Project Formulation and Business Strategy of Starbucks

Project Formulation and
Business Planning

EXECUTIVE SUMMARY
In the present report, Starbucks has been taken which is the manufacturing industry of
coffee products. In this context, report identified that business has unique features and
opportunities to develop their operations and functions to enhance profitability through operate
functions at different place. Market strategy is successful aspect that assists to increase profits
and revenue in different areas of operations. Financial position of the business is very effective
that assists to expand operations and functions new places successfully. Further, staff members
and their management is also effective that assists to enhance profits and revenue from several
functions.

Table of Contents
INTRODUCTION...........................................................................................................................1
BUSINESS DESCRIPTION............................................................................................................1
History and concept of business..................................................................................................1
Market for the organisation.........................................................................................................2
Business kind..............................................................................................................................3
Product and service ....................................................................................................................3
People in the organisation...........................................................................................................4
Financial status............................................................................................................................4
BUSINESS ENVIRONMENT ANALYSIS...................................................................................4
INDUSTRY BACKGROUND........................................................................................................6
Defining existing product and services.......................................................................................6
Size of industry...........................................................................................................................6
Important trends..........................................................................................................................6
Barrier to entry............................................................................................................................7
COMPETITIVE ANALYSIS..........................................................................................................7
Identify competitors....................................................................................................................7
Distinguish with rivals ...............................................................................................................7
Threats from competition............................................................................................................7
MARKET ANALYSIS....................................................................................................................8
Assess size of market and growth...............................................................................................8
Define target market....................................................................................................................8
Value proposition........................................................................................................................9
MARKET PLANNING...................................................................................................................9
Develop market planning............................................................................................................9
Marketing mix...........................................................................................................................13
OPERATIONS PLAN...................................................................................................................14
Operations ................................................................................................................................14
Break even point.......................................................................................................................15

Key success factors...................................................................................................................16
MANAGEMENT SUMMARY.....................................................................................................16
FINANCIAL PLAN.......................................................................................................................17
CONCLUSION..............................................................................................................................17
REFERENCES..............................................................................................................................18

INTRODUCTION
Project formulation is very important concept to develop profitability through solve
issues and establish new project. In this aspect, problems also consist as greater concern point
which need to be solved on time (Kerr, Rouse and de Villiers, 2015). In these there can be
various issues such as technology selection, appropriate place, size of plant, products, etc. In
addition to this, business plan has also important role that required to convey structure of
business, activities need to be performed, duties of employees, etc. Further, it also determines act
that ensure business goals, selection of targets and milestones of operations (Sekaran and
Bougie, 2016).
Present study is based on the Starbucks which is the coffee company of America
providing different types of coffee products in market. They served hot and cold drinks, bean
coffee, espresso, café latte, etc. For gaining insight knowledge of the organisation, report
analysis industry and market environment to diagnose more and better opportunities.
Furthermore, it demonstrates key strategies that can lead successful operations and functions in
chosen business unit. In addition to this, product and services of the chosen organisation
classified that enhance profitability at workplace. At last, it includes competitive analysis to
assess competitors, assess threats and market to target customers.
BUSINESS DESCRIPTION
History and concept of business
Starbucks is an American coffee enterprise and ascertain operations as coffee house
chain. This company established in Seattle, in Washington in 1971. From the help of last year
data, in November 2016 the company operates in 23,768 branches all over the world. This
business consists as main representative that distinguishes itself with coffee serving venues. In
addition to this, the chosen enterprise focuses on quality, taste and customer experience with
popularizing darkly roasted coffee (Ghazouani, Faris and Sayouti, 2014). Firstly, the chosen firm
opened in Seattle on March 31st, 1971 with only three partners. They all met when studied at
university of San Francisco. First store of the company was established in Seattle at 2000
Western Avenue from 1971-1976. History of the organisation has been elaborated in the
following table:
Year History
1

1971 In this year, firstly Starbucks opened in Seattle with three
partners that are Gordon Bowker, Jerry Baldwin and Zev Sieg.
1987 In 1987, owners of the enterprise sold their company to former
employee Howard Schultz who re branded outlets of the
enterprise (Simon, Fischbach and Schoder, 2014).
1992 The enterprise offered initial public offers that were issued in
market as stock in June 1992.
2002 Magazine launched in this year which named as Fortune and it
shows one of the best enterprise Starbucks from 100.
Market for the organisation
In order to expand operations and functions, first outlet of Starbucks exists in North
America that opened in Tokyo, Japan in 1996. In respect to assess the market of the chosen
business it can be demonstrated in following manner:
 Segmentation: Market segmentation is the oldest method of marketing. In this aspect,
market can be classified in order to possess functions and operations in 4 categories such
as demographic, behavioural, psycho graphic and geographic segmentation (Maryska and
Novotny, 2013). Demographic segmentation is the simplest form of market segmentation
which is used by the company to get right target population that use product and services
of business. With this regard, several bases can be adopted by the enterprise such as age,
gender, income, race, etc. Further, behavioural segmentation divided population on the
basis of usage, decision making pattern and behaviour (Löfving, Säfsten and Winroth,
2014). Along with this, psycho graphic segmentation defines on the basis of lifestyle of
people, their activities, interests, etc. In geographic segmentation, the business can
demonstrate segment on the basis of geography. From the above segmentations,
Starbucks using demographic and geographic segmentation to cater their operations. In
demographic, the chosen business classified market in term of age, gender, income,
ethnic and family life cycle (Skokan, Pawliczek and Piszczur, 2013). On the basis of age
group, the chosen organisation set their group aged of 25 to 55 years. On the other hand,
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