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STARBUCKS CORPORATION
Thomas Liquori
Digitally signed by Thomas Liquori DN: cn=Thomas Liquori, email=thomasliquori@aol.com, o=thomasliquori.me, l=New York, NY Date: 2010.09.05 19:23:42 -04'00'
By: Thomas Liquori MGT420: Professor O’Neill December 2, 2008
Table of Contents INTRODUCTION/BODY…………………………………………………………………………1-3
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CONCLUSION………………………………………………………………………………………….4 COMPANY PROFILE..................................................................................5
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ORGANIZATIONAL STRUCTURE GRAPH……………….………………………............6
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MARKET CAPITALIZATION GRAPH.………………………………………………………….7 COMPANY OWNED STORES…………………..………………………………………………..8 BALANCE SHEET (2007) GRAPH.................................................................9 LAST 3 YEAR INCOME STATEMENT GRAPH...………………………………………….10
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PRODUCT GRAPH………………………………………………………………………………….11 COMPETITOR GRAPH..............................................................................12 SWOT ANALYSIS GRAPH………………………………………………………………………..13 BIBLIOGRAPHY…………………………………………………………………………………14-15 FOOTNOTES………………………………………………………………………………………….16
Starbucks Corporation 12
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There was a moment, once upon a time, when you heard the name “Starbucks�, only one thing came to mind; a delicious cup of coffee. During the course over the past few years however, Starbucks has tried to cash in on everything they could get their hands on and forgot about their original origin, and most importantly, what Starbucks used to stand for. Starbucks has used it’s trademarked brand name for almost anything and everything, from movie advertisements, to beverage fullfillments, as they equipped most of their stores
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with an increasing variety of choices for either brunch or luncheon affairs, to
books and music. Starbucks got back in the game when, CEO Howard Schultz,
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started to reassure Starbucks customers, that the once popular coffee will return
and be stronger then ever. That one change would be a dramastic change especially for their marketing structure, but will make the difference.
The Seattle based coffee company has been confronted with numerous
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flaws and staggering stock prices at the beginning of the year, and in March announced a series of big things to come, including numerous transitions. Some of the big things to come with the transitions included, a new simmering delicious coffee blend, improvements in their expresso making equipment, a program club full of awards to thank customers, and even an interactive website is in the works as well. Experts are skeptically envisioning, there is no doubt that the coffee guru needs to step things up and get back to their coffee origins. They also note that new innovations on a massive customer base can be also back fire
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against the coffee titan. In all fairness to the company, I believe in my opinion, that the aspect of doing so many things at once can be harmful if not executed correctly, and if it is not done in the proper procedure, it could hurt the company even more rather then trying to make it better. There is no question that over the past few years Starbucks has become rather generic and there name has become nothing special anymore. Starbucks really needs to step up their strategy in order to bring back to life their brand name and quality to doubting consumers. The query for Starbucks is, How do they do that, and get back to their original origin? Well they are already on the right track by focusing on their
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main product which would be coffee, but if the company doesn’t reinforce the change procedures to the whole organization, the new marketing strategies might plummet leaving confused customers in a daze of mocha. The unitization between customers and Starbucks, is Starbucks most important aspect of their business. The customer needs to feel happy and appreciated to purchase their products. They must feel that sense of fullfillment when ordering and drinking a Starbucks
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beverage, that in a nutshell is the most important piece of the puzzle that the company needs to bring back to life. That could be easier said then done, in
January 2008, Howard Schultz reassumed CEO duties to a company that he
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largely shaped, and who is also Chairman of the Board, quickly announced a reorganization at the Executive level, as well as job cuts in the company. He conveyed that the number of changes in the company could be a concern, but
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would iron itself out over a period of time.
The new brew of coffee that came out in April of this past year 2008 is
called, a Pike Placed Roast that the company will have fusioned at every U.S based operating facility across the country. At the same time, another change in the marketing strategy that was mentioned earlier in this paper, was a program club for registered customers to refill their cards and also receive free shots of flavored syrups. In the equipment aspect of the big transition, Starbucks introduces the new expresso makers that are designed to deliver a better, faster, and more consistant latte, then previous models used. These models will be moved into
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thirty percent of the U.S based stores by the end of this year, and seventy-five percent of their stores by the year 2010. Another new piece of equipment that is
in the works for Starbucks is the machine called the “Clover�. This machine is set out to make individual cups of premium drip coffee, but they are taking their time rolling out this new machine, and Starbucks predicts, that this machine will not necessarily make it to every U.S based store. The new interactive website that is in the works for Starbucks will consist of executive blogs and calls for consumer feedback to the company.
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The conversions that Starbucks is going through are some really rough times at the moment. From their stock price falling tremendously and consumer dealings with their business failing, Starbucks, over the past year, has somewhat slowed down their pace of new store openings. They had even closed numerous stores, all this in an attempt to go with the new change that the company is trying to implement. Although, Starbucks has made some aspect of change by pulling off the shelves their morning eats, which made people complain that it
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gave Starbucks stores a highly displeased aroma, Starbucks has not talked about
more simplifying methods that the company is going to be engaged in. In my
opinion, the company should cut back more on the food offerings, as well as the
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little nick nacks that clutter up the store, such as books, music, coffee mugs, etc., and stay focused on what Starbucks is really supposed to be about, a nice satisying fresh cup of brewed coffee.
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Due to it’s costly prices, the current economic spill in today’s market,
really have customers holding on to their money, and it is taking it’s toll on Starbucks customers like never before. While the economy is causing various problems for everyone around the country, Starbucks should not use that as an excuse for their mishaps which started way back before the economy started to have a meltdown. In all reality, Starbucks needs to acknowledge it’s own role in their weakening of their business. What’s even more surprising that just released last week, CEO Howard Schultz stated, “The company expects to face an
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extremely challenging fiscal 2009”. 1 Schultz continued, “We appear to be more resilient than many other premium brands. As we head into the holiday season and Calendar ‘09, consumers are looking for value and we’ve been pleased with the steady progress of our Starbucks Rewards program and the enthusiastic reception to the Starbucks Gold Card. I am optimistic we are well positioned to weather this challenging economic environment.” 2
1 2
See page 16 See page 16
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In conclusion, I believe that Starbucks has a lot of continuing challenges ahead of them. They really need to see past what they have become and try to get back some of the old goals that the company once longed for. Maybe these old tactics will help the company become better in a more positive way, rather
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than a negative way, like the way they have become recently.
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Starbucks Corporation 12
in 1971 by Gordon Bowker, Jerry Baldwin, and Ziv Siegl
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Founded
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Main Industry: Coffee and tea manufacture
Number of Employees: 172,000
Organizational Structure: See page 3 for graph
Headquarters: 2401 Utah Avenue South, Seattle, WA, USA
Market Capitalization, Stock Price, Shares Outstanding: See page 4 for graph
Other Locations: As of 2007 there were 8,505 company owned and 6,506 licensed,
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for a total of 15,011 stores worldwide: See page 5 for graph
Recent Measures of total assets, total liabilities, and shareholder’s equity: See page 6 for graph
Mission: To inspire and nurture the human spirit- one person, one cup, one neighborhood at a time
CEO Howard Schultz’s vision for Starbucks is to become a national company with values and guiding principles that employees could be proud of. He indicated that he wanted to include these people in the decision making –process and that we would be open and honest with them
Last 3 years revenue, gross profit, and net income: See page 7 for graph
Products: coffee, tea, mugs, music, books, stuffed animals, coffee makers, cookies,
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pastries, etc.: See page 8 for graph
Main Competitors: Dunkin Donuts (Coffee and tea), McDonalds (Coffee and tea): See
page9 for graph
Significant Customers: Caters to all types of consumers worldwide
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Starbucks Corporation 12
Howard Schultz CEO, President, Board Chairman
Deidra Wager Exectutive VP
Troy Alstead Chief Financial Officer
Wanda Herndon SVP, Public Relations
Eduardo Garcia Executive VP
Brian Crynes EVP, CIO
Darren Huston Senior VP
Shelly Lanza EVP, Human Resources Henry Suerth Senior VP
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Jim Alling Senior VP
Terry Davenport SVP, Marketing
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Stock (As of 12/02/08) (U.S.Dollars), 8.1
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100%
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Starbucks Market Capitalization
50%
0%
Shares Outstanding (BILLIONS)
Starbucks Market Capitalization
Market Capitalization (BILLIONS)
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Stock (As of 12/02/08) (U.S.Dollars)
Shares Outstanding (BILLIONS), 738.3 Market Capitalization (BILLIONS), 5980.23
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USA 6,793
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Canada 596
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UK 580 China 141
Germany 104
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Thailand 103 Other 188
Starbucks Licensed Stores
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USA 3,891
International 2,615
Total Company & Licensed Stores 15,011
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Starbucks Corporation 12
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21%
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Starbucks Balance Sheet (2007)
50%
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29%
Total Assets in Billions (5343.9) Total Liabilities in Billions (3059.8) Total Share Holder's Equity in Billions (2284.1)
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Starbucks Corporation 12
10000
9411.5
9000 7786.9
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8000
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Last 3 Year Income Statment
7000
6369.3
5412.4
6000
4608.1
5000
3764.1
4000 3000
672.6
2000
581.5
Revenue (BILLIONS) Gross Profit (BILLIONS) Net Income (BILLIONS)
494.5
1000 0
2006
2005
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2007
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Starbucks Corporation 12
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•Strong Brand Iamge •Robust Financial Performance •Large Scale Of Operations
•Intense Competition •Volatile Coffee Prices •The Forbidden City Controversy
Strengths
Weaknesses
Threats
Opportunities
•Weak Compliance Fuction •Narrow Product Mix •Low Employee Productivity
•New Markets •Hear Music Label •Growing Specialty Coffee Market
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BERKELEY COLLEGE LIBRARY
O R G A N I Z A T I O N A L C H A N G E : A B I B L I O G R A P HY PREPARED FOR MGT420
EBSCOhost Academic Search Premier:
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Boyd, Clark. "Dogs Tags for Virtual Sniffing." Technology Review 110.4 (July 2007): 16-16. Academic Search Premier. EBSCO. 14 December 2007.
Hoover’s Online
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“Starbucks Corporation” Hoover’s Company Profile. Hoover’s Online. Berkeley College Lib., New York, NY. <http//premium.hoovers.com.ezproxy.library.berkeley.org>
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“Starbucks Corporation” Hoover’s Balance Sheet. Hoover’s Online. Berkeley College Lib., New York, NY. <http://premium.hoovers.com.ezproxy.library.berkeley.org/subscribe/co/fin/bala nce.xhtml?ID=ffffrhkchrhhyjjrfk&period=A>
“Starbucks Corporation” Hoover’s Income Statement. Hoover’s Online. Berkeley College Lib., New York, NY. <http://premium.hoovers.com.ezproxy.library.berkeley.org/subscribe/co/fin/inco me.xhtml?ID=ffffrhkchrhhyjjrfk&period=A> “Starbucks Corporation” Hoover’s Products/Operations. Hoover’s Online. Berkeley College Lib., New York, NY. <http://premium.hoovers.com.ezproxy.library.berkeley.org/subscribe/co/ops.xht ml?ID=ffffrhkchrhhyjjrfk>
Novel NY Business & Company Resource Center
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“Starbucks Corporation” Novel NY Company Profile. Berkeley College Lib., New York, NY. <http://galenet.galegroup.com.ezproxy.library.berkeley.org/servlet/BCRC?vrsn=un known&locID=nysl_me_berk&srchtp=glbc&cc=1&c=1&mode=c&ste=60&tbst=tsCM &tab=1&ccmp=Starbucks+Corp.&mst=starbucks+corp.&n=25&bConts=13247&ses= 1>
World Wide Web Sources <http://www.starbucks.com/mission/default.asp> <http://www.msnbc.msn.com> <http://blogs.bnet.com> Thomas Liquori
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2008 P A R T 2 : O R G A N I Z A T I O N A L C H A N G E : A B I B L I O G R A P HY
Books Book with one author
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David, Fred. Strategic Management, Concepts and Cases, 11th Edition. Francis Marion University, 2006.
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BERKELEY COLLEGE LIBRARY
O R G A N I Z A T I O N A L C H A N G E : F O O TN O T E R E F E R E N C E S PREPARED FOR MGT420
FOOTNOTES
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<http://blogs.bnet.com/ceo/?p=1534>
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WORLDWIDE WEB SOURCES
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