Starbucks Corporation

Competitive Profile Matrix

Ferdinand C. Importado

Competitive Profile Matrix

Identifies a firms major competitors and
its particular strengths and weaknesses
in relation to its competitors.
Displays the basis of an organizations
strategy and is a useful instrument to
communicate those strategic attributes
to all in the organization.

Difference from IFE and EFE

The IFE matrix consists of the internal
factors and the EFE matrix consists of the
external factors
The CPM matrix consists of a mix of both
internal and external factors

Weakness of CPM
CSF ratings are subjectively assigned a
rating between 1 and 4, and nonuniformity may occur due to weights
being assigned subjectively by the
evaluators.
The total weighted scores obtained for
each company reveal relative strengths
or weaknesses of the companies but are
not to be implied as precise in nature.

Overview of the Quick Service

Industry
Companies in this industry operate
restaurants that provide food served to
customers who order and pay at a counter.

Overview of the Quick Service

Industry
Demand is driven by:
Demographics
Consumer tastes

Personal income

Overview of the Quick Service

Industry

15%

40%
45%

Starbucks Competition
McDonald's recently
launched its McCafe
campaign in which it sells
premium specialty coffee
beverages at a slight
discount to Starbucks.
McDonalds has an
excellent platform from
which to compete as it
already has so many
stores in prominent
locations with drive-thru
windows.

Starbucks Competition
Dunkin' Donuts, uses
its donuts and the rest
of its menu as the
draw.
The customer can choose between a
coffee or a coffee and a donut.

Critical Success Factors

Advertising (4 3 3)
Starbucks

McDonalds

Brand
marketing
Social
media and
internet
$182.40M,
29% ,
1.37% of
total
revenues

Traditional
media
$787.50M,
2% , 2.8%
of total
revenues

Dunkin
Advertising
fund of 5%
of gross
retail sales
Mobile
application
with over
1M
downloads

Product quality (4 2 3)
Starbucks

McDonalds

Dunkin

Provides the
highest
quality of
coffee
brewing
through its
onsite
brewing and
smelling

Utilizes
automated
brewing
with less
smelling
Customer
responses
decent to
absolutely
disgusting

CMLs
deliver
products
with the
same high
consistency
and quality

Product variety (3 4 3)
Starbucks

McDonalds

Dunkin

Hot and
cold coffee,
beverages,
and some
bread

Hamburger,
sandwich,
chicken,
spaghetti,
French
fries, and
breakfast
meals

Donuts and
sandwich,
burrito and
breakfast
meals

Product competitiveness
(2 4 2)

Financial position (3 4 3)
Starbucks
Net revenues
increased by 14%.
Consolidated
operating income
was $2.0 billion in
fiscal 2012.
Operating margin
increased to 15.0%.
EPS for fiscal 2012
was $1.79.
Cash dividends
declared increased
from $0.56 in 2011
to $0.72 in 2012.

McDonalds

Dunkin

Combined operating
margin was 19.82%
in 2012, down from
20.38% .
Revenues increased
2.08% from $27,006
in 2011 to $27,567
in 2012.
Diluted earnings per
share was $5.36.
Cash dividends
declared were $2.53
and $2.87 in 2011
and 2012
respectively.

Total revenues for

2012 amounted to
$658.181.
The operating
margin decreased
from 32.68% in 2011
to 36.38% in 2012.
Diluted earnings per
share for 2012 is
$0.93
The company did
not pay cash
dividends for 2011
and paid $0.60 per
share in 2012.

Customer loyalty (2 3 4)
Starbucks

McDonalds

Dunkin

33M Facebook
fans
Former
Starbucks
consumers
begun visiting
Dunkin Donuts
and McDonalds
or purchased inhome coffee
brewers and
espresso
machines.

While low
consumer
confidence
continues to
negatively affect
overall retail
sales and the
IEO segment,
McDonalds
outperformed
the market and
grew its market
share.

No. 1 rank in
customer loyalty
by Brand Keys in
coffee category.
Overall Dunkin
ranked 17 (12)
worldwide,
McDonalds at 32
(26) and
Starbucks at 45
(100)

Global expansion (3 4 4)
Starbucks

McDonalds

Starbucks has
about 18,000
stores world-wide
of which roughly
13,000 are in the
North America.
Starbucks is in 62
countries

McDonalds
operates over
1,900 restaurants
across 19
countries in Latin
America and the
Caribbean.
In Japan, there
nearly 3,300
restaurants.
Over 1,600
McCaf locations

Dunkin
Dunkin' Donuts
had 3,173
restaurants in 31
countries.
Baskin-Robbins
had 4,517
restaurants in 45
countries.

Customer service (4 3 3)
Starbucks

McDonalds

Dunkin

Third place
concept
Introduced the
Latte
Method

Enhanced
appearance
and
functionality
of McDonalds
restaurants
Extended
operating
hours and over
5,400
restaurants are
open 24 hours.

Re-designed
coffeehouses.
Creating a
more desirable
place for fastcasual eating.

Competitive Profile Matrix

Strategies
Product quality and variety
Acquire business that are engaged in the
production and selling of highly
specialized bread, pastries, cookies,
cakes and the like that will supply its
own requirement. Starbucks mode of
acquisition can be full integration, or just
by entering into a long-term contract.

Strategies
Price competitiveness
Instead of buying premium coffee beans
from outside suppliers at a high cost, the
company can just buy supplies from its
competitors at a lower price.
Acquire or purchase a portion of its
competitors stocks, so that they will have
access lower costs of coffee beans and
acquire the necessary competence to
become a cost leader.

Strategies
Customer loyalty
Partnership with the producers of
espresso machines to include Starbucks
products into the packaging.
Diversify into the business of producing
its own coffee espresso machines.

Strategies
Global expansion
Increase market share by selectively
opening stores in new and existing
markets (including China and India) as
well as increasing revenues in the
existing stores.

Grand Strategy Matrix

SFAS Matrix

General Strategies
Into a joint venture with the producers
of espresso machines to include
Starbucks products into the packaging.

Increase market share by selectively

opening stores in new and existing
markets (including China and India) as
well as increasing revenues in the
existing stores.

General Strategies
Acquisition or control of brokerage /
logistic firms to support Starbucks
supply chain management.
Acquisition or control or coffee bean and
dairy product producers. ;]]