UNIVERSITY OF LUZON

Perez Blvd. Dagupan City

RESARCH PAPER ON FRANCHISING BUSINESS

STARBUCKS

In partial fulfilment of the requirements in BFM 111

(FRANCHISING)

Presented by:

ALDRIN G. TADEO

Presented to:

Dr. William Macob

PROFESSOR
 UNIVERSITY OF LUZON
Perez Blvd. Dagupan City

 INTRODUCTION

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. It was true when the first
Starbucks opened in 1971, and it’s just as true today.

Back then, the company was a single store in Seattle’s historic Pike Place
Market. From just a narrow storefront, Starbucks offered some of the world’s
finest fresh-roasted whole bean coffees. The name, inspired by Moby Dick,
evoked the romance of the high seas and the seafaring tradition of the early
coffee traders.

In 1981, Howard Schultz (Starbucks chairman and chief executive officer)

had first walked into a Starbucks store. From his first cup of Sumatra, Howard
was drawn into Starbucks and joined a year later.

In 1983, Howard traveled to Italy and became captivated with Italian coffee
bars and the romance of the coffee experience. He had a vision to bring the
Italian coffeehouse tradition back to the United States. A place for conversation
and a sense of community. A third place between work and home. He left
Starbucks for a short period of time to start his own Il Giornale coffeehouses
and returned in August 1987 to purchase Starbucks with the help of local
investors.

From the beginning, Starbucks set out to be a different kind of company.

One that not only celebrated coffee and the rich tradition, but that also brought
a feeling of connection.
 UNIVERSITY OF LUZON
Perez Blvd. Dagupan City

Company’s mission is to inspire and nurture the human spirit – one person,
one cup, and one neighborhood at a time.

 MAIN PROBLEM

HOW STARBUCKS MAINTAIN THE COMPANYS CREDIBILITY WHEN IT COMES

TO THEIR FIRST-CLASS COFFEE?

Starbucks has maintained its popularity through time by being flexible. It has
been opened to adapting to changing consumer tastes and preferences. Its
flexibility is also a part of the reason that allowed it to succeed in the tough
and primarily tea-drinking market of China. Thus, the introduction of almond
milk in its stores, in addition to other non-dairy alternatives such as coconut
milk and soymilk, comes as no surprise. The bend towards dairy-free products
can be understood by the following piece of research. According to Mintel, a
research firm, nearly 49% of Americans consume non-dairy milk, although not
exclusively. Consequently, the sales of dairy milk are projected to drop by 11%
by 2020. The move is expected to help the company boost its average spend per
 UNIVERSITY OF LUZON
Perez Blvd. Dagupan City

customer on beverages, by charging consumers an additional $0.60 to use this

as a substitute in their beverages.

Starbucks has always maintained its competitive advantage by being the leader
in product innovation. Pumpkin spice latte, one of the seasonal favorites at
Starbucks, was recently relaunched. The launch followed more than 150,000
incremental visits on the first two days as a result, Starbucks saw a share of its
national QSR market increase by roughly 30 basis points to 6.96%. On the
other hand, its competitors, Dunkin’ Brands and McDonald’s McCafé, which
launched the same coffee a week earlier, saw their market share recede.
 UNIVERSITY OF LUZON
Perez Blvd. Dagupan City

 DISCUSSION OF PROBLEM

Does the company treat its employees, customers, community, and

other stakeholders well?

Starbucks was one of the first companies in the U.S. to offer health
benefits to part-time workers and currently pays 70% of premium costs and
100% of preventative-care costs. It always refers to its employees as
partners and offers opportunities that few employers emulate. In 2014, it set
up the Starbucks College Achievement Plan (SCAP), an online bachelor's
degree program through Arizona State University with full tuition coverage
for partners who work 20 hours a week or more. So far, 2,900 partners have
graduated, and 12,000 are currently participating. The company benefits
from this program; almost 20% of people applying to Starbucks said SCAP is
the driving reason they applied. Partners in the program stay about 50%
longer and are promoted at three times the normal rate.

Is the company a good steward of the environment?

This is a qualified yes for a company that is so reliant on single-use

packaging to sell its goods. However, Starbucks does try to reduce its impact
on the environment in numerous ways. Since 1985, it has offered a discount of
10 cents per cup to customers who bring their own reusable cup. It has also
developed a recyclable lid that will replace a billion plastic straws per year, and
the company is committed to achieving that by 2020. The company is making
efforts to find next-generation recyclable or compostable cups via the
 UNIVERSITY OF LUZON
Perez Blvd. Dagupan City

 SUMMARY

And when we talk about coffee, one thing that definitely comes to any coffee
lover’s mind is ‘Starbucks’- one of the world’s finest coffees.

Starbucks is a global coffee giant, which was founded in 1971 as a local

coffee bean retailer. Headquartered in Seattle, the company is now the world’s
biggest coffeehouse chain, comprising of approximately 20,891 stores in 62
countries.

Starbucks logo and its packaging have a unique design that unfailingly
catches the interest and attention of onlookers. As we know, a logo ( designed
by a professional designer or a logo generator) is the face a company. This
memorable symbol is one of most recognized business logo design that’s adored
by coffee lovers from across the globe. In fact, it wouldn’t be an exaggeration to
say that the unique concept of Starbucks logo design has contributed
immensely in the company’s success worldwide.

The latest Starbucks logo is a much-simplified version of its old logos as

the surrounding text and the double outer circles have been completely
removed. Now, the new logo is a versatile symbol that looks impressive on t-
shirt designs, signages, brochures, websites, and many other promotional
products.

Here, we bring you up-close and personal with the design, history and
evolution of Starbucks logo which is nothing less than magnificent.
 UNIVERSITY OF LUZON
Perez Blvd. Dagupan City

 CONCLUSION

Starbucks has maintained its place in the coffee industry, by becoming a

coffee giant that continuously grows and expands. To do so efficiently,
Starbucks must stay aware of the possible threats that could impact their
desired growth. Performing a PESTLE analysis can help identify external
factors and the determination of these factors that could present future
opportunities for Starbucks to capitalize on. Starbucks must stay aware of
recent trends while working to grow with these trends to stay relevant.
Organizations such as Starbucks are the first ones in the market with
trend-centric products, become recognizable leaders and gain loyal
consumers with brand loyalty.

 RECOMMENDATION

To meet the local taste or preferences, Starbucks can act local, for
example by introducing local products in their shops offering local foods like
KAKANIN to be paired with there first-class coffee is quite different but it can
be a new attraction in the business. These will surely attract more customers
to their shop because of the new market strategy they are making to promote
their best coffee combined with a traditional food like KAKANIN.
 UNIVERSITY OF LUZON
Perez Blvd. Dagupan City

 REFERENCE/ SOURCE
 https://www.designhill.com/design-blog/starbucks-logo-overview-of-
design-history-and-evolution/
 https://en.wikipedia.org/wiki/Starbucks
 https://www.google.com/search?q=BACKground+of+the+business+starb
ucks&source=lnms&sa=X&ved=0ahUKEwiO16m5pITlAhUSH3AKHVf-
BFsQ_AUIDSgA&biw=1366&bih=657&dpr=1
 https://www.forbes.com/sites/greatspeculations/2016/10/13/how-is-
starbucks-maintaining-its-competitive-edge/#3d2eb873759c
 https://www.fool.com/investing/2019/09/19/esg-investing-is-
starbucks-a-responsible-investmen.aspx