essay strategy of starbucks

<span class="text_page_counter">Trang 1</span><div class="page_container" data-page="1">

BỘ GIÁO GIỤC VÀ ĐÀO TẠO

<b>TRƯỜNG ĐẠI HỌC FPT</b>

<b>Strategy of StarBucks</b>

</div><span class="text_page_counter">Trang 2</span><div class="page_container" data-page="2">

<b>PHẦN 3.STARBUCK’S BUSINESS AREA...3</b>

<b>PHẦN 4.BUSINESS SITUATION OF STARBUCKS...4</b>

<b>6.4 Some typical campaigns...11</b>

<b>6.5 Divisional, functional level strategy...12</b>

</div><span class="text_page_counter">Trang 4</span><div class="page_container" data-page="4">

<b>PHẦN 1. OVERVIEW OF STARBUCKS1.1Introduction</b>

The first Starbucks coffee shop was established at 2000 Western Avenue (Seattle,Washington) on March 30, 1971 by 3 people: Jerry Baldwin, English teacher, Zev Siegl,history teacher, and Gordon Bowker, Writer.

Inspired by Alfred Peet, founder of Peet's Coffee & Tea, the Starbucks foundersoriginally purchased green coffee beans from Peet's. Some time later, the shop moved to1912 Pike Place, where it still exists, and they also started buying coffee beans directlyfrom the farms.

Starbucks is headquartered in Seattle, Washington, USA. Over 40 years ofestablishment and development, Starbucks not only confined itself to Seattle or the US,but even spread beyond the continent, bringing the modern art of enjoying Italian coffeeto other countries such as Japan, Hong Kong, South Africa…

Starbucks coffee brand now has more than 20,000 stores in 61 countries around theworld with 150,000 employees. Its employees in the US earn an average of $8.8 an hourand are insured with some stock options. More than 65% of Starbucks stores are locatedin the US.

The Starbucks coffee brand now serves more than 40 million customers a week andsells 4 billion cups of coffee a year. Starbucks does not have a franchise policy and doesnot intend to do so in the future.

<b>1.2Outstanding Achievement</b>

Success with the first Starbucks store in Tokyo led to the opening of 25 new storesin Japan in 1998. Starbucks management agreed from the outset of the company'smassive expansion program that all The stores will be owned and operated by thecompany instead of pursuing a franchise model like most other successful US foodservice companies.

Starbucks has a myriad of real-world achievements that influence its operations,such as advertising, product quality, competitive value, market share, global expansion,customer benefits, and consistency. of customers and committed to the benefits ofemployees. Each of the basic success factors has its own importance, and they all have arating of one to four.

Years later, Starbucks enjoyed continued growth. Starbucks continued to expandits ambitious international growth strategies in 2004 and 2005, adding stores in France,Jordan, the Republic of Ireland and the Bahamas. In the 2006 financial year, the companyplanned to open 1,800 stores – more than they had opened during the first 25 years of thecompany's history.

</div><span class="text_page_counter">Trang 5</span><div class="page_container" data-page="5">

<b>PHẦN 2. MISSION AND VISON</b>

When building a brand, starbuck clearly states its mission of starting and endingwith core values and those values arising from relationships with people. That meansstarbuck not only has good coffee but also a cultural space. It is a comfortable relaxingspace, to do that, Starbuck creates its own style with a professional service team,providing the best service to customers. They have cooperated with many publishers tobring out the best and new coffee publications to customers.

Today, when coming to any Starbucks cafe, customers can not only drink coffee butalso read newspapers and work. All of those things of starbucks are developed and followthe set mission. That was also the vision of Starbucks when it was founded. They alwaysadhere to that vision.

In addition, Starbucks also makes a statement of its mission to the environment:Understand environmental issues and share that information with our associates.Develop solutions, initiatives and flexibility to deliver change.

Striving to buy, sell and use environmentally friendly productsRealizing financial responsibility is essential to our environmental futureMaking environmental responsibility a company value

Measure and track progress on a project-by-project basisEncourage all associates to join our mission

Starbucks remains true to its values while innovating and exceeding customerexpectations. Their aim is to embrace the local market and the global market, bringingnew inspiration every day with a cup of premium coffee.

In 2004, Starbucks was ranked eighth by Fortune magazine as one of America'smost loved companies.

In 2005 the World Environment Center awarded Starbucks coffee company theannual gold medal of the 21st century for its achievements in international cooperation ina proven development project.

In 2005 and 2006 Starbucks' work in the UK community was recognized byBusiness in the Community with an award.

</div><span class="text_page_counter">Trang 6</span><div class="page_container" data-page="6">

<b>PHẦN 3. STARBUCK’S BUSINESS AREA</b>

Starbucks is one of the best known coffee brands in the world. Not only was itsuccessful in the coffee business, Starbucks entered the music business in 1999 with theacquisition of the Hear Music Company, and then jumped into the movie business in2006 with the establishment of Starbucks Entertainment Company.

The new company is one of the producers of the film Akeelah and the Bee (Akeelahand the bee) and Starbucks stores heavily promoted the film prior to its release.In addition, Starbucks also cooperates with Apple computer company to sell music discs at Starbucks stores. In October 2006, Apple added a box of Starbucks Entertainment studios to Apple's iTunes Store website to sell music products. In September 2007, Apple announced that there would be wireless communication between the two companies.

</div><span class="text_page_counter">Trang 7</span><div class="page_container" data-page="7">

<b>PHẦN 4. BUSINESS SITUATION OF STARBUCKS</b>

Not expanding massively like many other coffee chains, the number of Starbucksstores is quite small compared to Highlands Coffee, Trung Nguyen or The Coffee House.The company that operates Starbucks in Vietnam lost nearly VND 102 billion last year.Instead of choosing prime locations like before, this cafe chain is opening smaller storesas well as selling on e-commerce platforms.

According to Statista data updated to April this year, Starbucks currently has 76stores in Vietnam - ranking in the Top of the chains with the most number of stores.However, this number is still quite small compared to competitors such as HighlandsCoffee (478), Trung Nguyen (454) and The Coffee House (146). The scale of StarbucksVietnam is also far behind this chain in some other Southeast Asian countries such asIndonesia (487 stores) or Thailand (425) (Statista data as of October 2021).

Although the number of stores is only half, the revenue in 2021 of StarbucksVietnam is 555 billion VND - higher than The Coffee House's 475 billion VND. Likemany other coffee brands, the sales of both chains have tended to decrease in the last 3years. The Covid-19 pandemic forced food and beverage chains to close for a long timeto implement regulations on social distancing. Many Vietnamese F&B businesses havestruggled to survive for more than 2 years.

The gross profit margin of Starbucks Vietnam in 2019 is about 19.3% and by 2021is only 1.3%. This rate is quite low when compared to Highlands Coffee or The CoffeeHouse. Highlands Coffee's gross profit margin is in the range of 60-70% in the last 3years. One of the reasons for this is that Starbucks Vietnam has to import a lot of rawmaterials - making cost of goods a large part of revenue.

</div><span class="text_page_counter">Trang 8</span><div class="page_container" data-page="8">

<b>PHẦN 5. SWOT5.1Strengths</b>

Regarding the strengths in the SWOT model of Starbucks, this brand has someoutstanding strengths below.

Starbucks is a corporation with an extremely solid financial foundation. In 2020,Starbucks has an annual revenue of about $26.5 billion and a profit of about $3.6 billion.This is truly a record business result, further highlighting the performance of Starbucks.5.1.3 Moderate diversification through branch stores

The company is also increasingly diversifying its business lines. Examples includemergers or development of affiliates such as Ethos Water, Seattle's Best Coffee, andTeavana. Diversification has reduced the negative impact of market and industry risks.

Besides strengths, Starbucks also has weaknesses that need to be overcome. Someof the main weaknesses in Starbucks' SWOT model can be mentioned as follows: 5.2.1 Uncompetitive price

Starbucks drinks are often more expensive than the competition. In the past, whenthere were few coffee shops, Starbucks drinks were considered "luxury" brand drinks andStarbucks also put all its efforts to improve the quality of coffee to match the price. .

However, now, when coffee shops appear more, the price of high-end products is aweakness of Starbucks

5.2.2 Product lacks uniqueness

Despite having been introduced to the public for a long time with a diverse drinkmenu, Starbucks products are still considered to be lacking in originality. Starbucks doesnot own any unique products to give the brand a prominent product strength.

To capitalize on strengths and overcome weaknesses, Starbucks can seize a numberof beneficial opportunities to grow its brand and increase sales

</div><span class="text_page_counter">Trang 9</span><div class="page_container" data-page="9">

5.3.1 social media marketing

Currently, most of business customers access the Internet and use social networkingplatforms (Social Media) every day. According to the statistics of Statista.com in 2020,the average person spends 135 minutes a day using social networks.

With undeniable popularity, Social Media is clearly an effective platform forbusinesses to reach a large number of customers, deploy appropriate Marketingcampaigns to attract them and increase the rate of customers. convert.

5.3.2 Great demand in developing market

In developing countries, building the foundation for the brand may take a long time,however, the demand for exchange of local customers is high, so once a solid foundationis established, the opening of more doors can be expanded. Starbucks products are just anovernight thing.

Besides the opportunities, Starbucks also needs to face a number of challenges. Themain challenges in Starbucks SWOT analysis can be listed as follows:

5.4.1 High level of competion

Many Starbucks competitors are willing to reduce prices to attract customers, so thiswill be a factor that threatens the future stability of Starbucks. With high prices,Starbucks will have a challenge in convincing customers to choose its products overcompetitors' products.

5.4.2 Economic depression

During previous recessions, Starbucks revenue and profit plummeted, and the samehappened in Q2's 2020 fiscal year when revenue fell 5% and Q3 fell 38%, partly due tothe impact of the Covid-19 pandemic.

</div><span class="text_page_counter">Trang 10</span><div class="page_container" data-page="10">

<b>PHẦN 6. BUSINESS STRATEGY OF STARBUCKS6.1Globalization straegy</b>

Through the chart, we see that Starbucks operates most of the world's key coffeeconsumption markets such as North America, Europe, and Asia, where there are countrieswith the highest average coffee consumption. in the world such as: Finland, Sweden,Iceland, Germany, UK, USA, Korea, Japan.. In the North American market, Starbuckshas the most stores (more than 16,300 stores), then to Asia with nearly 9000 shop.Revenues from these markets also vary significantly. Looking at the chart below, NorthAmerica, the key market where Starbuck has the most stores, continues to be the marketthat brings the highest sales over the years, the 2nd place belongs to Asia Pacificcountries. and China.

In its early years, Starbucks brought a breath of fresh air to American drinking culture. The people of the United States, from those who only know coffee as acommon drink, have gradually considered coffee an indispensable part of life, a drinkthat can be found anywhere. , any street in the whole country. And Starbucks is a symbolof America's coffee culture.

coffee-6.1.1 Special flavor

Starbucks attracts customers by offering an espresso of exceptional quality.Starbucks only buys the best Arabica coffee grown in the highlands, the only coffee thatcan withstand the heat in the dark roasting process and it is the same process that makesArabica taste even more complete. Later, when Starbucks created new flavors of milk andice cream, it also became a new attraction in Latte, Frappuccino, Dark caramel...6.1.2 Icon

Since its establishment, the name Starbucks has been impressed by the meaning ofcreating the feeling of traditional seafaring trips of coffee merchants in the past and the

</div><span class="text_page_counter">Trang 11</span><div class="page_container" data-page="11">

the past and always inspiring us and propelling us towards the future. And she It's also apromise, an invitation to us to find what we're looking for, even if it's something we'venever imagined.

In addition, the Starbucks logo is blue, which is a fresh and attention-grabbing colorthat will stimulate the appetite, including the meaning of health, freshness and calm, italso shows Starbucks as a green business. , a business for the community. The meaning ofthe brand name and logo and slogan has been conveyed by starbucks to all coffeedrinkers not only in the US but also in all starbucks coffee drinkers in other countries.6.1.3 Space

Not only stopping there, "third place" - the third place is the word that many peopleknow about Starbucks. The creation of a third space, after home and work, has broughtStarbucks a success because it defines a space with a more social identity, where peoplecan hang out and escape from the hustle and bustle. pressures of life and work. Starbucksis very thoughtful and serious in designing its stores to create a unique identity that isrecognizable to customers.

15-20 years ago, Starbucks was the place to know your taste, serve drinks quicklyand without distractions, get quiet thoughts in a space designed to be reminiscent ofwhere you live. Drinking coffee and music at the same time at Starbucks stores hasbecome a habit for many people.

<b>6.2Localization strategy</b>

There's a joke that goes, "If there's one company that should fail in China, it shouldbe Starbucks." The reason is, China has thousands of years of tea drinking history and along culture. No one would have thought that China abandoned tea for coffee.

However, Starbucks has successfully opened more than 570 stores in 48 cities sinceit first entered China in 1999. Building on this momentum, it plans to open its 1,500thstore in 2015. Here are the secrets of this famous brand's success:

6.2.1 Think differently

When Starbucks entered China in 1999, many were skeptical that Starbucks had achance. Given the fact that Chinese people have a tradition of drinking tea, it seems thatStarbucks cannot break into this market.

However, Starbucks did not let this skepticism stop its plans. At that time, China'smiddle class emerged as a "strange phenomenon: in large numbers. The goal was tocreate a place where people could meet their friends while drinking their favorite drinks.They have created a need for themselves. Now you can find a Starbucks almost on everymain street of the coastal Chinese city. Even 90-year-old men need to enjoy a cup ofcoffee after a meal, not tea - a drink that has been with them for perhaps more than half oftheir lives. Starbucks has revolutionized Chinese drinks.

</div>