Управление международными рекламными кампаниями

    There are also less important needs that if required can sometimes bring about potential success. These needs are often apart of the whole experience and include things like music. Starbucks meets the need of consumers by another acquirement, this time it's the music company, Hear Music. The connection here is that customers can purchase music through Starbucks as a result of the agreement with Hear Music. Throughout the world, many cafй's have some type of music playing the background and this is a key identification feature that further expands the experience. Hear Music provides Starbucks with a number of songs that are played throughout the day and this is quite an attraction for customers as proved by their constant questioning of what song is playing. Further, Hear Music provides Starbucks with a number of compilation albums as well as favorites in order to make customers feel more at home. 

 

2. Starbucks operation analysis.

 

    The important question is, if Starbucks’ growth rate will continue within next years because on the one hand critics say that Starbucks grows too fast and is loosing the focus while on the other hand some critics compare Starbucks’ coffee with Mc Donald’s´ hamburger and believe that they will grow up more and more as the dominant player on this market .

 

1. SWOT-analysis

 

    With the help of the SWOT analysis the situation of Starbucks can be analyzed after finding out, why people pay more money for a coffee, than in other coffeehouses.

    Strengths and Weaknesses

    Operations 

    Starbucks specialty operations strive to develop the Starbucks brand outside the Company-operated retail store environment though a number of channels. By establishing relationships with well-known third parties that share their values and commitment to quality, Starbucks is able to reach customers where they work, shop, and travel. These relationships take various forms, including grocery channel licensing agreements, warehouse club accounts, international retail store licensing agreements, direct-to-consumer market channels, joint ventures and more. Although Starbucks does not usually outsource operational control of its retail stores in North America, in situations where another company can provide improved access to desirable retail space, the Company licenses its operations. Starbucks has a long-term licensing agreement with Kraft Foods, Inc. to market and distribute Starbucks whole bean and ground coffees in the grocery channel in the United States. Kraft manages all distribution, marketing, advertising and promotions for this particular product. The Company has two non-retail domestic 50-50 joint ventures. This includes one with PepsiCo, Inc. who develops and distributes ready-to-drink coffee-based products. Also, they have a joint venture with Dreyer's Grand Ice Cream, Inc. to develop and distribute Starbucks premium coffee ice creams. Starbucks also makes their coffee and coffee-related products available via mail order and online. For the most part, Starbucks is vertically integrated, controlling its coffee sourcing, roasting, and distribution through its retail stores. 

    Marketing and Sales 

    One of the main strengths of Starbucks over the years has been their tireless effort to make their product an uplifting part of people's daily lives. Starbucks' strategy for expanding its specialty operations is to reach customers where they work, travel, shop, and dine by establishing relationships with prominent third parties who share their values and commitment to quality. Starbucks has carried out their strategy by moving distribution into grocery stores, convenience stores, department stores, movie theatres, businesses, airports, schools, and homes. Starbucks has shown to use less of traditional advertising; instead relying more on its image advertising, such as movie and television placement, in order to promote the success of the business. 

    Score: +2 

    Customer Service 

    One of Starbuck's primary objectives is to provide a superior level of customer service. One of their guiding principles in their mission statement states, "Develop enthusiastically satisfied customers all of the time". In building customer loyalty, not only does Starbucks offer high levels of customer service, but they also strive to educate customers about coffee quality. There is an information section in each store that provides customers a good resource for becoming more knowledgeable about the world of coffee. Starbucks also publishes and distributes a mail order catalog and a catalog of business gifts that offer coffees, certain food items and select coffee-making equipment and accessories. The company has several other initiatives to enhance the customers' experience at Starbucks retail stores. For example, the Company is currently in the process of implementing wireless Internet access in its stores. Starbucks does provide a "comment card" on their web site that allows customers to give constant feedback about their experiences or concerns they may have. This is used as a means of improving the business where necessary. 

    Score: +2 

    Procurement  
Starbucks depends upon both its outside brokers and its direct contact with exporters for the supply of green coffee. Coffee sought by Starbucks tends to trade on a negotiated basis, usually quite a bit higher in price compared to their competitors. Supply and price can be affected by many factors in the producing countries, such as weather, political, and economic conditions. To reduce the risks associated with the unpredictability of coffee price and supply, Starbucks enters into long-term fixed price contracts with its suppliers to ensure an adequate supply of quality green coffee over extended periods of time. Starbucks is confident with such relationships and believes the risks of non-delivery on such purchase commitments are remote. Starbucks believes how they choose partners is critical to their success and have listed a few criteria:

• Shared values and corporate culture
• Strong multi-unit retail/restaurant experience
• Dedicated human resources
• Commitment to customer service
• Quality image
• Creative ability, local knowledge and brand-building skills
• Strong financial resources

    During the past year Starbucks has been developing a new set of coffee sourcing guidelines. These sourcing guidelines are a flexible point system that rewards performance in sustainable categories with financial incentives. Ultimately, those who qualify for 100 points will be granted preferred supplier status with the Company's coffee buyers. 

    Score: +1 

    Technological Development 

    Starbucks is continuously searching for ways to better a customers' experience. With the introduction of the Starbucks Card for example, the Company has created the opportunity to improve customer service, shorten lines and make a customer's visit at Starbucks quicker and more convenient. 

    Score: +1 

    Human Resource Management 

    Starbucks realizes that one of their most valuable resources are their employees. The first guiding principle in their mission statement even addresses the Company's belief towards employees: "Provide a great work environment and treat each other with respect and dignity". Management understands that their employees play a major role in the growth of the company. All employees at Starbucks are referred to as "partners", no matter what job position they occupy. The Company's cultural values gives employees a sense of meaning to their work even if it is just pouring a cup of coffee. Each partner (even part-time employees) is eligible to receive health care, participate in the Bean Stock program, and get a free pound of coffee each week. Under the Bean Stock program, employees are offered stock below the fair market value several times a year. Starbucks' employees also participate in a 401(k) profit sharing plan. Starbucks believes they are in the coffee business as well as the "people development" business. Each employee is required to complete an extensive training program that includes product expertise, a commitment to customer service, and well-developed interpersonal skills. Professional coffee bartenders for Starbucks complete up to 24 hours of training before entering their assigned store. This training gives them knowledge to answer any questions about coffee or the Company, and the knowledge to arrange sample tastings and demonstrations with any of the equipment in the store. While the industry turnover rate is about 400 percent, Starbucks maintains a turnover rate of only 50 percent. Due to this low turnover, Starbucks has lowered their training time and costs. Additionally, Starbucks is proud to note that it was again rated as on of the best companies to work for by Fortune magazine. 

    Score: +2 

    Firm Infrastructure

    Starbucks has proved to be a leader in identifying market trends and positioning themselves accordingly. For example, before the recent economic slowdown, management noticed a decrease in traffic. Rather than pull back from their expansion strategy, Starbucks launched a series of small adjustments to improve efficiency, and continue with their plans. 

    Starbucks strives to offer an environmentally safe product, as it believes that the welfare of people, plant and product are linked. Starbucks prides itself on being a "good citizen" locally and in the international scene. They make significant contributions to local charities that focus on children, the environment, the homeless, and AIDS research/support. Stated in the Starbucks Environmental Mission Statement; "Starbucks is committed to a role of environmental leadership in all facets of our business. We fulfill this mission by a commitment to:

• Understanding of environmental issues and sharing information with our partners
• Developing innovative and flexible solutions to bring about change
• Striving to buy, sell and use environmentally friendly products
• Recognizing that fiscal responsibility is essential to our environmental future
• Instilling environmental responsibility as a corporate value
• Measuring and monitoring our progress for each project
• Encouraging all partners to share in our mission"

    Score: +3 

    Production-Operations

    Starbucks stores are typically clustered in high-traffic, high-visibility location in each market. Stores vary in size, with an average of approximately 1,500 square feet. Since the Company is able to vary the size of its stores, Starbucks stores are located in a variety of settings, including office buildings, downtown and suburban retail centers, airport terminals, and kiosks located usually in building lobbies. Whatever location the Company chooses to be in, its focus will be on attracting high pedestrian street traffic. The product mix in each store varies depending on the size and location of the store. Starbucks takes great care in picking the right location. Analyst Mitchell Speiser says that, "while chains like McDonalds and Wendy's routinely shutter 50 to 100 restaurants a year, Starbucks has closed only a small number of outlets in its 30-year history". Starbucks has focused on improving efficiency and increasing its gross profit margins. Milk, for example, is the second most expensive product after coffee beans. Where Starbucks once had 65 different milk suppliers in the U.S., they now have fewer than 25. Without a doubt, this efficiency gain has saved them a lot of money. 

    Score: +3 

    Marketing

    Starbucks is the leading specialty coffee retailer in the nation, with over 5,000 locations in 22 international markets. Starbucks positions their products on a relatively simple plane. They focus on quality and experience, rather than price. A comparison of specialty drinks with its competitors reveals very minor differences. Starbucks' image is one of the key elements to their success. The company has realized that people don't only come for the coffee; they come for the atmosphere. People socialize, read, study, or just enjoy the music while drinking their coffee. Knowing this, Coffee shops try to make their stores unique in some way or another that will create an appealing atmosphere. Starbucks has less of a distinct setting for their locations; instead, they focus on having plenty of comfortable seating so that people feel welcome to stay longer than they might have planned. Starbucks also positions each store individually according to the specific location it is in. This flexibility has attributed to the great success of the Company in the past decade. Another important part of Starbucks' positioning is that they are environmentally friendly. While other retailers position themselves in similar ways, no one focuses to the extent that Starbucks has. Consumers seem to respond to environmentally friendly companies who seem to truly care about the future of the world. 

    Advertising strategies used by Starbucks has also been a key success factor. Starbucks has found more success advertising on a local level rather than to the nation as a whole. The Company advertises a lot through print mediums, as Starbucks' target market tends to be educated people who do more reading than the average person. 

    Score: +3 

    Research and Development 

    Starbucks's organizational culture is one of innovation and creativity. This is evident through the continuous developments of new and exciting products. Whether it's the new 4-cup thermal coffeemaker recently introduced to the market, or the Starbucks 'DoubleShot' Espresso beverage, Starbucks seems to be the market leader when it comes to new products and ideas. In November 2001, the Company introduced the 'Starbucks Card', which is a stored-value card that can be loaded and re-loaded in denominations up to $500. The Starbucks Card is a wonderful convenience tool for customers that can serve as great gifts, and reduces time spent at the cash register. This contributes to the overall enhancement of the customer's experience. Starbucks is extremely pleased with the ongoing positive customer response to the Starbucks Card. It is through the introduction of new products and the development of new distribution channels that Starbucks focuses on their Company's goal of becoming the most recognized and respected brand in the world. Starbucks is one of the fastest growing companies in the U.S.; from just 17 coffee shops in 1987 to over 5,000 today. Future plans include opening at least 1,200 new stores during 2002 and by 2005, to have over 10,000 stores worldwide. 

    Score: +2 

    Financial and Accounting 

    Financially, Starbucks has had solid earnings and return. Despite still following a 'fast-growth' strategy, the Company has managed to continue healthy operations while generating enough public funds to finance store expansion. For the first quarter of fiscal 2002, Starbucks reported record revenues and earnings. These consolidated net revenues are an increase of 21 percent to $805 million from $667 million for the first quarter of fiscal 2001. Starbucks expects full-year revenues to grow approximately 20 percent in fiscal 2002. Starbucks ended last year with more than $300 million in cash and virtually no debt. 

    Score: +2 

    Management 

    Starbucks firmly believes that their employees are one of their important assets and that it's through their high quality workforce, that they are able to maintain a competitive advantage. They have successfully built a nation wide Retail Company by creating pride in the labor force produced through an empowering corporate culture; exceptional employee benefits, and employee stock ownership programs. Employees are empowered by management to make decisions without having to first report to management, and are encouraged to think for themselves as an entity of the business. The culture towards employees can be described as 'relaxed' and supportive. Starbucks has avoided a hierarchical organization structure and has no formal organizational chart. It is evident that employees at Starbucks share common goals. An employee was quoted as saying; "We all have this common belief in the product we sell". 

    Score: +3 

    Information Systems-Information Technology 

    Starbucks deploys Blue Martini's order management system to its retailers and channel partners. The system provides Starbucks with the ability to centrally manage and deliver contract-based products and pricing in different languages for its global distribution. 

    Score: +1 

    Summary of Scores 

    Overall, Starbucks seems to be a strong, well-established, and well-rounded company. As the industry leader, they have built a strong brand image that has helped them to gain a considerable greater share of the market in comparison to their competitors. Management has shown to have the ability to foresee market trends and changes in consumer behaviors. Management has also created a corporate culture that promotes high productivity levels by their competent employees. Financially, Starbucks is stable despite its rapid and continuous growth strategies. The Company has done well to establish reliable, long-term relationships with suppliers. For the most part, as individual scores indicate, Starbucks is fairly to very capable in most areas of its business. In areas where they do perhaps lack expertise, skills, or competencies, they have formed strategic alliances with companies that can be more efficient and effective (table 2.1). 

    Table 2.1

    Scores

Value Chain Activities     +13 of a total +21     Internal Audit     +13 of a total +18     Total     +26 of a total +39

    Stock Prices 

    Chart One: Starbucks vs. Industry 

    This Chart compares Starbuck's stock to the Special Eateries Industry average. As depicted by the graph, Starbuck's has been a defining force in the industry, as the industry average follows the exact same pattern/line, just slightly below Starbucks, for the past five years. 

    Chart Two: Starbucks vs. Competition 

    This Chart Compares Starbucks with three major competitors in the market. 

    NWCI - New World Coffee Inc. 

    DDRX - Diedrich Coffee, Inc. 

    GMRC - Green Manhattan Coffee Inc. 

    Because of the diversity of Starbucks competition, in the past three years the stocks do not seem to be a parallel population to each other. In specific, Green Manhattan stock peaked the highest of the four around one year ago. Starbucks Corporation stock has been on a steady and consistent rise for the past five years, and Diedrich Coffee, Inc., possibly because of the increased market share competition put on by Starbucks Corporation and Green Manhattan Inc, has seen a steady drop in stock prices over the past two years. 

    Chart Three: Starbucks vs. Dow Jones 

    This graph charts Starbucks Corporation versus the Dow Jones Industrial Average over the past five years. We chose this average because we feel it best represents the restaurant industry that Starbucks is a member. This is reflected by some of the similar upward and downward movements of both lines in the graph. Overall Starbucks Corporation stock has been consistently higher than the Dow Jones, and has grown in price at a higher rate than the average. 

    Opportunities and Threats 

    Economic Forces

    Economic factors are an important aspects that concern the nature and direction of the economy in which a firm operates. Since the relative affluence of various market segments will affect the consumption patterns, companies must take this into consideration when planning its strategy. In periods of normal price variation, the demand for coffee is price inelastic. However, when coffee prices show big increases, consumers tend to reduce their consumption commensurately. 

    The Company's net revenues increased from $1.3 billion in fiscal 1998 to $1.7 billion in fiscal 1999, due primarily to the Company's store expansion program and comparable store sales increases. As part of its expansion strategy of clustering stores in existing markets, Starbucks has experienced a certain level of cannibalization of existing stores by new stores as store concentration has increased. However, management believes such cannibalization has been justified by the incremental sales and return on new store investments. This cannibalization, as well as increased competition and other factors, may continue to put downward pressure on the Company's comparable store sales growth in future periods.

    Score -1 

    Sociological Forces