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: Social Responsibility & Brand Strength

Strengths

Weaknesses

  • Narrow (small) product mix
  • Low employee satisfaction
  • Struggling to enter foreign markets

Presented by:

  • Innovation
  • Fast store openings
  • Financial success for shareholders

Andrea

Kenya

Ricky

History

External Challenges

Going Green

  • 2008 Housing Crisis- Global recession causing the market to “bottom out” for expensive coffee drinks.
  • Limited Growth Opportunities- US markets are mostly saturated. Starbucks must expand international business to meet and maintain growth targets.
  • Customers and Image- Different customer perception in Starbucks’ international market and its US (home) market.

Coffee Giant

  • Starbucks facing heat for the amount of cups that end up in landfills

Go Green Goals

  • Have recycling in almost every store
  • Reduce energy consumption by 25% by 2015
  • Increasing reusable cup sales by 5%

Opportunity

Threats

  • Howard Schultz joined Starbucks 1982
  • Inspiration came from Milan (1500 coffee bars)
  • Developed retail coffee-bar "culture" in Seattle
  • Served First Starbucks Late in 1985
  • Since then, Starbucks has expanded operating over 20,000 stores in 65 countries
  • Grew steadily at a rate of 3 stores a day (until recently)
  • Net Revenues= 13 Billion per year
  • Third largest chain restaurant in the US
  • Community involvement
  • Investments in new markets
  • Improving image

  • Change in customer perception
  • Change in external environment
  • Increasing competition

  • #1 Coffee Shop Chain in the World

Forbes Lists

  • #100 America's Best Employers
  • #61 World's Most Valuable Brands
  • #33 Most Innovative Companies

Fortune List

  • #196 Fortune 500
  • 5th Most Admired Brand

Going Green Solutions

Environmental Successes

Challenges Highlighted in Case

Going Green cont.

  • Starbucks is still offering reusable cups to cut down on the cups that end up in landfills.
  • They are building Greener stores and facilities to shrink their eco footprint.
  • Using Cups that are better for recycling and the environment.

Greener than Most

  • Created the Environmental Starbucks Coffee Company Affairs Team
  • Minimize company footprint
  • Shared Planet Website
  • Green Team Initiative

Starbucks has not reached some of their Go Green goals

  • only have recycling options in 39% of their stores
  • Reduced energy consumption by only 7.1% by 2013 and did not make 2015 goal
  • increase reusable sales by only 1.8%

  • Social Responsibility & Brand Strength
  • Fair trade coffee
  • use of genetically modified milk
  • Schultz’s alleged financial involvement with the Israeli Government
  • Criticism towards the removal of small coffee shops who could not compete against Starbucks (rapid growth and power).

Even though Starbucks is taking heat for the amount of cups that end up in land fills and didn't hit some of their Eco friendly Goals they are still in the top 10% of it's US, Global and industry peers

Internal Challenges

Employee Successes

  • Product Range- Starbucks cannot simply rely on beverage products and must continue to add to mix to stay a leader in their industry.
  • Employees- Overcoming dissatisfaction among partners and employees

Foreign Expansion

  • Father's life almost ruined
  • Values employees
  • Thrive-Wellness

Customer Successes

Foreign Expansions

Solutions

  • Refocus the brand
  • Enhancing customer "experience"
  • Addressing obesity epidemic
  • Starbucks is located in over 65 countries but is struggling in most.
  • When trying to enter the foreign market in the U.K. they faced some resistance. The locals didn't like the store because it didn't have a local feel.
  • Starbucks also got resistance for not pay Taxes for 13 years because they did not turn a profit.

Community Successes

  • To help business in the U.K. Starbucks renovated the stores to give them a more local feel
  • Paying 20 million Pounds for taxes over the next 2 years.
  • Franchising in Foreign countries

Questions?

  • Instant gathering spot
  • Store managers are encouraged to donate to local causes
  • Addressing unemployment
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