Ambernique L. Johnson



The Strategic Analysis of StarbucksGroup 7Dr. Kimberlee KeefMGMT 4710-0017 May 2014Table of ContentsThe Vision and Mission Statements of Starbucks – Samba Coulibaly2Proposed New Vision and Mission Statements – Samba Coulibaly2The History of Starbucks – Samba Coulibaly2Indicators & Symbols of the Starbucks Organizational Culture – Samba Coulibaly PAGEREF _Toc12011603 \h 4Competitive Profile Matrix – Laura Toldy5The External Opportunities & Threats of Starbucks – Justin Bolton8Porter’s Value Chain – Ambernique Johnson13The Internal Strengths & Weaknesses of Starbucks – Justin Bolton 14The SWOT Strategies Available – Justin Bolton18SPACE Matrix – Laura Toldy24BCG Matrix – Ambernique Johnson2 PAGEREF _Toc12011611 \h 6IE Matrix – Laura Toldy29Grand Strategy Matrix – Jesse Henderson30The Quantitative Strategic Planning Matrix – Jesse Henderson32Long-Term Objectives: Past Strategies – Josh Hiltenbrand PAGEREF _Toc12011599 \h 39Best Specific Strategies – Josh Hiltenbrand41Results & Implementations of Strategies – Josh Hiltenbrand50Annual Objectives to Achieve – Josh Hiltenbrand51Policies to Implement with Strategies – Josh Hiltenbrand5 PAGEREF _Toc12011599 \h 3Procedures to Evaluate & Review – Josh Hiltenbrand54Contigency Plans – Josh Hiltenbrand57Works Cited601). Identify firm and its existing and new vision and mission statements.The firm that we identified for this analysis is Starbucks. The Starbucks Corporation is headquartered in Seattle, WA, and has the largest coffeehouse company in the world with stores in multiple (64) countries of the world. Starbucks stores serve both hot and cold beverages. Pre-packaged food items, and sandwiches are also sold at their stores. We visited the official website of Starbucks to discover their mission and vision statements. The mission of Starbucks is “to inspire and nurture the human spirit – one person, one cup and one neighborhood at a time”. We, however, did not find any vision statement from Starbucks.2). If needed, develop new vision and mission statements for the firm.We would like to propose the vision statement for Starbucks – “Starbucks will want to be the most preferred coffee joint and a place to both hangout and rejuvenate for people across the world and make effort to inspire and nurture the human spirit”.We also feel that while the mission statement should be specific, the current mission statement is too much focused on one customer, the desire to meet his/her demands and cater to a neighborhood. We would take the first part of the mission statement out about human spirit to the vision and will have the following mission statement- “Starbuck’ mission is to grow its business globally by providing its customers the best experience both in terms of products as well as service and ambiance”.3). Firm’s history (how they started, etc., what are they known for?)Starbucks operates in the restaurant industry founded by Jerry Baldwin, Gordon Bowker, and Zev Siegl in 1971. When the company was founded, it was a roaster and retailer of whole bean, ground coffee, tea, and spices with a single store in Seattle’s Pike Place Market. Based on the information from Starbucks’ website, Starbucks positioned Howard Schultz as the director of retail, operations, and marketing in 1982. After this, Starbucks began providing coffee to fine restaurants and espresso bars as well. After visiting Italy in 1983, Howard was impressed with the espresso bars in Milan and thought of developing a similar coffeehouse culture in Seattle. After a year, he convinced the founders of Starbucks to test the coffeehouse concept in downtown Seattle where the first Starbucks Cafe Latte was served. In 1985, Howard founded Il Giornale, a company offering brewed coffee and espresso beverages made from Starbucks coffee beans. In a couple of years’ time, Il Giornale acquired Starbucks assets with the backing of local investors and changed its name to Starbucks Corporation. At that time in 1987, Starbucks started opening stores in Chicago and Vancouver, Canada, and had 17 total stores. As the business grew, it started offering full health benefits to full-time and part-time employees and slowly expanded with 33 stores by the end of 1988, 55 stores by 1989, 84 stores by 1990, and 116 stores by 1991. In 1992, the company completed its initial public offering with 165 stores and opened up roasting plant in Kent. In 1994, Starbucks opened up its first drive-thru location, and in 1995 it began serving Frappuccino blended beverages and opened another roasting facility in York, PA. Japan and Singapore happened to be the locations for its first outside North America stores by 1996. By that time, the company had 1015 stores in all. In 1997, it established the Starbucks Foundation and opened up stores in Philippines. The number of stores gradually grew with more stores opened in England, Malaysia, New Zealand, Taiwan, and Thailand. Currently, the number of stores is at a staggering 19,767 with its presence in South America, Central America, Asia and most of the countries of Europe. As per the statistics in 2013, Starbucks has 160,000 employees and revenue of $14.89 billion in Financial Year 2013.Starbucks is best known for its coffee products. However, they are “not just passionate purveyors of coffee, but everything else that goes with a full and rewarding coffeehouse experience. [They] also offer a selection of premium Tazo teas, fine pastries and other delectable treats to please the taste buds. And the music you hear in store is chosen for its artistry and appeal”. Starbucks coffeehouses are often a place where people come to chat, meet up or even work at times. Starbucks store project themselves as the neighborhood gathering place where one could experience a social, clean, eatable ambiance with a lot on offer.4). Describe indicators and symbols of organizational culture for the firm.Symbols play a huge role in the development of culture in an organization. Over time these symbols help in the creation of identity, response routines, and values that help the perpetuation of the activities in an organization. Starbucks provides an example of an organization that has grown leaps and bounds while keeping its culture intact. Starbucks has been tremendously successful for numerous reasons; however, customers return because of the unique experience. Employees are friendly and welcoming, often remembering names of frequent customers. Starbucks knows the value of its culture and it recognizes the importance of hiring the right people to continue to make customer’s experience enjoyable. Starbucks' culture is mainly to be the "third place" for an individual after home and work. This kind of mind set explains a lot about what Starbucks wishes to represent for a customer. Starbucks wants to be part of a customer's life, immersed in his/her everyday routine. Part of Starbucks' culture as well is building a common vision for its employees so that they would share the vision and purpose of self-esteem and self-respect. These kinds of values all contribute to well-known Starbucks culture that is familiar to any Starbucks customer worldwide. Starbucks artfully and purposely develops and maintains an organizational culture with which customers and stakeholders identify. In essence, Starbucks created its own community, driven and expressed by symbols and language, built on the shared aspirations of its customers, who come to view the store and its meanings as a way of life. The Starbucks’ lifestyle helps patrons not only understand themselves, but also become a version of themselves through the symbols, ideas, and ideologies that the corporation values. Starbucks’ attempts to recreate the social experiences and communal rituals of Italian cafes and British pubs have been aided by company language designed to foster feelings of belonging and connection. What one finds in Starbucks stores in the U.S. and worldwide is a template, or sameness, that many customers find comforting. From the familiar logo to the dark wood interiors and constant smell of coffee beans, Starbucks provides reassurance to coffee drinkers regardless of location, perhaps even a bit of home as they travel.The first sentence of the Starbucks website page ‘Our Heritage’ reads: “Every day, we go to work hoping to do two things: share great coffee with our friends and help make the world a little better”. The accompanying picture provides a counter-level view of the Starbucks logo with the words ‘Espresso’ and ‘Cappuccino’ in neon. Consumers begin to associate Starbucks with the American ideal, and in order to fill the emptiness they consume a product that they feel is the epitome of the ideal American lifestyle.5). Construct a Competitive Profile Matrix for the Firm. Illustrate with the CPM LINK Excel.Sheet.12 C:\\Users\\ltoldy\\Desktop\\Free-Excel-Student-Template_May_2013.xlsx CPM!R8C1:R23C10 \a \f 4 \h \* MERGEFORMAT Competitive Profile Matrix (CPM)?StarbucksDunkin DonutsMcDonaldsCritical Success FactorsWeight RatingScoreRatingScoreRatingScoreAdvertising0.0620.1230.1840.24Market Penetration0.1030.3020.2040.40Customer Service0.0840.3230.2420.16Product Variety0.0630.1840.2420.12Brand Recognition0.1240.4820.2430.36Employee Dedication0.0630.1820.1210.06Financial Profit0.1130.3320.2240.44Customer Loyalty0.1040.4020.2030.30Market Share0.0930.2720.1840.36Product Quality0.0740.2830.2120.14Social Responsibility 0.0840.3230.2410.08Price Competitiveness0.0720.1430.2140.28Totals1.00?3.32?2.48?2.94The competitive profile matrix help Starbucks better understand what makes them different from their competitors and what areas do they have to improve in order to keep their leading position in the market. In the following, we will be evaluating Starbucks against its two biggest competitors; Dunkin Donuts and McDonalds.As the table shows, Starbucks has a stable leading position with a score of 3.32. The most important evaluative criteria are; customer service, brand recognition, customer loyalty, product quality, and social responsibility. These five factors are crucial to the success of Starbucks` over its competitors, these are the reason why Starbucks can price their product higher and still compete with Dunkin Donuts and McDonald`s.Dunkin Donuts and McDonald`s have been trying to keep up with the rapid success of Starbucks. However, it seems like Starbucks has established such a strong brand they cannot compete. Starbucks` two major competitors are McDonald`s and Dunkin Donuts. They both offer coffee but they do not do it as Starbucks does.Starbucks has established such a strong brand with its excellent customer service and product quality that customers stick to its brand no matter what. Starbucks has a major focus on customer service; the company understands its customers and knows what they like when it comes to coffee. Starbucks does a lot to provide customers with the best experience at their stores. The company trains their employees in a way that none of the competing brands do. Starbucks wants its employees to know everything about coffee so they can answer any questions a customer might have. There is no wonder that customers stay loyal to the Starbucks brand.Starbucks only serves high quality coffee made with the best espresso machine available out there. This is why customers know and love Starbucks because it is constantly providing high quality. In other words, when you go to Starbucks you know that you will end up with a good cup of coffee quickly and this is why customers keep coming back.In addition, Starbucks offers many social responsibility programs such as educating farmers about coffee and providing kids with meals. Therefore, customers keep coming back because they know that it is a company that not only serves good coffee but it helps making the world a better place.McDonald`s had tried to imitate Starbucks strategies with opening up McCafé houses however they could not provide the same customer service and atmosphere that makes Starbucks so unique. Today McDonald`s tries to keep up with Starbucks by offering lower prices and advertising their coffee more.The question which coffee tastes better Dunkin Donuts or Starbucks has been asked many times. The answer seems to be not so much about the taste of the coffee but the location of the stores. Dunkin Donuts was founded in Massachusetts, whereas Starbucks originates from Oregon. Thus, people on the East Coast prefer Dunkin and people on the West Coast prefer Starbucks. It seems very simple but Starbucks has more stores and offers a wider variety of coffee than Dunkin Donuts. Starbucks also offers a much higher quality, therefore if somebody desires quality coffee made from quality beans with a quality espresso machine that person will pick Starbucks over Dunkin Donuts.In conclusion, Starbucks had been able to lead the market because it puts effort into educating their employees about coffee so they can provide the highest level of customer service which helps them maintain customer loyalty. Starbucks is also mastered creating the best atmosphere to sip on your coffee by investing a lot of in designing stores. It is also recognized as a socially aware brand which makes customers wanting to come back. Furthermore, Starbucks offers the highest quality and a wider range of variety then any of the competing brands that is why Starbucks has been able to build a leading global brand.6). Identify Firm’s External Opportunities and Threats. Illustrate with the EFE Matrix?External Factor Evaluation Matrix (EFE)????OpportunitiesWeightRatingWeighted Score1.China is becoming more open to the world and presents as a major market to further penetrate. 0.1040.402.Franchising out prepackaged operations outside of Starbucks locations, such as giant retailers.0.0630.183.Green techniques and practices can be pursued by companies to be eco-friendly and gain goodwill. 0.0630.184.Opportunities for continued growth for in international markets outside the saturated US market. 0.0520.105.Teaming up with other retail locations such as bookstores can prove as increased profits. 0.0520.106.Bringing more Free Trade products in the retail locations can help with the ethical friendly perception. 0.0420.087.Advancements in technology are available to refine and better business processes.0.0520.108.Emerging and developing companies are opening opportunities for retail expansion. 0.0310.039.With competition still far behind, domestic growth will allow for domination of the market.0.0520.1010.Emerging and developing economies will provide more distribution channels to help stabilize the fluctuating price of coffee.0.0640.24The above EFE matrix lists the ten current opportunities that Starbucks could pursue in their external environment. These opportunities take into account, both chances to adapt to an ever-growing market, as well as growing in general (David, 2013). This is imperative to be monitored and exploited as so the company does not fall behind the tight competition that are also pursuing expansion in these areas. The first area of opportunity for Starbucks is expansion. China is becoming more and more open to the rest of the world making for quickly growing market potential. Emerging and developing companies in various parts of the world are also becoming viable options for retail expansion. Finally, with the domestic market becoming saturated with companies in this area, continued growth opportunities are plentiful outside of the United States (“Annual Reports”, 2013).According to the fiscal 2013 report released by Starbucks, China and the Asian Pacific segment, was the quickest growing region in regards to sales. This growth was totaled at twenty-seven percent overall. These numbers continue to look very promising moving into the future. Also, within this fiscal year, Starbucks opened 206 additional stores in the China region alone. This is opposed to the 193 stores opened in the United States. Keeping these numbers high internationally is vital for the company to adapt and continue to grow. With this strategy continuing to unfold, China will become the second biggest market for Starbucks, next to America (“Annual Reports”, 2013).This need to grow is also coming off the heels of the US market becoming more and more saturated. With the success of Starbucks, many companies have started getting into the market by adding similar products lines to their product mix. Some of these companies include Burger King, McDonalds, Wendy’s, Subway, Sonic, and 7-Eleven to name a few. All of these companies are heavily based in the United States as well and are becoming viable competition. With more and more companies moving into the coffee beverage market, growth in profits will need to begin coming from emerging markets (“SWOT”, 2013).Although growth in emerging markets is vital to the growth of Starbucks, this does not mean that they should abandon domestic growth. A large majority of revenues still comes from the US region, with seventy-four percent of the revenue. Even with the stiff, and ever-growing, competition in America, Starbucks still dominates the market in retail operations. Keeping this unchanged is imperative to be able to fund growth in emerging markets. This requires Starbucks to keep a steady growth pattern within the domestic market. This, however, can leave the company with other downfalls, such as neglecting internal growth over external growth in general (“Annual Reports”, 2013).Another major focal point for the opportunity of growth is the continuation of joint ventures, as well as signing new deals. This provides extra streams of revenue coming into the company. This provides opportunities to expand in bookstores, grocery stores, specialty retailers, and even convenience stores. A major joint venture that is currently held and makes these options possible is with Pepsi-Cola, which produces their ready-to-drink beverages. These prepackaged beverages make it possible for the Starbucks brand to make it into retail giants, such as Wal-Mart, Kroger, and Walgreens. Joint ventures can also be extremely helpful in markets that are not easily penetrated due to cultural variables. These ready-to-drink-beverages and prepackaged items accounted for almost ten percent of the revenue for the 2013 fiscal year. This leaves an opportunity to continue expansion in these areas to further increase these margins by expanding on current ventures while attempting to gain new ones as well (“Annual Reports”, 2013).The next aspect of the EFE matrix is the threats of the company. This lists the ten top threats in the company’s external environment at the current time (David, 2013). The biggest threats that are listed in this matrix have to deal with the topics of coffee distribution, market saturation, high pricing strategies, and health-oriented consumers. Each of these looming threats can, on its own, set the company back, both financially and in public perception. With these reasons in mind, these threats should be understood and monitor to discover the best way to minimize their threat and circumvent completely (“Annual Reports”, 2013).The first threat that should be taken into mind is the subject of the manufacturing and collection of coffee beans. This requires being constantly aware of the heightened tension growing between governments which could, in turn, put an added strain on trade and investments occurring outside the country. Even without this added stress of governments, the price of coffee being imported has been historically unstable due to major fluctuations. With these continually growing prices, this could begin to cut into profit margins, enough to where prices may have to be increased to offset these price growths. Finally, the mistreatment of third world coffee farmers is becoming more well-known to consumers. This has brought on movements, such as Free Trade products, to ensure that these farmers are treated with the highest of standards. Receiving negative publicity on this subject could spell disaster in public relations if customers began to boycott, or take action in any form (“SWOT”, 2013).The next topics deal with the issues regarding the growing saturation of businesses in the retail coffee market, as well as the growing health trend in the United States. This topic was touched upon in the previous portion of the paper; however, the high pricing strategy becomes more unsteady as the market begins to add even more options for coffees at various different locations and prices. The health-oriented consumers also fall into this area of threats. Many consumers are reducing their consumption of these products due to their unhealthiness, and some cutting them out completely. These two threats mixed together can spell disaster for the bottom line. If a company were to begin marketing a line of coffee beverages with the healthy consumer in mind, then this could have the possibility of increasing their consumer base, or pulling consumers away from Starbucks (“Annual Reports”, 2013).With the entirety of the external factors taken into consideration, Starbucks has a 2.44 rating in the EFE. The standard score here is normally around 2.5, putting Starbucks just slightly beneath the average company. This can be interpreted that the company is right around the average mark for responding to external opportunities while minimizing threats to the company. Compared to the internal environment, which will be covered next, the external is lacking and needs to be dealt with more effectively (David, 2013).7). Construct Porter’s Value Chain for the FirmPorter’s value chain for Starbucks is fairly simple. The components of the value chain I created had five simple characteristics. Also, having good value and more value gives the company sufficient enough room to make bigger profits which is always a plus. The characteristics of the value chain that was created exemplify the keys factors of the Starbucks Corporation during the fiscal year of 2013.The components of the value chain above are product development, bean and ingredient selection, product distribution, store front, and take home products. Adding teas and influences internationally give the product an authenticity and that helps keep the customers loyal to the Starbucks brand. Having a good quality coffee bean selection is very important when dealing with the bean and ingredient selection, because you want a higher quality bean so that the coffee has a rich and potent flavor. High quality coffee beans are found all around the world from Fair Trade suppliers. After products are made, they are then distributed to different locations to be sold. Locations vary and they range from airport terminals, grocery stores, and franchise locations. Take home products would include such things as gift cards, coffee to make, tea to make, gift cards, and desserts.In the fiscal year of 2014, mobile applications will hopefully be added to the value chain because the actual Starbucks mobile application is awesome and i features great things that I deem as valuable and important to the Starbucks Corporation.8). Identify Firm’s Strengths and Weaknesses. Illustrate with the IFE Matrix ?Internal Factor Evaluation Matrix (IFE)????StrengthsWeightRatingWeighted Score1.The Starbucks brand is very recognizable and easily one of the most recognizable brands in the coffee market0.1040.402.Starbucks keeps products as luxury and as comfort item rather than items of simple convenience.0.0530.153.Employee morale is kept high within the business due to high ethical standards and staff benefits.0.0530.154.The ability to advertise themselves well within the market they are defined. 0.0540.205.Starbucks have sound financial records that allow it comfort to pursue aggressive strategies. 0.0640.246.The atmosphere of the retail locations is appealing to their market base, bringing people in for longer periods of time0.0330.097.Carefully chosen locations in high traffic areas ensure constant visibility and exposure. 0.0530.158.Perfection goes into the selection of each ingredient of a new product to make the highest quality product at the lowest cost to produce.0.0740.289.A large amount of time is put into training each barista to make every drink offered effectively and efficiently. 0.0330.0910.Strong customer base that is loyal to the Starbucks brand to go as far as create regular routines. 0.0640.24The Internal Factor Evaluation Matrix, or IFE, gauges how well a company reacts to strengths and weaknesses within the company. The above matrix detailed ten strengths that Starbucks currently has going for them to use as an advantage (David, 2013). Currently, some of the biggest strengths for the company to leverage are the Starbucks brand and logo, its position in the market, its current financial records, and the ability to advertise themselves well (“Annual Reports”, 2013).The first, and possibly one of Starbuck’s biggest strengths, is the Starbucks brand and logo. This brand has become very easy to recognize across the world. In regards to a survey provided by Forbes, Starbucks ranks seventy-sixth in most recognizable brands across the world (“Starbucks”, 2013). They have also further strengthened this by acquiring other companies in their horizontal market with powerful brands including Tazo Tea, Seattle’s Best Coffee, and Teavana. This strength will work to the favor of Starbucks when it comes to further growth and expansion in markets that have already been penetrated (“Annual Reports”, 2013).Starbucks has also worked hard to define themselves as an “affordable luxury.” They are able to sell their coffee beverages at a premium price while keeping a strong customer base. This strength can be contributed to a variety of strengths also listed here. One benefit is the overall atmosphere in their retail locations. These locations have been described as calming and relaxing. People come inside for a varying amount of reasons other than just purchasing products. Whether it is to work on a paper or to just sit with friends, people come into the store and stay for elongated periods of time. The longer people stay, the potential to sell products rises (“SWOT”, 2013).These strengths listed above have resulted in another major strength of Starbucks, which is their sound financial record. Revenue growth has been a trend for Starbucks, especially in the Americas and the China/Asian Pacific markets. The China/Asian Pacific market alone grew revenues by twenty-seven percent. The Europe/Middle East/African markets have also begun to provide positive revenue growths again. Having these sound financial records is an important factor in determining future strategic planning. Continuing to penetrate new markets will be a costly plan, and the continued growths in revenue will be needed to follow through these plans successfully (“Annual Reports”, 2013).Finally, the last strength to be mentioned is the ability to advertise themselves well within the market and having the funds to achieve this. Starbucks has chosen a strategy in their marketing mix to effectively get their message out to their customer base while using marketing funds efficiently. Marketing expenses for the 2013 fiscal year totaled 306.8 million dollars. This can be compared to other beverage companies that tip the billion dollar mark. Since 2011, the marketing expenses for Starbucks, however, have increased by roughly twenty-five percent. This could begin to spell trouble for them if this number continues to swell (“Annual Reports”, 2013).On the other side of the coin, the above graph lists out the ten biggest weaknesses that Starbucks has in their internal environment. These weaknesses should be solved by efficiently leveraging their own strengths before another company within the market is able to exploit these weaknesses (David, 2013). A few of the major weaknesses that Starbucks has to contend with at the time being is the overdependence on the US domestic market, the self-cannibalization of sales, and the overdependence on coffee beverages (“Annual Reports”, 2013).The first major weakness that Starbucks has to contend with is the overdependence on the U.S. markets. In the 2013 fiscal year, Starbucks received almost three quarters of their revenues from the American markets. Having to rely this heavily on a single market can be easily construed as a major weakness. If anything changed for the worse in this market, it would directly affect the bottom line of the company. The Starbucks Company needs to combat this by investing in the penetration and growth in markets outside the United States (“Annual Reports”, 2013).The next major weakness that needs to be tackled is the self-cannibalization of sales from closely positioned stores. Even though having a Starbucks on every corner in a city gives patrons the ability to choose which store they will frequent, this is taking away the overall potential sales of other stores. Even though the revenues are still flowing into Starbucks, this could be accomplished with fewer stores in some regions. This could cut down on fixed costs that each storefront location has to pay while strategically maximizing sales with certain locations (“Annual Reports”, 2013).The final important weakness that needs to be watched is the overdependence on the coffee market alone. The coffee market can be very unreliable when it comes to the stability of pricing. Many varying factors, that are unpredictable, go into whether a year will bring a good harvest or not. This also comes on top of strained relationships with governments and the growing mistreatment of coffee farmers in general. Even though Starbucks is predominately in the coffee market, they have overdependence on this market. The continually fluctuating price of coffee can leave a dent in the profit margin of that fiscal year. This can be offset be pushing more into other markets such as baked goods and other products close to the market in order to alleviate the pressure of rising coffee prices (“Annual Reports”, 2013).With all of the strengths and weaknesses taken into consideration, our calculations returned a rating of 2.75 for the internal environment. This places Starbucks just a bit higher than the average score of 2.5. This means that Starbucks has a slightly better reaction to changes in their internal environment than the average company. This number is also slightly higher than the result given from the external factors evaluation. This discretion shines a light on the fact that Starbucks needs to put a little more focus into adapting to their external environment, especially when it comes to growing outside of the domestic market (David, 2013).9). Prepare SWOT Matrix (Strengths, Threats, Opportunities, and Weaknesses/ Alternative Strategies) Fill in EACH of the 4 empty cells of the SWOT with at least TWO Alternative Strategies) With the strengths, weaknesses, threats, and opportunities listed and described in the previous two points, the next process to be completed is the SWOT strategies matrix. This intercepts the outcomes of the SWOT analysis and puts them into possible strategies to be used. These strategies are combined into strengths/opportunities, strengths/threats, weaknesses/opportunities, and weaknesses/threats (David, 2013).The first set of strategies is classified under strengths and opportunities. This area is more about moving forward than it is about shielding the company from weaknesses or looming threats. These aspects are taking strengths within the company and applying them to achieve any opportunities to be had in the most effective way possible (David, 2013). After an analysis of these strengths and weaknesses, we determined that the more important aspects to be observed were international growth, growth through licensing, prepackaging products and partnerships, the health movements in the United States, and finally the growth of technology in society. With these in mind, our primary strategy under this heading is to diversify globally into international markets, paying close attention to local cultures (“Annual Reports”, 2013).The second strategy also falls under this idea of penetrating new markets by advertising and advancing joint venture allies to strengthen existing and new partnerships, prepackaged products, and licensing. As spoken about earlier in this analysis, China and the Asian market, is becoming a major emerging market to the world. Starbucks has already responded by this by opening more stores, in the past fiscal year, than in any other region. The market has already retorted to this action by returning massive profit growth percentages. This, and other markets, can be penetrated in many various ways. This can be achieved through direct store openings and licensed stores, or can be as simple as getting into a local retailer to sell ready-to-drink beverages and prepackaged products (“Annual Reports”, 2013).The next two strategies can also be seen as linked together at the high level. The first is to take advantage of the health movement in order to introduce organic coffee and likewise products, likely at a slightly higher price. The second strategy is to take steps to make the store area even more technology friendly, both for the consumer and for business operations. The health movement has been sweeping through the American population here recently. Many companies have seen decreases in sales for products that are deemed unhealthy. Starbucks has a strong strength in implementing new coffee-based beverages for their consumers and can be leveraged in this area (“Annual Reports”, 2013).This strength would carry major incentives to introduce a new healthy line of coffee and food products. As for the more expensive price, Starbucks already considers themselves an affordable luxury with the average consumer making close to $100,000 a year. Those truly eating a healthy diet with this kind of funding would not be deterred by a small increase if this product line was successful. This market base is also very technology-savvy. Making the store area more technology friendly could help bring in more customers inside the store, and they are more likely to stay longer, which in turn increases the chance of purchasing more items. On the business side of this, major technology upgrades would be a steep expense at the front side. This, however, would pay off in the long-run with the reduced costs of operating on a daily basis (“Annual Reports”, 2013).ST Strategies1With sound financial records, Starbucks should devote funding to develop new health-friendly products2Starbucks need to invest in developing more budget friendly drinks to bring cash-strapped customers back.3Refine ingredients in current drinks to be leaner and disclose nutritional contents to be more transparent. 4Drop popular beverages to $.50, and use aggressive advertising to promote these price changes. The next set of strategies is labeled under the title of strengths and threats. This area leverages a company’s strengths in order to circumvent and minimize the chances of external threats occurring. The major strength to take away from the IFE is their solid financial statements (David, 2013). This, more than anything, can help Starbucks deal with looming threats on a general basis. The two threats that could be best averted through these strategies are higher prices of coffee products in the undesirable economy and the loss of customers due to a strong health movement (“Annual Reports”, 2013).To begin with, the first threat to handle is the growing health movement. As mentioned before, this is hurting many companies as they lose business on unhealthy products. This is a chance for Starbucks to not only introduce a healthier line of beverages, but to refine the ingredients of current beverages to make them leaner and healthier without affecting taste. With Forbes rating the Starbucks Company in the nineteenth position in terms of inventiveness, it would be a perfect team to create the new line of healthy beverages (“Starbucks”, 2013). This strategy would also give the opening to disclose the nutritional content of products in order to be more transparent. The other main threat is the price of coffee in a receding economy. Even though Starbucks considers themselves as an affordable luxury, many people who frequent Starbucks are spending discretionary income (“Annual Reports”, 2013).With the unfavorable economy, the discretionary spending of the average consumer has dropped. Two strategies that could help offset this loss of discretionary spending is creating a new budget friendly line of coffee beverages and slightly dropping the price of more popular beverages. The new price friendly line of beverages would bring in more customers that, otherwise could not afford top line beverages. With this in mind, I would not drop prices to match lower quality coffee providers such as McDonalds, but to find a happy medium between the two. The second strategy would involve slightly decreasing the price of certain popular beverages. Even though this would cut into profit margins, the idea is that the extra sales would make up for the reduced profit margins. This can be further achieved through a heavy marketing strategy to advertise these price decreases (“Annual Reports”, 2013).WO Strategies1Create products outside coffee to diversify as well as remove dependence on market swings2Switch focus onto internal growth opposed to aggressive store expansion within the US.3Make joint ventures with various companies to grow more sources of revenue, such as hotels & planes. 4Use deals to increase food sales through combos or refill days to bring customers back more often The third set of strategies is combining points from the weaknesses and the opportunities analyses. This is aiming at refining the weaknesses of the company by pursing the opportunities in the external environment (David, 2013). Some of the threats we chose to focus on is the overdependence of the coffee market in an already saturated market and the overaggressive growth strategy opposed to internal growth. These can be offset by the growing market to partner with other companies with licensing and joint ventures, as well growing product lines internally while penetrating international markets more heavily (“Annual Reports”, 2013).The first strategy here is to diversify product lines outside of coffee beverages. In doing this, this will also help detach the business from the sheer dependence on coffee products, which is prone to market swings. Diversifying the business will help stabilize it in the long-term timeline. This, however, must be taken carefully, because the list of factors that can cause a product to fail is endless. One example of this was the move into breakfast by Starbucks. They quickly found out that the aroma of coffee and breakfast was not the most ideal of smells, hurting the business (“Annual Reports”, 2013).Another way to achieve this is by following the joint venture route and creating more streams of revenue by creating more product lines in the form of ready-to-drink products and prepackaged products in general. A market that could be very profitable by doing this is traveling, such as hotels and airlines. The other main strategy is to take a less aggressive stance on domestic expansion and opt for more internal growth, as well as international growth. Starbucks needs to ensure that every location is giving the best service in all ways possible (“Annual Reports”, 2013).Creating a better experience for the consumer should always take priority. One way this can be accomplished is to create deals that consumers can take advantage of. This can be in the form of discounts on food when coffee is purchased to help grow other product lines. This can also be achieved by designating certain slow days as refill days, where a customer who had a purchase of a certain denomination could come in and get a select free coffee beverage. This will also help bring in customers on slow days, giving even more of a chance to make a sale on another item (“Annual Reports”, 2013).WT Strategies1Starbucks should bring in more Free Trade products to build goodwill since actions are more closely watched.2Starbucks needs to grow advertising campaigns to fight growing competition from all sides of the market. 3Start a campaign for the better treatment of coffee farmers in third world countries.4Try to appeal to a wider customer base than the current market base that is advertised towards. The final set of strategies combines weaknesses and threats to the business. The purpose of this is to take a defensive stance by not only reducing controllable weaknesses, but by avoiding known threats altogether (David, 2013). One of these threats is the growing competition from all sides of the market and the mistreatment of third world coffee farmers (“Annual Reports”, 2013).Some people have criticized that Starbucks does not carry enough Free Trade products. These products are produced under the assurance that they were created under a high set of ethical standards. By using more of these products, it will help lessen the critics from this aspect while avoiding an even bigger misstep of being labeled as a company that mistreats third-world farmers, which could have bigger consequences. With the market becoming more and more competitive from all aspects, Starbucks needs to constantly be working to differentiate themselves so they do not fall under the threat of a saturated market. This can be achieved by growing bigger advertising campaigns as well as appealing to a wider market base. Many companies have gone on these advertising campaigns and have used this opportunity to take shots at Starbucks. This could be a chance to put the Starbucks brand and logo even further out there as well as be angled to bring in more demographics to keep profit margins growing overall (“Annual Reports”, 2013).10). Prepare SPACE MatrixAfter completing the SPACE matrix it is clear that Starbucks should follow an aggressive strategy since it is a financially stable company and it is in a growing market. An aggressive strategy has five main components; integration, market penetration, market development, product development, and diversification.Starbucks represents a forward integration strategy which is the concept of having more control and increased ownership over distributors as well as retailer. A perfect example to this is that Starbucks has an agreement with Green Mountain Coffee Roasters to sell Tazo-branded coffee and tea in their brewers. In this way, Starbucks can reach their customers on an even broader spectrum providing that they stay the market leader in the coffee industry.Another typical tactic of an aggressive strategy is market penetration. Market penetration means achieving higher market share for present or new market via new marketing efforts. Starbucks is expanding rapidly domestically as well as globally. It does not matter where you are people know the brand Starbucks. Starbucks is opening new stores in Vietnam and India and it is doing great in the Latin American areas as well as in Europe and in the Middle East. Nonetheless, it is tripling its number of stores in China. It is no wonder it was able to yield a revenue growth in 2013.Starbucks would not be this successful without its excellent product development which constantly introducing their existing products to new markets. Bringing coffee to the world can be a tricky business since customers` preferences might differentiate on a big scale but Starbucks seems to be handling it well. Like mentioned earlier, it is continually expanding into new geographic areas.Starbucks` key to its success in so many different geographic areas that it is able to offer continuous product development. This means Starbucks has mastered how to improve or modify their products to suit their customers` taste. It is a very crucial point especially when you have to please so many different geographic areas. Product development such as, introducing the new Hazelnut Macchiato or the Reserve Coffee brand from Colombia are all to please customers. After all, Starbucks is as successful as it is because it knows coffee and what its customers want more than any other competing company.In order to satisfy customers` demand, Starbucks must use related diversification, which is its value chain possess competitively valuable cross –business strategic fits. Starbucks recently came out with their new bakery brand called La Boulange. Moreover, the company had recently opened their first Teavana Fine Teas + Tea Bar in New York City. This is an attempt to transfer the experience of having a cup of tea just like they transformed the ultimate coffee experience. Starbucks is also creating new healthier drinks as people are becoming more health conscious, which could represent a great opportunity for Starbucks to yield more revenues.As the above examples show, Starbucks is representing an aggressive strategy which makes sense as it is the absolute leader in the market. Currently, there is no other company that could compete with Starbucks. Aside from its absolute leading position, Starbucks always strives for the best and it keeps improving its brand. The key to its aggressive strategy is to have its brands placed in other retail stores, to expand more globally, and to have improved and new products. This aggressive strategy will likely to secure Starbucks` leading position in the coffee industry.11). Prepare BCG MatrixWith the BCG matrix, it tells us how and which areas of the organization or business which in this case is Starbucks need more investment and more resources. In the following explanation, I will be examining relative market share position dealing with Starbucks and every division that is relative to all the other divisions.`We all know that Starbucks is the world’s leading retailer of high quality specialty coffee as well as the top roasting company. We have used the four divisions that make up Starbucks worldwide to evaluate their financials and where they stand as far as the fiscal year of 2013. The Americas, EMEA, CAP (China/Asia), and Channel segments all make up the four divisions that will be talked about. All four divisions either fall into the Star category or Question Mark category. A little background information on the question mark category is that the divisions in this quadrant often time have a lower market share position in a high growth industry. The star category is basically representing the high relative market share and high industry growth rate.The Americas has the highest percentage of profits out of all four divisions with 74% and total profit of $11,000,800,000 with a remainder of $3,891,140,000. Revenues grew over 11% and store sales rose 7%. Growth and expansion in food offerings, improvements and adjustments to the operational aspect of Starbucks, and new beverage innovation and advancement all played a major role in the rise of store sales and profits in the Americas. Sales and profitability are expected to consistently grow in the coming fiscal year especially with new stores and franchises on the rise and new products constantly being rolled out. The Americas are considered a star because they are continuing to grow at steady rates and they have one of the best organizations with long time running for profitability and growth.The next division that also fell in the star category was the EMEA division which consists of the European, Middle Eastern, and African countries. With a total profit of $1,160,000,000 they only made up 8% of the EMEA’s profit and had a remainder of $13,732, 200,000. Even though they were far behind the Americas, the EMEA’s have consistently progressed to work towards having long term profitability and will continue to do so for the fiscal year of 2014. With a 2% revenue increase, that helped in the overall profitability of the EMEA Starbucks. Stores that were under performing had a change in the ownership structure and improved store sales during the second half of the fiscal year of 2013. Continuing efforts to improve cost management and portfolio optimization caused the company’s operating margin to rise to 5.5% in 2013. In the next fiscal year, there should be an even bigger improvement in overall sales revenue and profits.In the CAP division, which is made up of China and Asia, they fell into the question mark quadrant because they had a low market share but they compete in a high growth industry. The CAP division had a total profit of $9,117,000,000 and a remaining profit of $13,975,200,000. With the already existent store base that has been performing really well, and new stores coming along, these two things caused total revenue to rise 27% during the fiscal year of 2013. Store sales grew 9% as well as operating income grew 27% (321 million). The operating margin remained the same at 35%. The operating margin did not really change because store growth was moving away from the original historical model. In the future, profitability is expected to be a more major factor especially with new stores opening up.Last but not least, with the Channel Development division, they had a total profit of $1,814,400,000 and a remaining profit of $13,077,800,000. Revenues rose 10% in this division during the fiscal year of 2013. This was due to growth in sales of single serve products that Starbucks carries. In the future, the Channel division plans to increase sales even more with the single serve products and hopefully it will become more a contributor in the future.12). Prepare IE MatrixThe Total IFE Weighted ScoresStrong Average Weak4.0 to 3.0 2.99 to 2.0 1.99 to 1.04.0IIIIIIHigh17145057150003.0IVVVI18097515240000Medium2.0VIIVIIIIX247650571500038100015240000Low1.013). Prepare Grand Strategy MatrixFrom the data collected for the Strengths Weaknesses Opportunities and Threats (SWOT) Matrix, Strategic Position and Action Evaluation (SPACE) Matrix, Boston Consulting Group (BCG) Matrix, and Internal-External (IE) Matrix, we are able to create an informed opinion to create our Grand Strategy Matrix. The purpose of the Grand Strategy Matrix is to formulate alternative strategies for organizations determined by two evaluative dimensions, competitive position and market industry growth. Any industry that exceeds annual growth of 5 percent can be considered to have rapid growth. For firms located in Quadrant I of the Grand Strategy Matrix, they are in excellent strategic position for market development, market penetration, product development, forward, backward, and horizontal integration, and related diversification. Firms competing in Quadrant II have to assess their current approach to market completely. For these firms they belong to a growing industry that is leaving them behind due to their current approaches being ineffective. The only way for these firms to become competitive and stay ahead or alongside the competition they most evaluate why their current strategies are ineffective and how they can improve to create a competitive advantage for their respective company within their rapidly growing industry. If a firm determines that it is not possible to create a competitive advantage, they must evaluate if horizontal integration is possible or if they have no alternative but to divest or liquidate their respective firm. Firms from Quadrant III are in slow-growth industries and compete very poorly. The only hope for survival within these industries require complete restructure of the firms including extreme cost and asset liquidations otherwise these firms will face the fate of divesture and liquidation. Lastly, firms in Quadrant IV participate in a slow-growth market with strong competition. These firms are more likely to participate in joint ventures which require large levels of capital with limited need for internal growth. These business activities create to ability to pursue related or unrelated diversification into alternative markets and industries. Based on the criteria for a Grand Strategy Matrix, we have identified Starbucks Corporation to be located in Quadrant I. For market development, Starbucks Corporation has the financial capability and resources for expansion in their Europe Middle East and Africa (EMEA), China/Asia, and Channel divisions. To make this effort successful in the international market, Starbucks plans to partner with well established businesses to share in the cost and risk making their international ventures more profitable than ever before. This has been a hard push for the coffee giant because its foreign stores are not nearly as profitable as its domestic market which is why Starbucks has leaned so much on its domestic business since its inception. Of their EMEA, China/Asia, and Americas divisions, Starbucks is most profitable in the United Kingdom, Canada, and Japan. For market penetration, Starbucks also has its eye on expanding into countries such as India and Vietnam, where they have had no market before. In response to product development, Starbucks will continue to create new products such as pre-packaged instant coffee, coffee mugs, and travel mugs and make them available in major grocery supermarket chains and convenience stores across the United States and in their international markets. Starbucks will also continue to focus on reinvigorating their acquired secondary brand, Seattle’s Best Coffee. Since 2010, Starbucks has expanded distribution of the Seattle’s Best Coffee brand across the globe partnering with companies such as Burger King, Border’s, and most recently airline giant, Delta Airlines. With this expansion, Starbucks is looking to increase venues selling the SBC brand from 550 stores to over 30,000 stores. Internationally, Starbucks has been latching onto foreign product ideas and creating their own creative spin to boost foreign sales.14. Complete Quantitative Strategic Planning Matrix (QSPM) List advantages and disadvantages of THREE different Potential strategies In addition to the Grand Strategy Matrix, we implemented the Quantitative Strategic Planning Matrix (QSPM) to further evaluate the relative attractiveness of feasible alternative strategies using the data formulated in the Stage 1 analyses and their matching results from Stage 2. Stage 1 analyses consist of the EFE Matrix, IFE Matrix, and the Competitive Profile Matrix. Stage 2 analyses consist of the SWOT Matrix, SPACE Matrix, BCG Matrix, IE Matrix, and the Grand Strategy Matrix. This QSPM is quantitatively explained in the graphs below:With this QSPM we have determined two alternative strategies for Starbucks Corporation to evaluate to see if either is feasible to pursue are expanding Starbuck’s international divisions or bolstering their domestic presence in their dominant Americas division. From the opportunities we have identified that in relation to expanding their international divisions, China is a prime segment to penetrate in the current market and would be a very attractive strategy for Starbucks to further penetrate and expand within. In the rest of the international coffee market, Starbucks will continue to partner with established retailers in the grocery and bookstore industries to include their products and services at minimal cost with great potential for profit. Advancements in technology have the potential to refine industry and business processes for Starbucks. Refining industry and business processes could mean newer, better, more advanced processing equipment for harvesting the coffee beans in their South America farms. It could also mean more innovation in the information technology aspect of Starbucks, creating more efficient processes for their website, marketing, shipping, and distribution aspects of the Starbucks brand. Emerging and developing countries such as India in the EMEA division and Vietnam in the China/Asia Pacific division will be huge potential profit centers for Starbucks in the future. Starbucks has already begun expansion into the communist country of Vietnam by opening several locations in Ho Chi Minh City. This brand of western capitalism could cause a geopolitical shift in Asia with an already increasing demand for western brands such as Starbucks in China. As there is an increasing demand for Starbucks products in emerging and developing countries, the market price for the demand of coffee, a commodity, will increase as well. The international saturation of the coffee industry will level out the market price causing less fluctuation in the industry for supply and demand respectively. For threats concerning Starbucks, the United States, Starbucks’ largest market in their Americas division, is experiencing an epidemic of more health conscious people due to record-breaking trends of obesity, cancer, and diabetes. Because of the studies being made available to the public, more Americans are starting to diet and take better care of their personal health respectively. To adapt to this new trend, Starbucks has begun and will have to continue to create product lines that appeal to the more health conscious consumer or this could create a loss of market share for Starbucks. Franchising is creating a loss in market share for Starbucks as of late. Large fast food franchises such as McDonalds, Wendy’s, Burger King, and Jack N’ The Box have taken special attention to crafting a coffee menu comparable to Starbucks but at a more affordable price. While there are still consumers still brand loyal to Starbucks, this push to consume Starbucks’ market share could be a crippling problem in the future if consumers are willing to sacrifice quality for price or these large franchisers can find a way to create better quality coffee at a lower selling price and cost. With the age of the internet, business practices and ethical standards have come under much scrutiny causing many companies across all industries to become more transparent to appease investors when deciding on which companies to invest in. Investors and the American electorate have the right to know how the barons of business are conducting their affairs and how they are creating value for their consumers. Luckily, Starbucks has always excelled in this department. Starbucks has always represented a cleaner more proactive company to its consumers and investors. They have been very active in green initiatives since their inception and have maintained a reputation of being one of the most eco-friendly companies in their industry and in business as a whole. If Starbucks can continue this trend and report high ethical standards, they should be able to hedge this problem before it becomes out of hand. For strengths, Starbucks first and foremost has one of the most recognizable brands in the world. Brand loyalty is an enormous part of Starbucks and its market share. Consumers of Starbucks shop there primarily because they know no matter which location they visit whether it’s in Seattle, Washington or Hong Kong, China, the quality of Starbucks coffee and related products is on par at each location. Starbucks relies on brand loyalty and it has paid off. Starbucks prides itself on their employees and the atmosphere and benefits they provide to their employees. Starbucks operates under a lower than average turnover rate in respect to their employees which makes Starbucks a very attractive company in the respect of employment. Great benefits, higher pay, and a great corporate structure provide Starbucks with an unbelievable strength in their industry. Consumers have bought into the brand loyalty of Starbucks for many reasons. One reason in particular being the atmosphere of each Starbucks location. The atmosphere found at a Starbucks is of people gathered together and talking and making small talk and catching up on old times or the activities during the day. This atmosphere created by Starbucks is why brand loyalty is so strong. Starbucks pays very close attention to where it places its retail locations. Most of their locations are focused to high traffic areas of businesses, colleges and universities, and the downtown areas of major metropolitan cities. This provides the coffee giant with the optimal exposure to boost their profit centers. Starbucks puts an exorbitant amount of time into the research and development of its products. Each flavor of coffee bean used by the Starbucks brand is carefully tested and sampled for quality and taste. Starbucks also pays particular attention to who grows the coffee beans they use in each cup of coffee. For weaknesses, over aggressive growth strategies can in opening new stores take away from improving existing stores and product lines resulting in Starbucks losing their competitive advantage in the industry. Starbucks experienced a huge loss in earnings per share for a few years because of over expansion in the Americas which caused cannibalization between locations causing a loss in profits. Starbucks should have focused on how to improve on existing stores and how to expand internationally instead of saturating their U.S. market. After totaling all the scores for the QSPM, we noticed that expanding internationally or bolstering the Americas division almost bring the almost the same benefit but with different opportunities, threats, strengths, and weaknesses. That being said we still believe that Starbucks would be best served by expanding internationally into new markets and existing ones. By partnering with established foreign companies to drive down cost and bolster profit will be a huge benefit to Starbucks. 15). Long-Term Objectives; Past StrategiesStarbucks has two long term objectives. The first is to “maintain Starbucks standing as one of the most recognized and respected brands in the world.” The second is to “be the leading retailer and brand of coffee in each of our target markets by selling the finest quality coffee and related products, and by providing each customer a unique Starbucks Experience” (“Annual Reports”, 2013). To accomplish these objectives, Starbucks has previously implemented numerous strategies. One of the main strategies Starbucks has used to meet these objectives is its retail growth strategy, which focuses on continuing expansion of its retail presence across the globe. As of September 29th, 2013, Starbucks has 7,049 stores open in the United States. As Starbucks continues to move toward market saturation in the United States, global expansion opportunities have become increasingly important. The retail growth strategy has historically involved the construction of new Starbucks locations and remodeling of existing Starbucks locations. However, in emerging markets where a competitor already has a market presence, Starbucks has chosen to acquire the companies it would otherwise compete against, and converted their stores to Starbucks locations (“Annual Reports”, 2013). Another strategy Starbucks has implemented previously is focusing on the creation of new and innovative food and beverage products to meet consumer preferences. The roll out of new product lines has successfully created new revenue streams in a maturing coffee market, and helped Starbucks maintain its position in the marketplace amidst fierce competition. Examples of new product lines Starbucks has created beyond its core coffee menu is the addition of juices, baked goods, breakfast items, and teas. On top of creating new product lines, Starbucks is also focused on finding ways to deliver these products across a number of channels. In addition to the traditional Starbucks retail locations, previous strategies have resulted in food service partnerships that have landed Starbucks coffee on grocery store shelves and partnerships that have allowed Starbucks to serve hotels, businesses, and universities (“Annual Reports”, 2013). Another way that Starbucks has worked towards accomplishing its long term objectives is the implementation is its Global Responsibility strategy. Through the use of the Global Responsibility strategy, Starbucks has aimed to source coffee in the most ethical ways possible, reduce the environmental impact of its coffee harvesting and brewing, and serve the many diverse communities in which it operates. Starbucks has historically faced intense scrutiny over the living conditions of farmers that harvest the coffee it sells, with some critics claiming that farmers are unable to make a living and face slave-like labor conditions. Starbucks Global Responsibility strategy has helped reduce some of these issues and successfully protected the reputation of the brand (“Annual Reports”, 2013). An additional strategy Starbucks has implemented to meet its long term objectives are to create what it calls the “Starbucks Experience.” As part of this strategy, Starbucks has endeavored to provide clean, inviting retail spaces for customers, and a high quality customer service experience. An important part of this strategy is Starbucks hiring and retention strategy. Unlike most companies, which refer to those they employ as “employees” or “associates,” Starbucks refers to its employees as “partners.” The term partner is not purely symbolic; Starbucks offers equity options to both full-time and part-time employees. Additionally, unlike most brick-and-mortar retailers, Starbucks offers full health insurance benefit packages to part time and full time employees. The attractive benefits Starbucks has offered to employees has helped reinforce employee “buy-in”, increasing morale and assisting in the successful execution of the “Starbucks Experience” (“Annual Reports”, 2013).16). Recommend your Best Specific Strategy and explain how it will lead to achieving Long-Term Objectives.Successful implementation of past strategies has resulted in many years of strong business and profitability for Starbucks. As a result, many new strategy possibilities are not mutually exclusive; Starbucks can afford to implement strategies that do not conflict with one another simultaneously. With this reality in mind, there are two best strategies Starbucks can use to successfully achieve its long-term objectives. Starbucks Best Strategy Part A: Retail & Product Distribution GrowthStarbucks first best strategy is to ramp up expansion, by growth of new company-owned retail locations, especially in new and existing international markets, and by expanding alternative methods that Starbucks uses to deliver products to consumers outside of retail stores. On the retail side of its business, Starbucks currently has two main types of store locations. The first are traditional company owned and operated stores. The second are company licensed stores. From a customer experience standpoint, the traditional company-operated locations are the most advantageous for Starbucks. At these locations, all employees are employed by Starbucks, and Starbucks retains full control over the operations of these locations. However, there are many locations globally where access to the best retail space is difficult to access. At these locations, Starbucks has often chosen to create licensing agreements with retail business partners as a cost-effective method to access these areas. At company licensed stores, Starbucks shares space and operations with a business partner. Employees working at Starbucks licensed stores complete a training program that is very similar to the program employees that work for company-operated stores receive. However, because Starbucks does not own these locations, they do not retain full control of the operations and customer experience at these stores. Additionally, Starbucks derives significantly more revenue from company owned and operated stores. At the end of fiscal 2013, Starbucks had 10,194 company-operated stores, and 9,573 licensed stores. Even though the mix of stores is split fairly evenly, company-operated stores accounted for 79% of revenues, while licensed stores accounted for only 9%. With this revenue disparity in mind, Starbucks best strategy for retail growth is to take advantage of opportunities to open new company owned and operated Starbucks retail locations. While company licensed stores represent an opportunity to enter existing markets where access would otherwise be impossible, they do not provide anywhere near the same return on investment that company-operated stores provide (“Annual Reports”, 2013). Starbucks currently has three main global “segments” in which it operates. The first of these segments is the Americas, including the US, Canada, and Latin America. The second segment is what Starbucks refers to as its “EMEA” segment, which includes Europe, the Middle East, and Africa. The third segment is what Starbucks refers to as its “CAP” segment, which includes China and the Asia Pacific region. In addition to the aforementioned global segments in which Starbucks operates, Starbucks operates a fourth segment, which is comprised of retail stores owned by Starbucks but operating under a different brand name. This segment includes Starbucks Teavana, Seattle’s Best Coffee, and Evolution Fresh locations (“Annual Reports”, 2013). Company-Operated Store Data for the Year-Ended September 29, 2013Sep 30th, 2012Stores OpenedStores ClosedNet OpeningsStores Open as of Sep 29th, 2013Americas:US6,856231(38)1937,049Canada87469(3)66940Brazil5318(1)1770Puerto Rico191(1)-19Total Americas7,802319(43)2768,078EMEA:UK5936(50)(44)549Germany1579(9)-157France677(2)572Switzerland504(2)252Austria124-416Netherlands34-47Total EMEA88234(63)(29)853CAP:China408209(3)206614Thailand15522(3)19174Singapore8020(6)1494Australia231-124Total CAP666252(12)240906All Other Segments:Teavana-340(2)338338Seattle’s Best Coffee1211(8)315Evolution Fresh22-24Total All Other Segments14353(10)343357Total Company-Operated9,364958(128)83010,194As depicted in the table above, Starbucks has a significant number of company-operated stores throughout the globe. However, Starbucks’ current mix of retail locations is weighted heavily in the Americas segment. The Americas segment comprises approximately 80% of Starbucks company-owned retail locations. The majority of this 80% are stores located in the United States. Canada, while still significantly behind the United States market, has the second largest market presence of any other country in which Starbucks operates, with 940 company-owned stores. While there are still opportunities for growth in the United States, Starbucks has already established a strong retail presence throughout the United States. Continuing to expand aggressively in the United States is likely to produce diminishing returns. Opening additional Starbucks locations in close proximity to other Starbucks locations may risk cannibalizing existing business. Additionally, competition is intensely fierce in the United States, with competitors that also have an existing strong retail presence continuing to expand, as well (Sanburn, 2013). The EMEA segment of Starbucks global operations represents a significant growth opportunity, with a total of only company-operated 853 stores. One area of opportunity in the EMEA segment in particular is the United Kingdom. Consumer preferences in the United Kingdom coffee market are shifting towards high-end coffee like the variety that Starbucks produces. Starbucks recently moved its European headquarters to London, likely in an attempt to be closer to what is a key growth region. With only 549 stores in the United Kingdom, Starbucks should capitalize on the change in consumer preferences and aggressively drive growth in this part of the EMEA segment (Evans, 2014). The CAP segment of Starbucks global operations represents another significant growth opportunity, with a total of only company-operated 906 stores. One particular area that represents a tremendous opportunity for growth is China. China has historically been a tea-drinking country, but consumer demand for coffee is growing, especially among the young and more affluent demographic. Additionally, Starbucks has already invested in tea products to serve at its Teavana retail locations, which would likely be a perfect product line to serve alongside Starbucks more traditional coffee offerings. Increasing Chinese acceptance of foreign businesses and the massive consumer population in China make this a key area for Starbucks growth. Starbucks should capitalize on these opportunities and aggressively drive growth in this part of the CAP segment (Zhu, 2013). In addition to expansion of Starbucks retail stores presence, another opportunity for Starbucks to grow its business is through foodservice accounts and consumer packaged goods. Aside from Starbucks retail locations, Starbucks delivers its products to customers in a number of other ways, including hotels, grocery stores, warehouse chains, restaurants, airlines, schools and hospitals. In locations such as colleges or hospitals, Starbucks delivers products very much in the same way they do at Starbucks retail locations. In grocery stores and warehouse chains, Starbucks sells Starbucks and subsidiary branded consumer packaged goods. Some examples of Starbucks consumer packaged goods are Starbucks Ground Coffee and Starbucks K-Cups. Sales of consumer packaged goods generate significantly less revenue for Starbucks than products sold in company-operated retail stores. For example, a Grande coffee at a Starbucks retail location costs anywhere between $2 and $5, while a box of 16 single serving K-Cups at Wal-Mart sells for approximately $12. However, the popularity of home coffee makers, such as the Keurig Single Cup Brewing System, is increasing rapidly. As a result, it is important that Starbucks take advantage of product distribution using this channel. Ignoring the strong consumer preference for making coffee at home could harm the Starbucks brand name, and allow competitors to completely occupy this growing space in the market. Foodservice and consumer packaged goods sales accounted for approximately 11% of Starbucks total revenues in 2013. Starbucks should continue to capitalize on growth opportunities in this category by making more of their products available to customers through these channels, at more locations (“Annual Reports”, 2013). Starbucks Best Strategy Part B: Product ExpansionStarbucks second best strategy is to expand its product offerings, both in the coffee segment, as well as in entirely new categories. With a variety of hot and cold coffee offerings, sold in a seemingly endless variety of flavors, Starbucks has done a great job so far of catering to consumer preferences and delivering coffee products in just about any way consumers have a demand for. However, as the United States coffee market matures, Starbucks will face difficulty creating new and innovative product offerings in its coffee segment. With obesity in United States adults reaching nearly 35%, one very significant opportunity for Starbucks to expand further into the coffee market is to offer a low or no calorie version of their existing coffee products. While black coffee contains virtually no calories, the vast majority of Starbucks popular coffee products contain between 200 and 400 calories. Even Starbucks existing “skinny” product offerings, intended to be a low calorie alternative, often contain upwards of 200 calories. For consumers trying to lose weight, a single drink that contains 200 calories is not an acceptable option. It is possible to reduce the calories of Starbucks’ “skinny” options even further, but doing so requires more extensive customization, such as asking for a skinny menu item, made with nonfat milk, and without whipped cream, which can be tedious for consumers. Even after the additional customization, these products still contain 100 calories or more. Additionally, not all of Starbucks’ coffee products are available in a skinny configuration, which means consumers hoping for a lower calorie version of certain Starbucks drinks have no alternative whatsoever. As a result, if Starbucks could find a way to offer a calorie free version of its products that have a relatively good taste, it could achieve immediate growth in the coffee market. Starbucks should invest capital into developing low or no calorie products that require minimal customization from consumers to take advantage of this existing marketplace opportunity (“Adult Obesity Facts”, 2014).Another opportunity for Starbucks to grow business at new and existing locations is to start offering new product lines, outside of coffee. Starbucks has already expended considerable effort expanding their menu items beyond coffee products to baked goods, hot breakfast, sandwiches, salads, and yogurt. Additionally, Starbucks recently acquired Teavana, in an attempt to expand into the 40 billion dollar tea market. However, significant opportunities still remain. One such area that Starbucks is already exploring is the area of alcohol sales. Starbucks is testing sales of alcohol sales after 4 p.m. in select markets. Sales of Starbucks products peak in the morning and then see another surge in the afternoon hours. However, demand for existing products dips in the evening hours, where alcohol sales have an opportunity to provide significant additional revenues for Starbucks. Alongside the sale of alcohol products, Starbucks is serving upscale snack items on what it calls its “light bites” menu, which includes chocolate fondue, bacon-wrapped dates, and truffle macaroni and cheese. Starbucks is marketing its entry into the alcohol market as an evening event called “Starbucks Evenings,” which is intended to be a way for friends, dates, or adult family members to have a quiet evening over a glass of wine or beer at a Starbucks location. Alcohol products cost considerably more than coffee products, which could be a tremendous source of additional revenue for Starbucks going forward (“Starbucks Evenings”, 2013). The recommended strategy for retail growth and expanding ways to deliver products to consumers will require significant capital, but will also provide a significant return on investment. Supplementing this growth strategy with new product lines will help draw more customers to both new and existing Starbucks locations. These two strategies will work synergistically to increase Starbucks’ global profitability. In order to reach long term objectives, Starbucks needs to move quickly to implement the recommended strategies. In order to implement these strategies, Starbucks should open 2,500 new company-operated stores across the globe over the next 5 years. Additionally, Starbucks should continue to invest in new product lines to increase sales at new and existing locations. The cost to open a new Starbucks location is approximately $450,000. In addition to the cost required to open each new store, each store will bring with it associated operating expenses, such as salary, wages, utilities, insurance, and other overhead expenses. The approximate annual cost of these expenses, per store, is $217,000. Additionally, the cost of goods sold at these stores, including our recommendations for new products, will be approximately $360,000 per store. We arrived at these numbers by analyzing prior year trends and comparing the relationship between number of stores and related expenses. The costs to the suggested 2,500 stores over the next 5 years will cost approximately $1,125,000,000, which will need to be acquired through a combination of 30% stock and 70% debt, based on EPS-EBIT analysis. However, the store operating costs, as well as the cost of goods sold, will be covered by the revenue generated by each store. Therefore, Starbucks does not need to acquire capital for these costs up front. Please see the following table for a list of projected annual costs, based on the recommendations presented (Lawless, 2012). Year20142015201620172018Costs to Open New Stores (200 annually)$225,000,000$225,000,000$225,000,000$225,000,000$225,000,000Store Operating Costs$108,500,000$217,000,000$325,500,000$434,000,000$542,500,000Cost of Goods Sold$180,000,000$360,000,000$540,000,000$720,000,000$900,000,000Total$513,500,000$802,000,000$1,090,500,000$1,379,000,000$1,667,500,000The strategies we have presented here share similarities and differences with actual strategies implemented by the company. Starbucks currently plans to open approximately 5,000 stores globally in the next 5 years. However, Starbucks’ expansion plans include opening stores through a combination of constructing company-operated stores and working with retail partners to license stores, which generate significantly less revenue. Our recommendation is that Starbucks focus on growth of company-operated stores that will generate the most profitability in the long run, albeit at a slower pace (“Annual Reports”, 2013). Starbucks is also focused on continuing to expand their product offerings in locations other than their traditional retail stores, just as our recommendations state. This focus recently cost Starbucks some significant litigation costs when it ended an exclusive distribution contract with Kraft three years early. Under this contract, Kraft had exclusive rights to market the Starbucks ground coffee seen on many grocery stores today. However, Starbucks felt that Kraft was not meeting the performance requirements of the contract, which required Kraft to work closely with Starbucks on customer accounts and marketing decisions. Starbucks felt that Kraft was in breach of contract, and ended the partnership prematurely in order to gain more control of the distribution of its products. Kraft entered into arbitration proceedings to recover damages from the premature ending of the agreement. In a recent decision, an arbitrator sided with Kraft’s claims, and ordered Starbucks to pay Kraft $2,760,000,000 (“Annual Reports”, 2013). Starbucks is also focused on product expansion, through many of the product lines discussed above. However, Starbucks does not appear to be focused on significantly expanding product lines for consumers looking for low calorie options, which we disagree with. As obesity increases, especially in the United States, the potential marketplace for low calorie items increases each year. If Starbucks continues to marginalize this trend, it risks missing out on a significant amount of additional revenue (“Adult Obesity Facts”, 2014). 17). Specify how your recommendations can be implemented and what results you expect. Prepare forecasted ratios and projected financial statements; prepare a timetable for action. Based on Starbucks’ best strategy discussed above, we have created projected consolidated income statements and consolidated balance sheets for five years, and projected financial ratios for three years. We have included projected recent financial ratios for Starbucks’ main competitor, Dunkin’ Donuts, for comparison purposes. Please see this pro-forma information below.18 Part A). Recommend specific annual objectivesIn order to ensure the success of long term objectives, it is important to set smaller goals, in the form of annual objectives. Additionally, it is important to set policies that support long term objectives by motivating employees to embrace favorable behaviors and abandon unfavorable ones. Starbucks has two long term objectives. The first is to “maintain Starbucks standing as one of the most recognized and respected brands in the world.” The second is to “be the leading retailer and brand of coffee in each of our target markets by selling the finest quality coffee and related products, and by providing each customer a unique Starbucks Experience” (“Annual Reports”, 2013). To support Starbucks’ first long term objective, Starbucks should hire Gallop, Inc., or another respected consulting organization, to conduct public opinion polls about Starbucks’ standing as a recognized and respected company. Based on metrics provided by the consulting company, Starbucks’ annual objective should be to rank as well respected and well recognized with 90% with domestic customers. In emerging markets, Starbucks’ thresholds for these scores should be appropriate for the market share that has been established in those markets. Based on data provided by the public to the consulting firm, Starbucks management should actively search for ways to combat issues that are negatively influencing Starbucks standing as the most recognized and respected brandings in the world. To support Starbucks’ second long term objective, Starbucks should set annual objectives related to growth. Starbucks should set an annual objective of increasing revenues 10% per year in each global market in which Starbucks does business. This goal is feasible and attainable, based on historical trends and recommendations we have made regarding growth. Additionally, evaluating annual revenue increases for each global market (such as the CAP or EMEA markets) will help ensure that Starbucks is making strides to become the leading retailer and brand of coffee in each market in which it does business, and will prevent exceptional revenues in one market from covering for poor revenues in others (“Annual Reports”, 2013). To further support Starbucks’ second long term objective, Starbucks should set annual objectives regarding customer satisfaction. During each retail store transaction, customers should receive an invitation on their receipt to take a survey at home regarding the quality of Starbucks products, as well as the unique experience that customer received that day. To provide additional incentive for these customers, Starbucks should offer participating customers a code to receive a small coffee or other inexpensive menu item for free on their next visit. For customers purchasing Starbucks items at the grocery store or other foodservice segment, Starbucks should work with distributors to include a similar survey with an incentive that is appropriate for the channel through which the customer is buying the product. During this survey, customers that did not rate either the products they received or their overall experience with the highest possible ratings should be given the opportunity to explain what fell short of their expectations. Starbucks should set an annual objective to earn an average of 90% customer satisfaction with regards to both the quality of the products and the customer experience on the surveys collected. Additionally, an internal audit team should be assembled to review the customer satisfaction surveys for patterns. If there are specific locations or specific products that are consistently receiving poor ratings, this audit team should go out into the field to evaluate the responses customers are providing for validity. Based on their findings, this internal audit team should be required to submit a report to management to recommend further action to protect the Starbucks consumer experience. 18 Part B). Recommend policies.In order to support Starbucks’ first long term objective, Starbucks should create employee conduct and ethics policy. This policy should cover all manner of conduct, for all categories of employees, including customer facing employees, employees that work with vendors, management, and others. This policy should outline specific behaviors that are expected of employees in various types of situations. Additionally, the consequences for violating the policy should be clearly stated, which may include corrective action or termination, based on the severity of the violation. On top of the policy suggested, employees should be required to complete annual conduct and ethics policy refresher training to help highlight any changes in the policy and reinforce the conduct and ethics Starbucks expects of its employees. Creating this policy, and reinforcing the policy with annual training, will help ensure that Starbucks employees are acting in a manner consistent with the expectations of the company. Employee and supplier adherence to the policy will help Starbucks achieve its goal to be the most respected brand in the world. In addition to the policy created for Starbucks employees, Starbucks suppliers should be required to agree to a code of conduct and ethics, reflecting the values stated in the employee policy. Starbucks suppliers that are found to have violated this agreement should be made aware that violations may cause them to be in breach of contract. In order to support its second long term objective, Starbucks should create a number of policies outlining expected behaviors, especially for forward-facing employees that work with customers as part of their job descriptions. Examples of these policies are a policy regarding cell phone use at work, time and attendance policies, a policy handling customer complaints, and a policy for the safe and sanitary handling of food and beverage products. These policies will help ensure that Starbucks customers receive the unique customer experience that Starbucks’ management has outlined in the second long term objective. 19). Recommend procedures for strategy evaluation and review.When management creates potential strategies, they are created based on research, analysis, and careful thought and discussion. However, there is no amount of data analysis for industry expertise that can correctly predict the future, 100% of the time. The most carefully constructed strategies still have the potential to fail. As a result, it is important to outline procedures for strategy evaluation and review to ensure that proposed strategies are having the desired effect on the company’s profitability. If not, the strategies must be changed or replaced quickly to prevent significantly damaging the business. There are several evaluation methods we propose to evaluate the strategies we have suggested. Based on recommended strategy for growth, the first strategy evaluation we propose is an evaluation of store performance metrics, such as sales revenues and gross profit. Management should be provided daily, weekly, monthly, and annual reports on actual store performance compared to company expectations. If there are specific stores that are performing poorly compared to the rest of the region in which they are located, the company management should contact the store management to develop an action plan to get performance numbers within acceptable performance parameters. If the store management is unable to rectify the issue, Starbucks should send an internal audit team to determine the cause of the store’s poor performance. Based on their findings, management should take action, including replacing store personnel, providing additional training, adjusting the marketing budget in the area, or, if necessary, even closing the store. Additionally, if there is a specific store that is consistently exceeding expectations, the management should work with that store to evaluate what that store is doing differently to enable them to perform at a high level. If the cause of the high performance is behavior based, training materials and policies should be adjusted to encourage other stores to adopt these same behaviors, where possible.In addition to individual store performance, we propose that Starbucks evaluate regional performance metrics. Starbucks’ formula for success in the United States and Canada may not necessarily produce desired results all over the globe. Company stores should be broken down from their larger markets, such as the Americas, CAP, or EMEA markets, and into more localized regions. Once broken down into these regions, management should evaluate the performance of each region on a daily, weekly, monthly, and annual basis. It is critical to evaluate regional performance, because poor performance across an entire region can indicate a very serious problem that, if not addressed quickly, could seriously damage the company’s profitability. If a region is consistently underperforming, management should evaluate the cause of the underperformance. Based on their findings, management may need to make major changes to a regional marketing budget or product availability. If the people in a specific region simply do not enjoy Starbucks products, and management is unable to make changes to suit customer preferences in the area, it may require a modification or cancellation of the expansion in that particular area. It is critical that new store construction should be halted in areas where regional performance is consistently performing below company expectations. If Starbucks continues to open new stores in a region where profitability is not sustainable, then company profitability could be damaged even further (“Annual Reports”, 2013). To evaluate our strategy for product expansion, both at the retail store and foodservice levels, management should evaluate the performance of individual product lines. Additionally, Starbucks should hire a consulting group to poll public opinion about the perception of new products being produced. If certain product lines or individual products are underperforming, management should evaluate the cause. If the cause of the underperformance is the taste of the product, management should use customer feedback regarding taste to make changes to the formula or ingredients. If the cause of the underperformance is a lack of consumer awareness, Starbucks should increase the marketing budget committed to the underperforming product lines, as necessary. In some situations, it is possible that changes to salvage the underperforming products may not be feasible. For example, it may be determined that the only way to change the taste of a product to fit consumer preferences is to drastically increase the cost of the product. In situations where necessary changes to a product line are either impossible or not cost-effective, the product lines should be eliminated. By contrast, if there are certain new products that are performing exceptionally well, it may be prudent for management to explore the option of expanding that particular product line to include additional products to capitalize on the success that the high performing product is enjoying.20). Specify Contingency Plan and detail all concerns in Step 16 for this contingency plan. Starbucks coffee, as well as the Starbucks experience, is considered by many as an “affordable luxury.” Starbucks charges higher prices to deliver premium prices and an upscale experience at its retail locations. In an economic climate where consumers have money available for discretionary spending, this business model has served Starbucks and its shareholders extremely well. However, Starbucks’ management admits that its business model is very much at the mercy of the economy. In 2008, at the height of the United States economic recession, as consumer spending decreased, Starbucks was forced to close 600 stores and lay off nearly 12,000 employees. Even though Starbucks has largely recovered from the recession, it is has been opening stores at a pace of about 300 stores per year since that time, as opposed to the 1,300 stores it was opening per year prior to 2008. If economic conditions worsen, tightened discretionary spending budgets for consumers will significantly reduce sales revenue, making a growth strategy inappropriate. Similarly, trying to develop and market brand new product lines that do not already have a strong consumer following would be inappropriate during an economic downturn. Lastly, if global factors cause construction and real estate costs to exceed what Starbucks’ management feels is reasonable to remain profitable and provide a return to its shareholders, then a global expansion strategy becomes inappropriate. If circumstances arise that prevent a growth strategy or product development strategy to become inappropriate, Starbucks needs a contingency plan to operate effectively under the altered circumstances (Evans, 2014). In the case of a prolonged economic recession, Starbucks’ best strategy is still technically one of growth, but it will need to achieve it in a very different way. One of the primary reasons that Starbucks’ competitors, such as Dunkin’ Donuts, McDonalds, and Nestle, have continued to compete with Starbucks is the price of their products. Starbucks charges a premium over its competitors because of its top quality products and superior customer experience. However, the price advantage that Starbucks’ competitors have makes them less susceptible to harm from a reduction in consumer spending. If consumers’ discretionary spending drops, then Starbucks must fight its competitors to capture some of the market share they possess in existing markets. As previously stated, Starbucks commands significant market share among more affluent customers; its average customer makes $90,000 a year. Dunkin’ Donuts and McDonalds command significant market share among customers with lower incomes. In order to do so, Starbucks is going to have to fight its competitors directly on price. The best way for Starbucks to go about doing this is to pick a few popular menu items and reduce their price to a price similar to what its competitors offer for similar products. By doing so, Starbucks will be able to offer higher quality products than its competitors for similar prices. Starbucks is not known for having a low price menu, so it will need to invest considerably in marketing the new changes. As part of the marketing the lower cost items, Starbucks should highlight the advantage its products have in quality over competitors’ similar product offerings. This drastic change in strategy will lead to a significant reduction in gross margin per item sold. However, if Starbucks is successful in capturing market share from its competitors, it will be able to make up some of the difference by an increase in total sales revenue. From a shareholder prospective, this change is certainly not ideal. However, the alternative to this strategy is reminiscent of 2008; plummeting sales resulting in closing stores and employee layoffs, which is certainly more damaging to shareholder value than what we are proposing (O’Connor, 2013). Currently, Starbucks’ cost of goods sold is approximately 43% of sales revenue generated by those products. Additionally, its gross margin percentage is approximately 20%. Starbucks’ prices are approximately 15-25% higher than its competitors, depending on the item. We believe that a 15% reduction in price of an assortment of Starbucks popular menu items is sufficient to acquire a significant amount of the market share its competitors possess. This change will reduce Starbucks gross margin percentage from approximately 20% to 11%. However, we believe that this price reduction will increase total sales by 30%, resulting in a net 9.5% increase in total sales revenue dollars. Aside from an adjustment to the marketing budget to advertise the new lower cost pricing options, no additional expenditures are necessary to implement this alternative strategy. Please see the table below for an estimate of how the proposed changes will impact profitability from operations (“Annual Reports”, 2013).Effect of Proposed 15% Price Reduction on Operating ProfitBefore ChangesAfter Changes% ChangeTotal Sales Revenue14,892,200,000$16,455,881,0009.5% increaseTotal Expenses12,684,900,000$14,599,590,00013.1% increaseGross Profit2,207,300,0001,856,291,00015.9% reductionWorks Cited"Annual Reports." Investor Overview. Starbucks Corporation, 31 Dec. 2013. Web. 18 Apr. 2014. < Obesity Facts. (2014, March 28).?Centers for Disease Control and Prevention. Retrieved from , Melissa. "Starbucks Has a New Growth Strategy — More Revenue with Lower Costs."?Business & Technology. The Seattle Times Company, 15 May 2010. Web. 21 Apr. 2014. <;"Can Dunkin' Donuts Rewards Compete with Starbucks?" . N.p., n.d. Web. 06 May 2014. , F. (2013). Strategic management concepts: a competitive advantage approach. (14th Ed.). Boston: Pearson.Evans, P. (2014, April 16). Starbucks to Move European Headquarters to U.K. The Wall Street Journal. Retrieved from , J. (2012, December 5). Starbucks to open 1,500 more cafes in U.S. Retrieved May 7, 2014, from 'Connor, C. (2013, June 24). How Starbucks Will Profit From Posting Its Calorie Counts.?Forbes. Retrieved May 7, 2014, from "Opportunities and Threats - Starbucks and Dunkin Donuts." Opportunities and Threats - Starbucks and Dunkin Donuts. N.p., n.d. Web. 20 Apr. 2014. <, J. (2013, June 26). Don’t Call Dunkin' Donuts a Donut Company | .?Business Money Don’t Call Dunkin Donuts a Donut Company Comments. Retrieved from . (2013, November 5). Retrieved from “Starbucks Competitive Advantage: A Discussion." HubPages. N.p., n.d. Web. 05 May 2014. Evenings. (n.d.).?Starbucks Coffee Company. Retrieved May 7, 2014, from , David. "Starbucks SWOT Analysis." Coffee Marketing:. N.p., 22 Sept. 2011. Web. 20 Apr. 2014. < analysis of Starbucks. (2013, February 25). Retrieved from Zhu, W. (2013, July 29). Starbucks sees big growth in China.?CNNMoney. Retrieved from ................
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