“We aren’t in the coffee business, serving

people.
We are in the people business, serving
coffee”
 Company Overview
 1971 - Starbucks Coffee opens is first
store in the Pike Place Market in Seattle,
Washington
 1984 - Howard Schultz convinces the
original founders of Starbucks to test the
coffee bar concept
 1988 - Starbucks comes out with their
first mail-order catalog, enabling mail-
ordering of their coffee in all 50 states
 Company Overview
 1991 - Starbucks becomes the first
U.S. privately owned company in
history to offer a stock option
program (Bean Stock) to all its
employees
 1992 - They go public, with common
stock being traded on NASDAQ
 1993 - Expands into the East Cost
market
Product
Extension:

Discoveries (cold
coffee)
 Place

Demographic &
Psychographic
segmentation
 SWOT Analysis
 Strengths
› Never experienced a strike or work stoppage
› Good relationships with coffee suppliers
› Value employees
› Located in high traffic areas
› Employee turnover rate is 60%, compared to
140% in the fast food business
› They don’t move into new markets until they
dominate the ones they expand into
 SWOT Analysis

 Weaknesses
› Excessive focus
› Employees report to two division heads
› Increasing shareholders dilutes their
interest
› They have expanded too quickly, and
have already saturated the US market
› They do not allow smoking in their
stores, alienating some of their
customers
 SWOT Analysis
 Opportunities
› Expansion into European and Latin American markets
› Distribution agreements, such as hotels, airlines, and
office coffee suppliers
› Reducing alcohol consumption in the US leads to bars
being used less which leads to people needing another
place to go
› Use supermarkets as a way of expanding into
international markets
› Numerous brand extension
› Improve on perception of instant and decaffeinated
coffee to expand that market share
 SWOT Analysis
 Threats
› The coffee market is saturated
› Cost of coffee beans is expected to rise in the
near future
› Supermarkets threaten whole bean sales
› Farmers might switch from coffee to vegetable
crops
› High competition from Japanese competitors
› Consumers trend toward more healthful fare
 COMPETITO
RS
 Starbucks faces competition from a number
of international, national, regional, and even
local coffee bars and houses.
 The more well known international ones
would be :
Coffee Bean
San Francisco Coffee
Gloria Jeans
 The local Competitors would be :
Secret Recipe
Oldtown White Coffee
 COMPETITO
RS
 Starbucks competitors are primarily in the
Restaurants & Cafes industry.
 Starbucks also competes in the Nonalcoholic
Beverages, Candy & Confections, and Consumer
Electronics & Appliances Retail sectors.
 Is comfortable facing Coffee Bean and Tea Leaf
as its major competitor but, with the upcoming
and modernized kopitiams, it is now quite an
issue for Starbucks.
 COMPETITO
RS
 Fortune ranked Starbucks number one in
innovation, quality of management, people
management and quality of products or
services in the food industry 2007.
 According to The Star online, in Malaysia,
Starbucks currently holds 45% to 50% of
local gourmet coffee market.
 Starbucks is still the world and Malaysia
leader in its industry.
 Starbucks is constantly innovating and
showing strong product differentiation in
their industry.
 Is aware of the threats to potential entrants
since the profit is attractiveness.
• Starbucks outlets
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