GREAT EASTERN INSTITUTE
5 J Catalan St., San Isidro, La Paz, Tarlac
Building bridges to the future…
Senior High School Department
GROUP MEMBERS:
Abuel, Shantel
Clemente, Jeanne Kyla
Gamurot, Cheris Shaine
Manuel, John Prits
Silvestre, Jamelle
Paynor, Zairon
SECTION: 12- ABM
SUBJECT: Entrepreneurship
SUBJECT TEACHER: Charyl Navarro
STARBUCK COMPANY
Starbuck Company Background
● Starbucks was founded by Jerry Baldwin, Gordon Bowker, and Zev Siegl, opening its first store in 1971
near the historic Pike Place Market in Seattle.
● Kevin Johnson is president and chief executive officer for Starbucks.
● Starbucks Corporation is the leading roaster, retailer, and marketer of specialty coffee in the world. Its
operations include upwards of 7,300 coffee shops and kiosks in the United States, and nearly 3,000 in
34 other countries, with the largest numbers located in Japan, Canada, the United Kingdom, China,
Taiwan, South Korea, the Philippines, Thailand, Malaysia, Mexico, Australia, Germany, and New
Zealand. in total Starbucks operates in 31,256 stores worldwide.
● Starbucks’ net revenue reached 19.16 billion U.S. dollars in 2020, reflecting a 27.7 percent drop from
the previous year. The global coffeehouse chain has seen a year-over-year increase in revenue for the
past decade, except for the decline in 2020 which could be attributed to the stay-at-home measure
implemented due to the coronavirus pandemic.
Vision and Mission
Starbuck’s vision statement is “To establish Starbucks as the premier purveyor of the finest coffee in the
world while maintaining our uncompromising principles while we grow.” It outlines the critical
achievements the company must realize to rank and maintain itself as a top brand within this sector.
Starbuck’s mission statement is “To inspire and nurture the human spirit – one person, one cup, and one
neighborhood at a time.” It is a statement that brings out critical customer-centric elements of the company.
The mission statement starts by emphasizing the primary role of the firm towards its customers, while at the
same time stressing the importance of its client towards the continued growth of the company.
GREAT EASTERN INSTITUTE
5 J Catalan St., San Isidro, La Paz, Tarlac
Building bridges to the future…
Senior High School Department
SWOT Analysis
STARBUCKS STRENGTH:
1. Strong brand image
- Starbucks Corporation is the most popular and strongest brand in the food and beverage
industry.
2. Growth in stores
- It increased its number of stores from 1,886 to 31,256 between 1998 and 2019.
3. Strong financial performance
- With annual revenue of $26.5 billion and a profit of $3.6 Billion in the fiscal year 2019, Starbucks
has a strong financial position in the market.
4. Extensive international supply chain
- Starbucks is known to have an extensive global network of suppliers.
5. Acquisitions
- The company has acquired the top 6 companies including Seattle’s Best Coffee, Teavana,
Tazo, Evolution Fresh, Torrefazione Italia Coffee, and Ethos Water.
6. Moderate diversification
- Starbucks has also diversified its business operations by introducing innovative merchandise
and food items. One such example is the addition of ice cubes made of Coffee which results in
a stronger Coffee flavor.
7. Quality, Taste, and Standardization
- Due to its premium blends and delicious coffees, Starbucks has extended globally. It offers
excellent quality and consistently standardized products in all locations.
8. Efficiency, Strategic Planning, and Reinvestment Strategy
- Starbucks reinvests its profits in expanding its business in different locations.
9. Employee treatment
- It treats its employees very well which eventually translates into happier employees serving
customers well.
10. Strong Loyalty Program
- Starbucks has a great reward program that keeps customers addicted to its coffee.
GREAT EASTERN INSTITUTE
5 J Catalan St., San Isidro, La Paz, Tarlac
Building bridges to the future…
Senior High School Department
11. Gender-Neutral Restrooms
- Starbucks has introduced gender-neutral restrooms to protect the Lesbian, gay, bisexual, and
transgender community against discrimination.
STARBUCKS WEAKNESSES:
1. High prices
- For many middle tiers and working consumers, Starbucks’ offerings are more costly than
McDonald’s and other coffee outlets. Its high prices reduce affordability for the consumers.
2. Imitability of products
- Other coffee shops and food chains like McDonald’s McCafe and Dunkin Donuts offer almost
the same products.
3. Generalized standards for most products
- Some of its product offerings are not aligned with the cultural standards of other markets.
4. European Tax avoidance
- Due to its tax avoidance in the UK, it faced several controversies and criticisms. Reuters’
investigation found out that it didn’t pay tax on its £1.3 billion of sales in three years prior to
2012.
5. Procurement Practices
- Many social and environmental activists criticized the company for its unethical procurement
practices. They claimed that it procures coffee beans from impoverished third-world farmers. It
has also been accused of violating “Fair Coffee Trade” principles.
6. Recall of Products
- Over the years Starbucks has recalled a lot of in-demand products. This can negatively affect
the brand image of the company and lead to the loss of the customer base.
STARBUCK OPPORTUNITIES:
1. Expansion in developing markets
GREAT EASTERN INSTITUTE
5 J Catalan St., San Isidro, La Paz, Tarlac
Building bridges to the future…
Senior High School Department
- Starbucks has coffeehouses mainly in the US. Global expansion in emerging economies such
as India, China, and few regions of Africa can give a great opportunity to the company.
2. Business diversification and Products Specifications
- It can further diversify its business operations to improve overall revenue growth opportunities.
3. Introducing new products
- As the company is quite popular, introducing new products and holiday flavors (Peppermint
Mocha, Eggnog Latte, Gingerbread Loaf) under its name would be profitable and welcomed in
the markets.
4. Partnerships or alliances with other firms
- Co-branding always benefits. Starbucks has the opportunity to develop partnerships and
alliances with major firms. This would strengthen its presence and market share.
5. Exploit Latest Coffee Trends and Technologies
- From best foam technology to snap-chilling, back to black, and RSI-reducing gizmos, there are
endless possibilities offered by the latest coffee trends and technologies.
6. Adopt Price Differentiation
- Starbucks can offer regular coffee that is priced lower to capture the middle-class while serving
its expensive variety as premium.
7. Strengthen Online Channels
- The pandemic has discouraged in-store consumption with more coffee drinkers opting for take-
away. Starbucks can strengthen its online sales channels to attract more customers to pick their
coffee curbside or in pickup locations.
8. Coffee Delivery Service
- Currently, customers rely on Uber Eats, Grubhub, and Postmates for their Starbucks coffee
delivery. Starbucks can start its own coffee delivery service for a better customer experience.
9. Coffee Subscription
- Starbucks can also try a new coffee subscription business model to expand its customer base.
STARBUCKS THREATS:
1. Competition with low-cost coffee sellers
GREAT EASTERN INSTITUTE
5 J Catalan St., San Isidro, La Paz, Tarlac
Building bridges to the future…
Senior High School Department
-Many coffeehouses offer products at an affordable rate. This can threaten the future’s stability of
Starbucks which offers higher prices.
2. Competition with big outlets
- Aggressive competition with multinational companies like Dunkin Donuts and McDonald’s can
also pose a threat to its market position.
3. Imitation
- Products can be imitated by both new and old rivals.
4. Third-party Delivery Suppliers (union) Strike
- Starbucks’ supply chain consists of many third-party contractors and stakeholders, which makes
it difficult to manage the entire chain effectively.
5. Independent coffeehouse movements
- There are many socio-cultural threats for Starbucks. These sociocultural movements support
small independent and local coffeehouses and oppose the expansion of large multinational
chains.
6. Controversy on California warning rule
- A California judge ruled Starbucks and other companies in March 2018 to provide warning
labels on all their coffee products. This was about preventing a violation from chemical use that
may cause cancer.
7. Philadelphia arrests
- In April 2018, two African-American men were arrested at Starbucks that caused quite a
controversy on social media against Starbucks. Starbucks employees refused to use the
restroom because they didn’t purchase anything. The CEO Kevin Johnson issued an apology to
both men eventually.
8. Coronavirus / Pandemic
- Starbucks has temporarily closed estimated 2000 stores in China due to the outbreak of
coronavirus as well in other countries that might result in loss of income
9. Global Recession
- Experts are predicting the ongoing recession would be worse than previous economic
downturns. Starbucks’ revenue has already dropped.
10. Rising Prices of Raw Coffee Beans
- Any additional dollar channeled to purchase raw coffee beans at an increased price reduces
Starbucks’ profitability cause by the pandemic hoarding the supply chain disruption.
GREAT EASTERN INSTITUTE
5 J Catalan St., San Isidro, La Paz, Tarlac
Building bridges to the future…
Senior High School Department
Conclusion:
Our conclusion is Starbucks company is still growing its own product developing it by following based on what
is in the trend. With this, the company is indeed has a strong core using coffee but they also need to focus on
other beverages like teas and juices to make their growth faster. Also for Starbucks Company, For them to be
able to manage with the pandemic and their competitors they need to try investing in using apps for online
purchasing and delivering their products because a large part of its customer uses mobile apps for purchases.
Starbucks should focus on this area for more growth. We recommend them to Reduce the prices of the
products to attract more customers and increase the affordability for all classes of consumers.
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