Case Study on Star Bucks
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Starbucks Case Study
John Baab, Charly Costigan, Tyler Kleckner, Ashley Kreuer, Ellen Park, Ashley Wooding
Outline
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Background and History
Gerald Baldwin, Gordon Bowker, and Ziev Siegl – opened a small coffee shop in Seattle’s Pike Place Market in 1971 Howard Schultz – Joined the Starbucks marketing team Traveled to Italy and became interested in the espresso bars and tried to bring it to America
Founders sold the company to Shultz
Began to open new stores and had 140 stores by 1992 Decided to take the company public and succeeded by opening more stores Shultz continued to take the position as chairman and chief global strategist and hired CEO Orin Smith in 2002
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Mission/Vision of Starbucks
To satisfy customers and to create a “third
place” environment Three components to branding strategy : the coffee itself, service, and atmosphere
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Overview as of 2002
5,886 stores(4574 National, 1312 International) Customers(20 million total, 570 per week per
store) Net Income of 215 million $ Customer Demographic (Traditional vs. New) Menu (Average price of drink – $3.85, 30 drinks, and 23 whole bean coffee blends) Partners – 360 total labor hours and an average pay rate of $9.00 per hour Partnerships (Pepsi Bottling Co., Kraft Foods, and Dreyers Ice cream)
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2002E - $21.5 Billion (total sales)
Specialty Coffee, 31% Specialty Coffee Traditional Coffee Traditional Coffee, 69%
Starbucks Share of Specialty Coffee Market 42% (estimate) – 13% Total Market Share
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2005E - $22 Billion
Specialty Coffee, 41% Traditional Coffee, 59%
Specialty Coffee Traditional Coffee
Starbucks Share of Specialty Coffee Market 50% (estimate) –
20.5% Total Market Share
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Strengths
Well developed and established brand
strategy: “live coffee” Locations Product Mix “Partners” Customization
1
Starbucks Case Study
John Baab, Charly Costigan, Tyler Kleckner, Ashley Kreuer, Ellen Park, Ashley Wooding
Outline
8/19/2013
2
Background and History
Gerald Baldwin, Gordon Bowker, and Ziev Siegl – opened a small coffee shop in Seattle’s Pike Place Market in 1971 Howard Schultz – Joined the Starbucks marketing team Traveled to Italy and became interested in the espresso bars and tried to bring it to America
Founders sold the company to Shultz
Began to open new stores and had 140 stores by 1992 Decided to take the company public and succeeded by opening more stores Shultz continued to take the position as chairman and chief global strategist and hired CEO Orin Smith in 2002
8/19/2013
3
Mission/Vision of Starbucks
To satisfy customers and to create a “third
place” environment Three components to branding strategy : the coffee itself, service, and atmosphere
8/19/2013
4
Overview as of 2002
5,886 stores(4574 National, 1312 International) Customers(20 million total, 570 per week per
store) Net Income of 215 million $ Customer Demographic (Traditional vs. New) Menu (Average price of drink – $3.85, 30 drinks, and 23 whole bean coffee blends) Partners – 360 total labor hours and an average pay rate of $9.00 per hour Partnerships (Pepsi Bottling Co., Kraft Foods, and Dreyers Ice cream)
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2002E - $21.5 Billion (total sales)
Specialty Coffee, 31% Specialty Coffee Traditional Coffee Traditional Coffee, 69%
Starbucks Share of Specialty Coffee Market 42% (estimate) – 13% Total Market Share
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2005E - $22 Billion
Specialty Coffee, 41% Traditional Coffee, 59%
Specialty Coffee Traditional Coffee
Starbucks Share of Specialty Coffee Market 50% (estimate) –
20.5% Total Market Share
8/19/2013 7
Strengths
Well developed and established brand
strategy: “live coffee” Locations Product Mix “Partners” Customization