Starbucks Corporation

Competitive Profile Matrix

Ferdinand C. Importado
Competitive Profile Matrix
Identifies a firm’s major competitors and
its particular strengths and weaknesses
in relation to its competitors.

Displays the basis of an organization’s

strategy and is a useful instrument to
communicate those strategic attributes
to all in the organization.
Difference from IFE and EFE
The IFE matrix consists of the internal
factors and the EFE matrix consists of the
external factors

The CPM matrix consists of a mix of both

internal and external factors
Weakness of CPM
CSF ratings are subjectively assigned a
rating between 1 and 4, and non-
uniformity may occur due to weights
being assigned subjectively by the
evaluators.

The total weighted scores obtained for

each company reveal relative strengths
or weaknesses of the companies but are
not to be implied as precise in nature.
Overview of the Quick Service
Industry
Companies in this industry operate
restaurants that provide food served to
customers who order and pay at a counter.
Overview of the Quick Service
Industry
Demand is driven by:

Demographics

Consumer tastes

Personal income
Overview of the Quick Service
Industry

15%

40%

45%
Starbucks Competition
McDonald's recently
launched its McCafe
campaign in which it sells
premium specialty coffee
beverages at a slight
discount to Starbucks’.
McDonalds has an
excellent platform from
which to compete as it
already has so many
stores in prominent
locations with drive-thru
windows.
Starbucks Competition
Dunkin' Donuts, uses
its donuts and the rest
of its menu as the
draw.
The customer can choose between a
coffee or a coffee and a donut.
Critical Success Factors
Advertising (4 – 3 – 3)
Starbucks McDonalds Dunkin’

• Brand • Traditional • Advertising

marketing media fund of 5%
• Social • $787.50M, of gross
media and 2% ↑, 2.8% retail sales
internet of total • Mobile
• $182.40M, revenues application
29% ↑, with over
1.37% of 1M
total downloads
revenues
Product quality (4 – 2 – 3)
Starbucks McDonalds Dunkin’

• Provides the • Utilizes • CMLs

highest automated deliver
quality of brewing products
coffee with less with the
brewing smelling same high
through its • Customer consistency
onsite responses and quality
brewing and “decent” to
smelling “absolutely
disgusting”
Product variety (3 – 4 – 3)

Starbucks McDonalds Dunkin’

• Hot and • Hamburger, • Donuts and

cold coffee, sandwich, sandwich,
beverages, chicken, burrito and
and some spaghetti, breakfast
bread French meals
fries, and
breakfast
meals
Product competitiveness
(2 – 4 – 2)
Financial position (3 – 4 – 3)
Starbucks McDonalds Dunkin’

• Net revenues • Combined operating • Total revenues for

increased by 14%. margin was 19.82% 2012 amounted to
• Consolidated in 2012, down from $658.181.
operating income 20.38% . • The operating
was $2.0 billion in • Revenues increased margin decreased
fiscal 2012. 2.08% from $27,006 from 32.68% in 2011
• Operating margin in 2011 to $27,567 to 36.38% in 2012.
increased to 15.0%. in 2012. • Diluted earnings per
• EPS for fiscal 2012 • Diluted earnings per share for 2012 is
was $1.79. share was $5.36. $0.93
• Cash dividends • Cash dividends • The company did
declared increased declared were $2.53 not pay cash
from $0.56 in 2011 and $2.87 in 2011 dividends for 2011
to $0.72 in 2012. and 2012 and paid $0.60 per
respectively. share in 2012.
Customer loyalty (2 – 3 – 4)
Starbucks McDonalds Dunkin’

• 33M Facebook • While low • No. 1 rank in

fans consumer customer loyalty
• Former confidence by Brand Keys in
Starbucks continues to coffee category.
consumers negatively affect • Overall Dunkin’
begun visiting overall retail ranked 17 (12)
Dunkin’ Donuts sales and the worldwide,
and McDonalds IEO segment, McDonalds at 32
or purchased in- McDonalds (26) and
home coffee outperformed Starbucks at 45
brewers and the market and (100)
espresso grew its market
machines. share.
Global expansion (3 – 4 – 4)

Starbucks McDonalds Dunkin’

• Starbucks has • McDonalds • Dunkin' Donuts

about 18,000 operates over had 3,173
stores world-wide 1,900 restaurants restaurants in 31
of which roughly across 19 countries.
13,000 are in the countries in Latin • Baskin-Robbins
North America. America and the had 4,517
• Starbucks is in 62 Caribbean. restaurants in 45
countries • In Japan, there countries.
nearly 3,300
restaurants.
• Over 1,600
McCafé locations
Customer service (4 – 3 – 3)
Starbucks McDonalds Dunkin’

• Third place • Enhanced • Re-designed

concept appearance coffeehouses.
• Introduced the and • Creating a
“Latte functionality more desirable
Method” of McDonalds’ place for fast-
restaurants casual eating.
• Extended
operating
hours and over
5,400
restaurants are
open 24 hours.
Competitive Profile Matrix
Strategies
Product quality and variety
Acquire business that are engaged in the
production and selling of highly
specialized bread, pastries, cookies,
cakes and the like that will supply its
own requirement. Starbucks mode of
acquisition can be full integration, or just
by entering into a long-term contract.
Strategies
Price competitiveness
Instead of buying premium coffee beans
from outside suppliers at a high cost, the
company can just buy supplies from its
competitors at a lower price.
Acquire or purchase a portion of its
competitors’ stocks, so that they will have
access lower costs of coffee beans and
acquire the necessary competence to
become a cost leader.
Strategies
Customer loyalty
Partnership with the producers of
espresso machines to include Starbucks
products into the packaging.
Diversify into the business of producing
its own coffee espresso machines.
Strategies
Global expansion
Increase market share by selectively
opening stores in new and existing
markets (including China and India) as
well as increasing revenues in the
existing stores.
Grand Strategy Matrix
SFAS Matrix
General Strategies
Into a joint venture with the producers
of espresso machines to include
Starbucks products into the packaging.

Increase market share by selectively

opening stores in new and existing
markets (including China and India) as
well as increasing revenues in the
existing stores.
General Strategies
Acquisition or control of brokerage /
logistic firms to support Starbuck’s
supply chain management.

Acquisition or control or coffee bean and

dairy product producers. ;]]