This case study is in regards to Starbucks' international expansion strategy. It describes the advantages and risks which may be caused by expansion to Europe
Starbucks Coffee
Overvalued Stock Despite Strong Growth
Prospects
Business Analysis and
Security Valuation
Prepared by Erik Eselius, Jon D. Taylor, Olivier te Boekhorst, and Peter Winters
For Professor Charles Lee
Johnson Graduate School of Management, Cornell University
April 29, 1997
TABLE OF CONTENTS
TABLE OF C 2
EXECUTIVE SUMMARY........................................................................................................................ 3
OVERVIEW OF STARBUCKS............................................................................................................... 4
Business Ove 4
Recent Stock Performance.............................................................................................................. 4
COMPETITIVE ANALYSIS .................................................................................................................... 5
Rivalry Among Existing Firms.......................................................................................................... 5
Threat of New Entrants .................................................................................................................... 6
Threat of Substitute Products........................................................................................................... 6
Bargaining Power of Buyers............................................................................................................. 7
Bargaining Power of Suppliers......................................................................................................... 7
STARBUCKS STRATEGY..................................................................................................................... 8
Channels .......... 8
Product Diversification ..................................................................................................................... 9
Human Res 10
Retail Outlets.. 10
ACCOUNTING
Overvalued Stock Despite Strong Growth
Prospects
Business Analysis and
Security Valuation
Prepared by Erik Eselius, Jon D. Taylor, Olivier te Boekhorst, and Peter Winters
For Professor Charles Lee
Johnson Graduate School of Management, Cornell University
April 29, 1997
TABLE OF CONTENTS
TABLE OF C 2
EXECUTIVE SUMMARY........................................................................................................................ 3
OVERVIEW OF STARBUCKS............................................................................................................... 4
Business Ove 4
Recent Stock Performance.............................................................................................................. 4
COMPETITIVE ANALYSIS .................................................................................................................... 5
Rivalry Among Existing Firms.......................................................................................................... 5
Threat of New Entrants .................................................................................................................... 6
Threat of Substitute Products........................................................................................................... 6
Bargaining Power of Buyers............................................................................................................. 7
Bargaining Power of Suppliers......................................................................................................... 7
STARBUCKS STRATEGY..................................................................................................................... 8
Channels .......... 8
Product Diversification ..................................................................................................................... 9
Human Res 10
Retail Outlets.. 10
ACCOUNTING