Starbucks

Analysis presented by Group 5

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Introduction

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INTRODUCTION

A distictive brand name

"Inspiring and nurturing the human spirit”

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Introduction

4
Introduction

5
INTRODUCTION

Analyzing techniques
● Macro environment (using PESTLE Matrix),
● Micro environment (using 5Poster and
Resources Audit model),
From Micro to Macro -> SWOT model (reference
method from a book: “Business Analysis Techniques”)

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INTRODUCTION

Identify the problems that make Starbucks fail in

the Vietnamese market
Include: Opportunities + Solutions
The analysis will be:
● Case-oriented, ie, no objective conclusions,
● Enough facts
● Draw evidence-backed conclusions.

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 02

Environment
Includes external and internal
environment

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 External
environment
Using PESTI matrix

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Politics & Legality

Having policies to stabilize the macro-economy

● Stable political institution
● Business laws: more complete and strict
● More business opportunities

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Politics & Legality

Changes in land law applied to economic zones and hi-tech

zones
● Higher incentives for land use levy, land rent, and water
surface rent (Decree No. 35/2017/ND-CP dated 3 April
2017)

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Politics & Legality

Having flexible and open policies to support foreign

businesses
● Human resource development support
● Credit support
● Access to production premises
Foreign investment in 2021: 31.15 billion USD

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Economy

Effective economic development policies

during the Covid-19 pandemic
● 2021’s GDP per capita increased 3.6
times compared to 2002’s
● Vietnam's middle class is growing
rapidly

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Economy

Income gap is increasing:

● Average monthly income per capita: increased 8.1% during
2016 - 2020 period
● Income in urban areas 1.6 times higher than rural areas
● Household income of the 20% richest group 8 times higher
than that of the 20% poorest group

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Economy

Average living expenditure:

● Average living expenditure/ person/ month: 2.7 million
VND (1.69 million VND on food and drink)
● In 2020, the richest group spent 3.5 times higher than the
poorest.

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Social Cultural

● 97% Coffee in Vietnam: Robusta

coffee
● Starbucks Coffee: Arabica
(Robusta’s caffeine content double
Arabica’s)
Starbucks coffee has become
unappetizing for Vietnamese people

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International

Coffee bean price reached an all-time high

(1000USD/ton)
● Supply chain disrupted
● Extreme weather in Brazil leads to
shortage in supply
● Blockage policies due to Covid-19
Significantly increases Starbucks' COGS

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 Internal
environment
Micro factors that directly affect Starbucks

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Resources Audit model

Financial
2021 financial performance:
● Revenue: increased 24% compared to 2020
● Operating profit margin: 16.8%, up from 6.6% of 2020
2022 business goals:
● Revenue: $32.5 - $33 billion USD
● 2,000 new cafes globally

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Resources Audit model

Financial
Starbucks’ strategies in Vietnam:
● Other F&B brands: franchising or joint venue with domestic partner
● Starbucks: franchising with a subsidiary (Idea Viet Food) and a foreign enterprise
(Beverage Co., Ltd. of Hong Kong Maxim Group)
● Total cost of franchising a Starbucks store: may up to $500,000

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Resources Audit model

Starbucks’ strategies in Vietnam:

● Other F&B brands: franchising or joint venue
with domestic partner
● Starbucks: franchising with a subsidiary (Idea
Viet Food) and a foreign enterprise (Beverage
Co., Ltd. of Hong Kong Maxim Group)
● Total cost of franchising a Starbucks store: may
up to $500,000

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Resources Audit model

Human
● Young employees (70% students and
opportunistic youth)
● Starbucks Vietnam: functional and hierarchical
organization
● Working environment: friendly, build close
relationships within the group, call employees
“partners”

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Resources Audit model

Reputation
● Offer a relax and enjoyable experience
● Always be creative
● 2021 brand value: $13.010 billion
● ”Premium coffee" brand in Vietnam

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Resources Audit model

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Resources Audit model

Physical
● Starbucks use energy and water saving
strategies, choose to use green building
methods and materials
● Starbucks maintains advanced technology
and saves costs, but still ensures the
consistency of product quality

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Resources Audit model

Physical
● Starbucks use machine learning algorithm
to enhance customer experience
● Each batch of Starbucks coffee is tested at
least 3 times before reaching customers

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Porter’s 5
Forces
To analyze

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Competitors

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Competitors

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Porter’s 5 Forces
analysis
Suppliers
● Global network of suppliers, mainly from Latin America, Africa, Asia-
Pacific.
● Buys coffee directly from farmers: John Parry's Coffee (Hawaii), farmers in
Sumatra, farmers in Ethiopia, the Baumann family (Mexico), Cau Dat (Da
Lat, Vietnam)

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Porter’s 5 Forces
analysis

Substitutes
● Number of substitutes: high
● Example: Juice, tea, alcoholic beverage,
milk tea

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Porter’s 5 Forces
analysis
Buyers
Target customers
● 25-40 years old
● High-income
● Professional careers
● Focus on social welfare
Mainly live and work in Hanoi Noi and Ho Chi Minh City

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SWOT model for Starbucks

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 04

Solutions
For Starbucks in Vietnam market

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Solution for Starbucks Vietnam
Diversify Accelerate
01 The product portfolio (S/W)
03 The process of increasing
number of stores (S/O)

Digital conversion Innovate

02 Build sales channel, link with 04 Communication messages,
food delivery app promote PR (S/T)

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THANKS
We are pleased to hear your questions!