Starbucks Managing A High Growth Brand: Case Presentation By-Diya and Shreesa

STARBUCKS
MANAGING A HIGH GROWTH BRAND
Case presentation by-

Diya and Shreesa
Company background
• Started by Seattle entrepreneurs Jerry Baldwin, Gordon
Bowker and Zev Siegl in 1971.
• Sold whole-bean coffee and coffee brewing equipment
• Not brewed in-store
• Purchased only Arabica beans from a carefully selected

suppliers
Company background contd..
 1982
 Howard Schultz joined the company.
 Transformed coffee retailer into café business
Growth & success factors
Mission
To inspire and nurture the human spirit –
one person, one cup and one neighborhood
at a time.
• Quality policy
• Third place
• Investing ahead of growth curve
• Innovation
• Adoption of new philosophies.
Growth & success factors
STARBUCKS spent more money on training

than on marketing.
Growing the brand
• Launched its international first store in Japan in 1996
and opened 25 new stores by 1998
Growing the brand contd..
• Word-of-mouth publicity
campaigns
• Highly skilled baristas
strengthened the brand
image
• “Hub” marketing strategy
Joint ventures and partnerships
• Host Marriott Partnership
Joint ventures and partnerships contd..
• United airlines partnership

• Other retail and service partnerships

• Partnership with Pepsi

• Joint venture Dryer ice-cream

Other partnership
Urban coffee opportunities

 Deal with Johnson
development Corp. to
bring Starbucks to inner
city of America
Other partnership contd..
Partnership with environmental agencies

 Alliance for environmental innovation
Initial Results
• In 1990s-Annual growth rate of sales and profit
exceeding 50%.
• 1995- Sold a special custom made CD mix, online and
in-store.
• 1998- Partnered with Oprah Winfrey and sold books
her book club recommended.
• 1999-Venture into Tea business- Tazo Tea, priced at
80% premium on average tea price.
Maintaining the Growth-
Acquisitions in 1998
Becoming a Global Brand
• Expanded international network beyond 300 stores.
• Acquired London based Seattle coffee company, with 56
coffee stores.
• Opened 40 new coffee stores in Britain, 2 in South
Africa and 1 in Kuwait.
• Acquired Pasqua Coffee Copmany, a California based
coffee retailer.
• It operated in more than 50 locations in San Francisco
and Los Angeles, incl. 8 California airports.
• Gave desirable exposure to business travelers.
Growth weakens-1999
• In 1998, added 500 employees per month.
• In 1999, posted revenues of $ 1.7 billion.
Challenge:-
• Manage growth and diversification
• Strengthening Starbuck's core values
• Keeping customers trustful and loyal to the brand
Meet the competitors!
• Caribou
• Dunkin Donuts
• McDonald's
• Burger King
• Carl's Jr
• Dairy Queen
Competition
• Dunkin Donuts-famous food and beverage, international
company headquartered in New York.
• Had cappuccinos and lattes and eliminated the need of
baristas with machines.
• Located its stores in price sensitive communities, where
Starbucks had just targeting.
• Combination of Speed, Consistency and up to 25% lower
prices
Strategy against competitors
Aggressive Expansion
• By 2006- Presence in 37 countries including Brazil,
Peru, turkey, Japan, Mexico, Jordan, India
• Stock being traded in Hong Kong Stock Exchange.
Fighting back
"the most recognized and respected brands in the world"-
Schultz
• Challenge in managing expanding global markets.
• Strenthghten its core product-coffee.
• Unveiled new Frappucino flavors and low calorie
drinks.
-Frappucino ranked 1st, 83% market share
• Introduced Double Shot, a chilled ready-to-drink
espresso drink.
- Ranked 2nd
Growth beyond coffee
1. Credit Cards
 Made it easier for customers to
purchase
2. Starbucks entertainment
 Investment in film industry
 Co-produced albums
3. Coffee-flavored Liqueur
 Sold at liquor stores and not
Startbucks stores
1999- $750,000 in sales per store

2004- $9,40,000 in sales per store
Growth concerns
• Could Rapid expansion in retail, product inventory
and strategic partnerships harm brand equity?
"We're not in the coffee business, serving people; we're

in the people business, serving coffee"
-CEO James Donald, 2005
Discussions
How would you evaluate Starbucks’ growth strategy?
Is word-of-mouth strong marketing tool than traditional marketing?
Has Starbucks’ gone too far in creating a “lifestyle” brand? Where should company
go next?
Thank You!

Starbucks Managing A High Growth Brand: Case Presentation By-Diya and Shreesa

Uploaded by

Copyright:

Available Formats

Starbucks Managing A High Growth Brand: Case Presentation By-Diya and Shreesa

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Starbucks Managing A High Growth Brand: Case Presentation By-Diya and Shreesa

Uploaded by

Copyright:

Available Formats

STARBUCKS

MANAGING A HIGH GROWTH BRAND

Case presentation by-

• Purchased only Arabica beans from a carefully selected

STARBUCKS spent more money on training

• United airlines partnership

• Other retail and service partnerships

• Partnership with Pepsi

• Joint venture Dryer ice-cream

Urban coffee opportunities

Partnership with environmental agencies

1999- $750,000 in sales per store

"We're not in the coffee business, serving people; we're

How would you evaluate Starbucks’ growth strategy?

Is word-of-mouth strong marketing tool than traditional marketing?

You might also like