Starbucks coffee company

STARBUCKS COFFEE COMPANY

I. COMPANY’S PRESENTATION

A. Historical Background

B. Structure

Starbucks is structured under a system, which is an “organizational form in which there are several lines of authority and some individuals report to at least two managers.” In July 2011, the company announced a new structure that includes three-regions, each of which is headed by a president who reports to Starbucks Global. The regional division are be as follows:

China and Asia Pacific markets

Americas = United States, Canada, Mexico, and Latin America

EMEA = Europe, U.K., Middle East, Russia, and Africa

The company also has a divisional structure as far as its products are concerned. All products are grouped under the Starbucks Company, but products are divided into five main groups:

Coffee: 30+ blends and single-origin premium Arabica coffees

Handcrafted Beverages: hot and cold beverages, Frappuccino, smoothies, and teas

Merchandise: mugs and accessories, packaged goods,

Fresh Food: sandwiches, salads, yogurt, and fruits cups

Consumer Products: coffee – whole bean and ground, instant coffee, and ice cream

II. Activity

Marketing mix

After deciding its target markets, the company must decide what position it wants to occupy in their target market. A product’s position is the way the product is defined by consumers on important attributes such as price, quality, competitor, etc

1. Product

2. Price

Price and quality determines the value of the product. When launched, Starbucks was expensive and was positioned in accordance with that. They always tried to deliver the high value promised to the consumers. They bought the quality beans, gave effective and efficient training to staffs, and moreover, made an atmosphere to enjoy coffee and ‘take a break’ from the busy life.

3. Distribution & Service

4. Promotion

All marketing activities that attempt to stimulate buyer action or sales of a product can be considered as promotion. Artworks were designed to boast each city’s personality, and it was used on commuter mugs and T-shirts. They didn’t use advertising. Besides, we often see American who runs with a Starbucks mug in movies. It contributes to make Starbucks coffee very trendy.

III. Financial

A. Turnover

Net profit

We can see on this graph the progression of the net profit. We can notice an important decline of profit in 2008 and 2009 due to the increase of the price of raw materials. But in 2010 their profit increases considerably.

B. Competition

The main competitor of Starbucks is McDonalds (especially in France) with its concept of McCafé with its prices lower than Starbucks.

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