Caso Starbuks

Starbucks a Strategic Analysis Past Decisions and Future Options

4/17/2008 Brown University Economics Department Ryan C. Larson 08’

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Contents Introduction ......................................................................................................................... 4 Michael Porter’s 5 Forces Analysis (Past) .......................................................................... 7 Industry Rivalry ............................................................................................................................ 8

Potential for new entrants ........................................................................................................ 10

Substitute Products ................................................................................................................... 12

Bargaining Power of Buyers ...................................................................................................... 13

Bargaining Power of Suppliers................................................................................................... 14 Summary: The Five Market Forces in Specialty Coffee in 1987 ..................................... 15 Specialty Coffee Industry Attractiveness.......................................................................... 16 Starbucks’ Original Generic Strategy ............................................................................... 19 Starbucks’ Success Factors ............................................................................................... 22 First-mover advantage .............................................................................................................. 22

Expansion East ........................................................................................................................... 23

California Expansion .................................................................................................................. 25

The Catalog ................................................................................................................................ 26

The 1990s .................................................................................................................................. 26

Employee Satisfaction ............................................................................................................... 27

Maintaining quality of Arabica beans ........................................................................................ 29

The Third Place .......................................................................................................................... 32 Five Factors in Starbucks’ Success ................................................................................... 33 Michael Porter’s 5 Forces Model (Present) ...................................................................... 34 Industry Rivalry .......................................................................................................................... 34

Potential for New Entrants ........................................................................................................ 39

Substitute Products ................................................................................................................... 41

Supplier Bargaining Power ........................................................................................................ 42

Bargaining Power of Buyers ...................................................................................................... 44 Summary: Five Forces Analysis as of 2007 ..................................................................... 46 The Specialty Coffee Industry Life Cycle: ....................................................................... 47 An Evolutionary Process................................................................................................... 47 Specialty Coffee Growth Rate ................................................................................................... 48

Target Consumer Segment ........................................................................................................ 50

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Strategic Adaptation Strategies ................................................................................................. 52 Starbucks’ Corporate Capabilities .................................................................................... 55 Competitive Advantage in a Mature Industry ................................................................... 57 Market Signaling ............................................................................................................... 61 Summary of Analysis ........................................................................................................ 66 Recommendations for Future Action ................................................................................ 68 Increase International Expansion .............................................................................................. 69

Rewards Program ...................................................................................................................... 70

Rent Out Meeting Space and Install Free Wireless Internet ..................................................... 71

CD Burning ................................................................................................................................. 72

Increase Connection with Customer ......................................................................................... 72

Continually Improve the Coffee ................................................................................................ 74

Becoming More Environmentally Friendly ................................................................................ 74

Exhibit 1 ................................................................................................................................. 76

Exhibit 2 ................................................................................................................................. 77

Exhibit 3 ................................................................................................................................. 78

Exhibit 4 ................................................................................................................................. 79

Exhibit 5 ................................................................................................................................. 80

Exhibit 6 ................................................................................................................................. 81

Exhibit 7 ................................................................................................................................. 82

Exhibit 8 ................................................................................................................................ 83

Exhibit 9 ................................................................................................................................. 84

Exhibit 10 ............................................................................................................................... 85

Exhibit 11 ............................................................................................................................... 86 Exhibit 13 .............................................................................................................................. 89 Bibliography ...................................................................................................................... 92

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Starbucks and the Lifecycle of Specialty Coffee:

An Industry Evolving

Introduction

Today we stand witness to a new coffee era, one made up of Caffé Lattes,

Espresso Macchiatos, Cappuccinos and Frappuccinos. Specialty Coffee is here to stay

and no one will be more eager to tell you that than Howard Schultz, CEO of Starbucks,

the world’s largest specialty coffee bar. The study of Starbucks Corporation leads one on

a multifaceted journey through an organization’s insinuation into a culture, its dominance

of a market and its creation of a brand synonymous with loyalty, integrity and longevity.

Understanding Starbucks’ development into an international giant and the strategic

approach they took to get there begins with the origins of coffee itself.

Ever since it first spread through the Moslem world in the sixteenth century,

coffee has played a pivotal role in society by providing meeting places for intellectuals

from all sides of life to converge. As coffee was slowly introduced to the European

world it was recognized for both its sociability and its taste. Soon Coffee houses were

prevalent throughout Europe and were the natural locations for political, literary and

societal debate. It crossed the Atlantic Ocean in the mid-seventeenth century and

replaced beer as New York City’s favorite morning drink.

It can be said that the Boston Tea Party was the beginning of not one but two

major revolutions in America. The first was the revolt of the colonists against England,

and the second was coffee’s dominance as the beverage of choice for patriotic colonists.

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Throughout the history of America, coffee

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