STARBUCKS - STRATEGIC PLAN

MISSION:
“To inspire and nurture the human spirit
- one person, one cup and one
neighborhood at a time.”
CORE VALUES:
VISION:
“Treat people like family, and they will
be loyal and give their all.”

Creating a culture of inclusion - Starbucks values equity, diversity, and inclusion. In

order to make sure that everyone is welcomed, the organization is cultivating a culture
of warmth and belonging.
Acting with courage - Starbucks is known for finding new ways to grow. The
company always seeks to challenge the status quo.
Being present - Starbucks is constantly available and prepared to assist in the search
for solutions, whether they pertain to transparency, social dignity, or environmental
problems.
Delivering our very best - Starbucks continues to innovate and seeking out new
technology and methods to enhance the quality of its coffee, customer experiences, and
services.
SWOT ANALYSIS:
STRENGTHS: WEAKNESSES:

Strong Brand Recognition Major dependence on single product

Innovative Business Model
Commitment to Sustainability
Product Diversification
Strong Financial Performance
Strong Digital Presence
Strong Customer Loyalty
Global Presence
OPPORTUNITIES:
line “coffee”
Intense competition in the coffee
industry
Limited international expansion in some
markets
Potential negative impact of commodity
price fluctuation
Dependence on a large number of
company-operated stores
High pricing compared to some
competitors
Limited menu options for customers
with dietary restrictions or preferences
THREATS:

Expanding into new markets Competition from other coffee chains

 Partnerships and collaborations with
other companies or brands
Adopt Price Differentiation
Introducing new products
Coffee Subscription
Expanding the Starbucks Rewards
loyalty program and other customer
loyalty initiatives
Acquiring complementary businesses or
brands
and independent coffee shops
Changes in consumer preferences or
trends
Economic downturns or market
instability
Supply chain disruptions or sourcing
challenges
Labor disputes or employee turnover
Rising Real Estate Cost

GOALS & OBJECTIVES:

Establish Starbucks as premier purveyor of the finest coffee in the world - global
expansion
Maintain uncompromising principles as we grow - apply high standards to purchasing,
roasting and fresh delivery of our coffee
Embrace diversity as an essential component in the way we do business - recruit
diverse workforce to understand customers of different cultural background
Develop enthusiastically satisfied customers all of the time - Provide better customer
service, increase customer satisfaction & loyalty
Contribute positively to our communities and our environment - CSR & sustainability
Recognize that profitability is essential to our future success - increase profitability

PROJECTS:

Reinvention Plan: Starbucks unveils roadmap for accelerated EPS Growth over the
next three years, underpinned by enhanced comparable store sales growth, increased
store count growth, continued margin expansion, and disciplined capital allocation
(from 2022 to 2025)
Starbucks plans to resume its share buyback program reinstituting a healthy return of
shareholder capital, yielding an annual EPS benefit of approximately 1%, net of
incremental interest, beginning in fiscal year 2024
Starbucks expects to continue robust store development in China, with net unit growth
of approximately 13% annually, as sales are expected to nearly double over the next
three years, while store count is expected to grow by 50%, reaching 9,000 stores
Starbucks plans to add more than 100 drive-thru stores in the China this year, bringing
its tally to more than 700 regionally
Globally, Starbucks expects to approach 45,000 stores by the end of 2025, and
approximately 55,000 stores by 2030
Starbucks doubles down on Asia Pacific with biggest expansion in five years.
Starbucks will open more than 400 stores across Asia Pacific in 2023. The coffee chain
plans to add the new outlets in India, Indonesia, Thailand, Malaysia, Laos and the
Philippines, where it aims to expand beyond major cities
Starbucks has identified a number of near-term solutions that will be implemented in
fiscal 2023 to ensure a thriving partner experience: Wage and recognition innovation,
New well-being benefits, Personalized career mobility & Investments in store
managers
Invest in purpose-built store concepts: invest an incremental $450M in the existing U.S.
store base in fiscal year 2023 with continued investments in fiscal years 2024 & 2025
Starbucks plans to add 2,000 new net stores in the U.S. by 2025, boosting its reach
across cafes, pick-up, drive-thru and delivery
Deliver beverage innovation with big operational changes:
To improve partner and customer experiences, Starbucks has developed the
Siren System, a proprietary new equipment innovation designed to meet the
growing demand for customization of hot and cold beverages and warm foods
As part of the Siren System, Starbucks has redesigned its cold beverage station,
which significantly reduces the time and number of steps to make cold
beverages
Starbucks is developing a new way of extracting cold coffee and espresso with
the Cold Pressed Cold Brew system. This new, proprietary technology delivers
cold press coffee in a matter of seconds and in fewer than four steps, a step-
change improvement when compared to today’s cold brew which is steeped for
20 hours and takes more than 20 steps to make
Starbucks is also elevating the quality and craft of hot brewed coffee with the
launch of Clover Vertica. Using proprietary Clover technology, Clover Vertica
offers every customer a freshly ground, freshly brewed cup of hot coffee in just
30 seconds
Expanding effortless digital convenience: customers are increasingly prioritizing the
effortless, experiential convenience and personalization enabled by Starbucks Rewards,
Mobile Order & Pay, and Starbucks Delivers
CSR Initiatives:
Support Local Communities (community stores program to provide education
& training to combat poverty, open community stores and FoodShare food
donation program)
Educate and Empowering Workers (Starbucks College Achievement Plan for
employees, invest in staff training, coffee tasting courses and course enrolments
in Starbucks Coffee Academy)
Gender Equality and Minorities (focuses on Diversity)
Sustainability Initiatives:
Contribute to the sustainability of coffee growers and helping environment
conservation
 Energy & Water Consumption (implement Greener Store format, power stores
using renewable energy & water conservation)
Waste Reduction and Recycling (turn spent coffee grounds into compost and
feed for cows & reduce waste send to landfill)
Carbon Reduction
Expanding plant-based menu options
Sustainable Sourcing (company has 10 Farmer Support Centres in Latin
America, Asia and Africa + Double the Global Farmer Fund to USD 100
million)
Shifting away from single-use to reusable packaging
Investing in regenerative agriculture, reforestation, forest conservation

KEY PERFORMANCE INDICATORS (with TARGETS)

Market Share (Target: 10% increase) Employee Excellence (Target: 5%

increase)
Yield Rate Growth (Target: 5% increase)
Annual Performance Appraisal for
Revenue Growth (Target: 10% to 12%
employees via 360 - degree feedback
increase)
process (compensation & promotions
Non-GAAP EPS Growth (Target: 15% for employee who scored above 70)
to 20% increase)
Employee Training Hours (Target: 5%
Operating Margin Growth (Target: 5% increase)
increase)
Website Traffic Assessment (Target:
Customer Satisfaction (Target: attain 10% increase in visitors)
90%)
Mob Application Assessment (Target:
Audience Demographic Assessment 10% increase in active users)
(Target a 5% increase in audience between
Loyalty Program Assessment (Target:
ages 25 and 50.)
10% increase in members)
New Store Openings (Target: 7%
CSR Initiatives (Target: 5% increase)
increase)
Environmental Initiatives (Target: 10%
Existing Store Sales Growth (Target: 7%
increase)
to 9% increase)
Competitor Assessment (Competitor
Scan to be updated on quarterly basis)
RECOMMENDATIONS:

To upheld growth, Starbucks should focus on Market Expansion, Franchising, Strategic

Acquisitions, Product improvement and new product development Joint Ventures.
Market Expansion: Despite the fierce competition, Starbucks should think about
expanding its market to increase revenues. The company should concentrate on the
developing and frontier markets in Asia and Africa. Consumer spending power has
significantly increased as a result of economic expansion in emerging and frontier
 markets. Due to its prospective client base, entering these markets will provide
Starbucks the chance to increase its profits.
Franchising strategy: Starbucks should think about using the franchising approach
when entering foreign markets. With this method, it will be possible to keep the same
level of product quality in the new markets. Thus, the company will be able to maintain
the caliber of its products in the new marketplaces.
Strategic Acquisition: Starbucks should think about acquiring small and medium-
sized businesses in order to increase its dominance in the coffee sector. This action will
strengthen the company's advantage in the market and competitiveness. The acquisition
approach is particularly successful in strengthening a company's competitiveness,
which enhances its capacity to withstand business cycles.
Product improvement and new product development: By making improvements to
current products and developing new ones, Starbucks should think about diversifying
its product line. Using this strategy, the business can draw in new customers.

Starbucks should continue to maintain:

Customer satisfaction & happiness level
Employee motivation level
Environmental conservation efforts
Positive CSR Image
Despite its prior market success, Starbucks' management team needs to be aware of the
current business climate. The management team of the company will gain knowledge
that will enable it to modify its strategic procedures. Additionally, utilizing PESTLE
and Porter's five forces, the firm should evaluate the macro-environmental forces that
are most likely to have an impact on the firm.

Increased competitiveness is one of the significant problems facing the coffee industry.
Starbucks needs to modify its competitive methods if it wants to survive in the coffee
market. The growth in the number of Speciality coffee outlets established globally is proof
that the market is tremendously profitable. Market participants like Starbucks must
evaluate the internal and external business settings. Finding potential possibilities and
dangers should be the assessment's main goal. In the specialized sector, Starbucks is in a
prime market position. By putting the aforementioned strategic advice into practice, the
company can improve performance and guarantee continued corporate success.