Group Members

2. Group Members Victor Marbun (victor) M987Z259 Li Merlina (Merlin) M987Z246 Thidarat Prasitpornphakdee (Nok) M987Z245 Nguyen Thi Thanh Nhan (Nhan)M987Z232 Huynh ThanPhong (phong) M987Z242 江孟唐 Chiang Meng-Tang (Johnson) M98C0242

3. Outline 1.Introduction about Starbuck Corporation 2.Controllable and Uncontrollable Elements 3.Risks and The solutions 4.Overall Corporate Strategy of Starbuck 5.Strategy for improving productivity in Japan 6.Conclusion

4. Introduction about Starbuck Corporation Beginning to 1990 • The original Starbucks was opened in Pike Place Market in Seattle, Washington, in 1971 by three partners: English teacher Jerry Baldwin history teacher Zev Siegel, and writer Gordon Bowker. • In 1984, the original owners of Starbucks, led by Baldwin, took the opportunity to purchase Peet's .

5. Introduction about Starbuck Corporation • In 1987, they sold the Starbucks chain to Schultz's Il Giorna. • Starbucks opened its first locations outside Seattle at Waterfront Station in Vancouver British Columbia and Chicago, Illinois that same year

6. Introduction about Starbuck Corporation 1990 to 2008 • The first Starbucks location outside of North America opened in Tokyo in 1996. • Starbucks entered the U.K. market in 1998 with the acquisition of the then 60-outlet, UK-based Seattle Coffee Company, re-branding all its stores as Starbucks .

7. Introduction about Starbuck Corporation • In 1999, Starbucks experimented with eateries in the San Francisco Bay area through a restaurant chain called Circadia. • In April 2003, Starbucks completed the purchase of Seattle's Best Coffee and Torrefazione Italia from AFC Enterprises, bringing the total number of Starbucks-operated locations worldwide to more than 6,400

8. Introduction about Starbuck Corporation • On September 14, 2006, rival Diedrich Coffee announced that it would sell most of its company-owned retail stores to Starbucks. • In January 2008, Chairman Howard Schultz resumed his roles as President and Chief Executive Officer after an eight year hiatus and replaced Jim Donald, who took those posts in 2005.

9. Collaboration • In 1995, the company collaborated with Dreyer's Grand Ice Cream to introduce Starbucks Coffee Ice Cream and • the following year with Pepsi-Cola Company for its bottled Starbucks Frappuccino drinks.

10. Coffee Bean Sources

11. Starbucks Coffee

12. Starbucks Profit

13. Starbucks Chain

14. Starbucks Now • Starbucks is the largest coffeehouse company in the world, with 16,635 stores in 49 countries, • including 11,068 (6,764 Company Owned, 4,304 Franchised) in the United States, • nearly 1,000 in Canada and • more than 800 in Japan.

15. The Controllable and Uncontrollable elements that Starbucks has Encountered in Entering Global Markets.

17. RISKS • Rising Prices of the commodities: Starbucks is heavily reliant on raw materials and a spike in prices could dramatically narrow the company's profit margin. • Coffee: this higher-quality coffee often carries a substantial price premium, depending on market supply and buyer demand at the time of purchase • Dairy: Starbucks is a major consumer of dairy.

18. RISKS • Cannibalization The main risk Starbucks faces is its own dominance – with starbucks in every corner of a street there is likelihood of cannibalization of sales from existing locations • Competition : Because of rising prices starbucks may lose customers to their less expensive competitors. McDonalds and Dunkin Brands sell coffee which is cheaper than that sold by starbucks.

19. RISKS • Health Concerns: Consumers’ awareness of the rise of obesity has caused some “would-be” starbucks customers to turn to their health options. Most of the beverages contain dairy, sugar and a good amount of caffeine. • Consumer Spending: The slowing U.S Economy is really having a negative effect on the business because people will be cutting down on their spending on luxuries like coffee.

20. SOLUTIONS • Starbucks must push to be the first mover. • Innovate new products to stay ahead of such competitive tactics.

21. SOLUTIONS • Should become alert towards competitive market • With the health concerns from the customers Starbucks should look at healthier commodities like 2% and soy milk in many of its products

22. SOLUTIONS • Improved Advertising- Starbucks should step up its campaigns on promotions • Widens Target Market – the company should diversify its offerings and include the lower and the middle earners and also children.

23. Overall Corporate strategy of Starbucks • Provide a great work environment and treat each other with respect and dignity. • Embrace diversity as an essential component in the way we do business. • Apply the highest standards of excellence to the purchasing, roasting and fresh delivery of our coffee. • Develop enthusiastically satisfied customers all of the time. • Contribute positively to our communities and our environment. • Recognize that profitability is essential to our future success.

24. Starbucks in Japan • New shops attracted large crowds, but the effect wore off as the market became saturated. • Japan was a success when they first opened new stores; • they need to research their customers and market to find out the sudden change. • By being more aware of their customers and their likes and dislikes • They will be able to find out what adjustments are needed to become more successful.

25. Strategy for improving productivity in Japan • The stores in Japan are similar to other Starbucks Coffee locations. At these new stores, well-trained, friendly baristas customize and serve a variety of Starbucks Coffee drinks to every patron, just like the stores in North America. In addition, Japanese customers are able to purchase Starbucks Coffee beans • With the launch of Green tea Frapucinno, Starbucks had made a Big Hit in Japan market. • After rapidly building its brand in Japan over the last five years, Starbucks now needs to adjust its approach. • While the average annual revenue per store has declined in Japan, Mr. Schultz said, ''it is still significantly higher than in North America -- 60 percent higher.'’

26. Starbucks Experience • Comfortable setting to create positive and uplifting experience. • Inviting stores ambience. • Unique warmth that sets apart from “work” and “home” • Customized beverage order. • Emotional connection between Barista and customers • Most of Starbucks customers are not price sensitive. • Benefit from strong brand. • Be able to change more. • Less brand switching. • Prevented erosion in market share.

27. Order Starbucks Online • By finding the nearest Starbucks nearest shop using GPRS • Application use in iPhone • Pay using Starbucks card barcode and no need swipe • For now only can be use in USA

28. New Product Innovation • Starbucks Coffee Liqueur is the company's most recent attempt to extend the iconic brand from the strip mall to bars and kitchens everywhere. • The new Starbucks product is the result of a joint venture with Jim Beam Brands Co., makers of various spirits and wines • Sold in 750 ml bottles, the packaging immediately conjures the three main elements at play: liquor, coffee and Starbucks

29. Conclusion • Capitalism cause greed this prove by starbucks strategies all over US • Low wage employee could lead to disaster because it will lead to high turn over • Starbucks strategy by keeping prices in every country stay the same can lead to disastrous strategy • Starbucks have to customize their marketing in different countries in order to keeping their sales