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MGMT 4710 Strategic Audit Starbucks Corporation

Learn about Starbucks Corporation, its history, mission, and proposed new vision statement for global growth. Explore strategic matrices and past successful strategies for the coffee powerhouse.

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MGMT 4710 Strategic Audit Starbucks Corporation

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  1. MGMT 4710 Strategic AuditStarbucks Corporation Presented By: Justin Bolton, Samba Coulibaly, Jesse Henderson, Josh Hiltenbrand, Ambernique Johnson & Laura Toldy

  2. Identify firm and its existing and new vision and mission statements. What is Starbucks? Starbucks Corporation is headquartered in Seattle, WA. It is the largest coffeehouse company in the world and has stores in multiple (64) countries of the world. Starbucks’ stores serve both hot and cold beverages. Pre-packaged food items, and sandwiches are also sold at their stores.

  3. Mission Statement Starbucks’ mission is “to inspire and nurture the human spirit – one person, one cup and one neighborhood at a time”. Starbucks does not have a company vision statement.

  4. New vision statements for the firm. We would like to propose the vision statement for Starbucks: • “Starbucks will want to be the most preferred coffee joint and a place to both hangout and rejuvenate for people across the world and make effort to inspire and nurture the human spirit”. We also feel that while the mission statement should be specific but the current mission statement is too much focused on one customer, the desire to meet his/her demands and cater to a neighborhood.

  5. Firm’s history (how they started, etc., what are they known for?) Starbucks operates in the restaurants industry founded by Jerry Baldwin, Gordon Bowker, and Zev Siegl in 1971. When the company was founded, it was a roaster and retailer of whole bean and ground coffee, tea and spices with a single store in Seattle’s Pike Place Market. Based on the information from Starbucks’ website, Starbucks had Howard Schultz as the director of retail and operations and marketing in 1982 after which it began providing coffee to fine restaurants and espresso bars. After visiting Italy in 1983, Howard was impressed with the espresso bars in Milan and thinks of developing similar coffeehouse culture in Seattle.

  6. Describe indicators and symbols of organizational culture for the firm. Symbols play a huge role in the development of culture in an organization. Over time these symbols help in the creation of identity, response routines, and values that help the perpetuation of the activities in an organization. Starbucks provides an example of an organization that has grown leaps and bounds while keeping its culture intact. identify. The first sentence of the Starbucks website page, ‘Our Heritage,’ reads: • “Every day, we go to work hoping to do two things: share great coffee with our friends and help make the world a little better”.

  7. Competitive Profile Matrix (CPM)

  8. CPM Starbucks’ two biggest competitors: • Dunkin’ Donuts • McDonalds As the table shows, Starbucks has a stable leading position with a score of 3.32

  9. CPM The most important evaluative criteria are: • customer service • brand recognition • customer loyalty • product quality • social responsibility These five factors are crucial to the success of Starbucks` over its competitors

  10. EFE Matrix

  11. EFE Matrix

  12. Porter’s value chain Development Ingredient & Bean development Distribution of product Storefront Take-home products

  13. IFE Matrix

  14. IFE Matrix

  15. SWOT Analysis

  16. SPACE Matrix

  17. SPACE Matrix Starbucks should follow an aggressive strategy • Starbucks is a financially stable company • Starbucks is in a growing market

  18. SPACE Matrix An aggressive strategy has five main components: • forward Integration • market penetration • market development • product development • diversification

  19. BCG Matrix

  20. BCG Matrix The Americas EMEA (East, Middle Eastern, and African) CAP (China and Asia Profits) Channel division

  21. Grand Strategy Matrix

  22. Quantitative Strategic Planning Matrix

  23. Quantitative Strategic Planning Matrix

  24. Quantitative Strategic Planning Matrix

  25. Quantitative Strategic Planning Matrix

  26. Long-Term Objectives Starbucks has two long term objectives: • “Maintain Starbucks standing as one of the most recognized and respected brands in the world.” • “Be the leading retailer and brand of coffee in each of our target markets by selling the finest quality coffee and related products, and by providing each customer a unique Starbucks Experience.”

  27. Past Strategies Retail Growth Strategy • 10,194 company owned & operated stores worldwide • 9,573 company-licensed stores worldwide Product Expansion Beyond Coffee • Juices • Baked Goods • Breakfast Items • Teas • Sandwiches

  28. Past Strategies Foodservice partnerships • Grocery Stores • Warehouse Chains • Universities • Businesses • Airlines Global Responsibility Strategy • Aim to source coffee in the most ethical way possible • Support communities in which it operates • Work with suppliers to ensure proper work and living conditions

  29. Past Strategies The “Starbucks Experience” • Warm, inviting atmosphere • Excellent customer service • Free Wi-Fi Employee Hiring and Retention Strategy • Refers to employees as “partners” • Equity benefit options for both Full Time & Part Time Employees • Full health insurance benefits for both Full Time & Part Time Employees

  30. Starbucks’ Best Specific Strategy Retail Store & Distribution Growth • Open 2,500 new stores over the next 5 years • Focus on aggressive expansion of more profitable company-operated Starbucks locations • Take advantage of expansion opportunities in CAP & EMEA markets • Increase foodservice partnerships Product Expansion • Low or no calorie options • Tea Products • Alcohol Sales

  31. Projected Financial Statements:Consolidated Income Statements

  32. Projected Financial Statements:Consolidated Balance Sheets

  33. Projected Financial Statements:Consolidated Balance Sheets

  34. Projected Financial Ratios

  35. Specific Annual Objectives & Policies Compare individual store performance against company expectations • Develop an action for underperforming stores Compare regional performance against company expectations • Immediately halt construction of new stores in areas where entire regions are consistently underperforming Evaluate performance of individual product lines • Make changes to product formulation or adjust marketing budget, as necessary

  36. Recommended Procedures for Strategy Evaluation & Review Annual Objectives: • Increase revenues 10% per year in each individual market • Customer satisfaction surveys • Public opinion polling Suggested Policies • Employee Conduct & Ethics Policy • Require annual refresher training • Work with suppliers to require specific ethical behaviors as part of their contract • Customer Satisfaction Policy • Refund guarantee if customers are dissatisfied with quality of product

  37. Contingency Plan Expansion of customer base in existing markets • Isolate several of Starbucks’ most popular menu items and reduce prices to compete with Dunkin’ Donuts and McDonalds more directly • Keep quality of products high • Increase marketing budget to make consumers aware of the change in prices • Will result in reduction of gross profit percentage, but loss in gross profit will be offset by increase in total revenue dollars

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