader.
7. High visibility locations to attract customers.

Weaknesses

1. Pricing are higher as compared to the competitors.

2. Order dependency on coffee and coffee related products.
3. Closed number of stores in different countries during year 2008-2009.
4. Loss net income $ 4,061,000 in 2008.
5. Operating loss in 2008 with loss of $ 442,039.
6. Total liabilities increases from 2006-2008.
7. Starbuck has hired less employees although they have approximately 900 companies
or stores.
8. International operating income decreased to $ 60 million for the second quarter of
fiscal 2009 versus $ 17.8 million of the same period year ago.

STEP 8: Prepare a Strengths-Weaknesses-Opportunities-Threats (SWOT) matrix

STRENGTHS WEAKNESSES
S1. W1.
Huge market expansion to United Pricing are higher as compared
Kingdom, Canada and nine other to the competitors.
markets. W2.
S2. Over dependency on coffee and
Adding of approximately 60 coffee related products.
company related stores W3.
 internationally. Closed number of stores in
S3. different countries during year
Open approximately 65 net new 2008-2009.
licensed stores in the United W4.
States and approximately 320 net Loss net income $ 4,061,000 in
new licensed stores 2008.
internationally. W5.
S4. Operating loss in 2008 with loss
Total revenue increase from 2006- of $ 442,039.
2008. W6.
S5. Total liabilities increases from
Gross profit increase from 2006- 2006-2008.
2008. W7.
S6. Starbuck has hired less
Industry market leader. employees although they have
S7. approximately 900 companies or
High visibility locations to stores.
attract customers. W8.
International operating income
decreased to $ 60 million for the
second quarter of fiscal 2009
versus $ 17.8 million of the
same period year ago.

OPPORTUNITIES SO Strategies WO Strategies

O1.
Globalization makes it easy to Market penetration and expansion Starbucks products are not
enter international market such in few countries such as United available at supermarket or
as United States, Canada and Kingdom, Canada and nine other other shops as they are making
nine other markets. countries. expansion into retail operations
O2. (S1, O3, O6) and even whole bean sales in
Consumers are more prefer on supermarket.
organic or healthy product. Industry market leader whereas it (W1, O5, 09)
O3. expand into retail operations
Recent trends have shown that (S7,O5) Closed number of stores during
more educated people bought year 2008-2009 and less control
coffee. Do advertisements about the free over stores outside the U.S
O4. internet connections and the where it exists with new
Coffee growth increase 13 excellent service they provide. distribution channels (shop
percent and 59 percent (S2,S4,O3,O1) online).
respectively. (W6, W7, O4)

Reduce the price and Advertise

the products all over the places.
(W2,O2,O7)

Do R&D to sell products at

supermarkets without reducing
the quality with lower price.
(W1,W3,O8)

THREATS ST Strategies WT Strategies

T1.
Current recession may impact High visibility location to attract Pricing are higher as compared
the sales because the customers at the same time many to the competitors while many
purchasing power of the companies are pricing cheaper to companies are pricing their
consumer reduces. impress customers as well. products cheaper to impress
T2. (S4, T9) their customers and current
Entry barrier in the recession may impact the
international market. Starbucks needs to change its company’s sales as well.
T3. market strategy by reducing the (W2, T9)
People started to become more price to compete with the
health-conscious. competitors. Protect against the company on
T4. (T1,T9,S3) different issues where facing
Many companies such as huge resistance in international
Dunkin Donut and Mc Donald’s countries over few issues and
are pricing their product labor union issues in U.S as well
cheaper to impress customers. as international countries.
T5. (W8, T5, T7)
The 2007-2009 global recession
negatively affected the Starbucks needs to analyze the
specialty coffee industry. way to reduce the risks of selling
its coffee products at
supermarkets as customers are
demanding for it.
(T8,W1,W7)

Give Advantages and Disadvantages of Alternative Strategies

Research and Development

Advantages

 Increase the profitability

• Open new markets

• Enhance brand & gain a reputation as an innovative business

 • Attract the best employees through your enhanced reputation

• Find new business partnerships

• Attract external finance

• Reduce costs

• Improve the quality of your offer

• Get product to market more quickly

Disadvantages

 Risk