Starbucks - ThomasLiquori.Me

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STARBUCKS CORPORATION
Thomas
Liquori
Digitally signed by Thomas Liquori
DN: cn=Thomas Liquori,
[email protected],
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
2008
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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Starbucks Corporation
12
2008
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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Starbucks Corporation
12
2008
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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Starbucks Corporation
12
2008
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
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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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
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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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2008
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Starbucks Corporation
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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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Starbucks Corporation
12
2008
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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Starbucks Corporation
12
2008
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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2008
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Starbucks Corporation
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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
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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
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Thomas Liquori
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Starbucks Corporation
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Starbucks Corporation
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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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Starbucks Corporation
12
2008
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>
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Starbucks Corporation
12
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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Starbucks Corporation
12
2008
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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