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Starbucks

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by

Leanna Anandarajan

on 15 January 2016

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Transcript of Starbucks

Topic
By: Leanna A.
Starbucks
Starbucks is a renowned American international corporation
Founded in 1971 in Seattle by Gordon Bowker, Jerry Baldwin and Zev Siegl
Currently have 23 450 locations worldwide
CEO is Howard Shultz
Unit 1:Business Fundamentals
Products
Starbucks offers a wide variety of products
Coffee
Tea
Pastries
Frappuccino Beverages
Smoothies
Merchandise
2 C's : Customer Motives & Competition
Customer Motives
Consumers go to Starbucks based on a range of factors
Status
Quality
Free Wifi
Friends go so you go too
Large brand awareness "Bandwagon Effect"
Convenience
Promotion (i.e. 25% off pastries)
Competition
Main Competitors
Tim Hortons
McDonalds
Dunkin' Donuts
Tim Hortons provides a more family friendly environment
Tim Hortons has much lower prices
More meal options
Tim Hortons is heavily involved in the community which can gain customer loyalty
Canadian company which some consumers find a important trait
Dunkin' Donuts is a major competitor in the U.S
They have lower prices in comparison to Starbucks
Donuts are a major food product with a large market
McDonald's McCafe is a major competitor due to their size and popularity
McDonald's is known for their low prices and popular meals
McCafe is also growing and evolving as they strive to remodel their stores to compete with higher class food chains
TOBO
Supply & Demand
Starbucks currently has purchasing power
High Demand
Starbucks increases prices and consumers are still willingly to purchase their goods and services
This is one of the reasons for Starbucks higher prices in comparison to competitors, but this also skyrockets their profits
Needs/Wants
Starbucks is constantly revolving in order to meet consumer wants and needs which consantly evolve as new technology is introduced
Business Structure
In addition to a multitude of cafes Starbucks also has a strategic alliance with Chapters
The combination of books and coffee appeals to a large group of consumers
Subsidiaries
Large public corporation
Public: Starbucks sells the shares on the stock market
Starbucks Corporation
As of January 13 their stock on NASDAQ was $59.55
Pros of a International Business
Reach more consumers
Potential to grow business,expand and increase profits
Has helped Starbucks build large brand awareness worldwide
Has benefited their reputation
More media recognition
Cons
Require more management
Requires more resources
Larger risks , higher chances for problems occuring
Unit 2 Functions of Business
Marketing 4 P's
Product
Coffee
Tea
Pastries
Beverages (Frappuccino)
Smoothies
Merchandise
Marketing Mix:Variety
Starbucks variety of products contributes to their success
Place
Cafes
Online store
Starbucks App
Retailers
Starbucks is constantly developing new ways to bring their service to their customers. As technology revolves they innovate ways to incorporate it.
One of starbucks startegies is that when they open in a new area they open a cluster of stores to give the feeling that they are everywhere. This makes a consumer feel more inclined to go there.
Promotion
Price
Sales Promotion
Starbucks is known for their high prices, but also for their promotions which provide major discounts
i.e Happy Hour:half off any frappuccino
i.e New Years Day members of the rewards program got a free coffee
Higher price point in comparison to competitors
High end specialty image
Psychological connection
High Price=High Value
Forms of Media/Sales Promotion
Social Media
Social media is key to Starbucks marketing startegy.
Currently Starbucks has over 7 million followers on Instagram
They have kept up with up to date trends and have become trendsetters
Magazines
Starbucks is featured in magazines such as Cosmopolitan who have a large amount of readers. Cosmopolitan also has a feature in Snapchat so Starbucks reaches consumers that way as well.
Starbucks App
The Starbucks app lets consumers pre order with their credit card, pay with their app, and earn rewards
The app has revolutionzied how consumers enjoy Starbucks
This has increased convenience as well as impulse purchasing
Productivity
Product Life Cycle
Production Process
Accounting
Doesn't need to spend alot of money on marketing
spend less than 1% of budget
Social Media marketing requires less money
Lean Production: maximize customer value but eliminating waste or anything that doesnt add value
Happy Employee = More productive
Unit 3: Banking
Gross Profit is $11,375,200
Cost of Revenue is $7,787,500
Total Revenue is $19,162,700
Sales,General & Admin Expenses: $7,130,200
Banking
Unit 4: Entrepreneurship & Business Ethics
Ethics & Social Responsibility
Investments
Investing in Starbucks has pros and cons
They are a well established company and are doing extremely well
But they are at their mature stage so they are finshed with the majority of their growth
They have grown 271.9% in less than 5 years
This is good for those who invested in their early stages
Those who invest now are less likely to have such large profit
Community
Starbucks Foundation
Provides Youth Grants
Ethos Water Fund
Provide children in underdeveloped areas with clean water
Involved in rebuilding the Guelph Coast
Environment
Starbucks values the environmnet and do everythign they can to be a environmentally sustainable.
They minimize wastes and unneccesary resources. They are also avid recyclers.
Ethical Sourcing
Responsibly Grown
Fair Trade
Ethically Sourced Cocoa
Support and provide jobs for those who grow tea
Especially Women in underdeveloped areas
Diversity
Employees are called partners
Starbucks values their partners and strive towards a diverse workforce
Customers
Appreciate different cultures and bring their service to varioous communities
Suppliers
Support women owned suppliers
Employee Treatment &Benefits
Starbucks employees each recieve a package called your special blend
Employees who work more than 20 hours a week have:
Bonuses
Retirement Savings Matching
Discounted stock offers
Health coverage for you and dependents
Adoption Assistance
30% off store purchases
One pound of tea or coffee a week for free
Innovation
Technology
Starbucks has created some of the most intricate technology and has revolutionized how consumers access fast food services
Starbucks app allows customers to attach credit cards or gift cards to the app and pay without a wallet, as well as pre-order, online purchases and browse menu & earn rewards
Starbucks is at the forefront of innovation in their industry.
My Starbucks Ideas
Allows public to submit ideas to what they want to see from Starbucks
Starbucks has to constantly evolve and come up with ideas to keep up with public.
This benefits consumers and Starbucks.
Howard Shultz started as a simple entrepreneur to now the CEO of the world's most recognized coffee brand
In the 1990's is when Starbucks began to gain recognition.
In order to be where he is today he:
-Took risks
-Saw potential and acted on it
-Valued his employees and this made a big difference
-Happy friendly workers contributed to success
Characteristics of A Entrepreneur
Connections
Unit 1
Unit 2
Needs/Wants/ Supply & Demand : Marketing
Marketing directy relates to needs,wants and demand of consumers.
You need to market towards what they want and need as well as take into account their reasons/motives for buying
Unit 2
Unit 3
Productivty relates to your expenses and affects your overall profits.
When you innovate new ways to increase productivity your able to increase profit & reduce expenses
Unit 4
Unit 2
Unit 4
Marketing relates to ethics
Consumers are more likely to buy a product if they know that it is free trade, & eco-friendly
Marketing relates to innovation
You mujst innovate new ways to draw in new consumers
Full transcript