Marketing for Starbucks Light Lunch Option - Business Plan Example

Marketing Plan for Starbucks’ Light Lunch Option Total Number of Words: 4,260 Table of Contents I. Executive Summary …………………………………………………….. 4 a. Marketing Objectives ………………………………………... 4 b. Marketing Strategies ………………………………………… 4 b.1 Target Market Strategy ……………………………… 4 b.2 Positioning Strategy ………………………………… 4 b.3 Product Strategy …………………………………….. 5 b.4 Pricing Strategy ……………………………………… 5 b.5 Promotional Strategy ……………………………….. 5 b.6 Supply Chain Strategy ……………………………… 5 c. Implementation and Control ……………………………….. 5 II. Situational Analysis …………………………………………………….. 6 a. Past Scenario ………………………………………………… 6 b. Recent Year’s Scenario ……………………………………. 6 c. Expected Future Scenario …………………………………. 6 III. Internal Environment …………………..……………….……………… 7 a Mission Statement …………………..………………………. 7 b. Organizational Structure …………………….……………... 7 c. Corporate Culture …………………..……………………….. 7 d. Products ………………………………..…………………….. 8 e. Previous Sales ……………………………………………….. 9 f. Target Markets ……………………………………..………… 10 g. Distribution Channels ……………….……………………… 10 III. External Environment …………………………………………………. 10 a. Competitive Environment …………………………………… 10 b. Economic Environment ……………………………………… 11 c. Technological Environment ………………………………… 11 d. Political and Legal Environment …………………………… 11 e. Socio-cultural Environment ………………………………… 12 IV. SWOT Analysis ………………………………………………………… 12 a. Strengths ………………………………………………………. 12 b. Weaknesses …………………………………………………….. 13 c. Opportunities ……………………………………………………. 13 d. Threats …………………………………………………………… 13 V. Marketing Strategies ……………………………………………………. 14 a. Target Markets …………………………………………………. 14 a.1 Consumer Markets …………………………………….. 14 a.1.1 Socio-Demographic Segmentation ……… 14 a.1.2 Lifestyle of Psychographics Segmentation ……………………………… 14 b. Media Habits …………………….……...……………………….. 15 c. Organizational Markets ……………………………………….. 15 VI. Positioning the Product ………………………………………………… 15 VII. Product Strategies ………………………………………………………. 15 VIII. Pricing Strategies ……………………………………………………….. 16 IX. Promotion Strategies …………………………………………………… 16 X. Supply Chain Strategies ………………………………………………… 18 XI. Implementation of Action Plan …………..…………………………….. 18 XII. Measurement and Control Strategies ………………………………… 20 XIII. Market Research ………...………………………………………………. 21 XIV. Trend Analysis …………………………………………………………… 22 XV. Conclusion ……………………………………………………………….. 22 Table I – Summarized Financial Performance of Starbucks During the Last Eight Quarters …………………………………………………… 23 Table II – Market Share and Revenue of McDonald’s, Burger King, Wendy’s and Other Fast-food Restaurants in the United States .. 24 References ……………………………………………………………………….. 25 - 28 Executive Summary Starbucks Company having a total of 11,434 retail store outlets throughout the United States was able to capture 40% of the market share in retail coffee industry. Given that Starbucks is experiencing profit loss over the last few years (MSN Money, 2008), Starbucks conducted an experimental testing with regards to offering light lunch throughout 39 cities and suburban stores back in 2002. (All Business, 2002) Aiming to increase the company’s profitability from the U.S. market, Starbucks officially offers light lunch options in order to increase the company’s sales on food items. (Harris, 2007; The Queens Gazette, 2007) Aside from offering salads and pasta to its existing consumers, Starbucks Coffee will also sell two yogurt parfaits throughout the country. (Reuter UK, 2007) Marketing Objective(s) The main objective of Starbucks is to increase the company’s total net revenue by 10% over the next 6 months by offering the new light lunch option. Marketing Strategies 1. Target Market Strategy. Taking advantage of more than 4,400 Starbucks coffee shop throughout the United States (Harris, 2007), the company will actively advertise using television advertisements and print ads in magazines that promotes healthy lifestyle and newspaper. Starbucks will market lunch options to its existing and new customers within the country. 2. Positioning Strategy. Starbucks will position the company as the U.S. largest coffee retail company that sells not only pastries and cakes but also light and organic foods for lunch. 3. Product Strategy. Aside from maintaining the availability of a wide-variety of coffee drinks, Starbucks recently introduced organic food products throughout the U.S. market. (Harris, 2007; The Queens Gazette, 2007) For salad, fresh ingredients will be delivered at each store. To maintain the freshness of salad, everything will be assembled as soon as customers place an order. In line with the promotion of light lunch option, baristas will be required to undergo a training focusing on the proper food preparation for salad and parfaits and a standard approach in taking customers order. 4. Pricing Strategy. Similar to the high-cost of Starbucks Coffee, the company aims to sell a wide-variety of salad with market price ranging between US$ 5 to US$ 61 including parfaits for lunch deserts which is priced at US$ 3.45 each. (Harris, 2007; The Queens Gazette, 2007) At Starbucks, the company concentrates more on maintaining the freshness and quality of food and drink products followed by convenience rather than selling below a premium price. 5. Promotional Strategy. Starbucks will promote its latest light lunch options through news paper and e-news publications that reveals the market prices and food’s nutritional contents to the public (Lang, 2008; The Queens Gazette, 2007), as well as in its existing and new websites (Parenting.com, 2008). 6. Supply Chain Strategy. Ingredients for chilled salads and other food items will be delivered throughout its existing 4,400 Starbucks Coffee store outlets all over the United States (Parenting.com, 2008; Harris, 2007). Implementation and Control In relation to Starbucks’ light lunch options; the action plan will discuss the necessary promotional activities, schedule for each promotional activity, stakeholders who are responsible in executing a particular promotional activity, and the estimated budget needed for each activity will be executed. Suggested measuring and control strategies will also be included in the action plan. (See Details of Implementation of Action Plan and Measurement and Control Strategies on page 14 – 16) Situational Analysis Past Scenario. With a strong U.S. economy, Starbucks managed to earn good profit by selling mostly coffee beverages and other equipments used in making coffee. Recent Year’s Scenario. With slow growth in U.S. economy, selling of traditional coffee beverages and other related equipments became insufficient in maintaining the high operating income the company used to earn back when the U.S. economy was strong. Based on the U.S. market alone, Starbucks’ profitability had significantly declined from $310.9 million down to $193.9 million during the 1st and 2nd quarter of 2008. (See Table I –Summarized Financial Performance of Starbucks During the Last Eight Quarters on page ) One major factor that contributes to Starbucks’ decline in profit is the annual increase in operating expenses aside from a significant decline in the total U.S. net revenue caused by economic down turn and housing crisis in the country (MSN Money, 2008). Expected Future Scenario. Aiming to increase the company’s total net revenue as well as the company’s operating income, Starbucks will promote light lunch option such as the selling of pasta, sandwiches, salad, and parfaits. Internal Environment Mission Statement. “Establish Starbucks as the premier purveyor of the finest coffee in the world while maintaining our uncompromising principles while we grow.” (Starbucks Coffee, 2008e) Organizational Structure. As a publicly traded company, the ten members of Starbucks’ board of directors are headed by Howard Schultz as the chairman and the chief global strategist and CEO. (Starbucks Coffee, 2008c) The operation of Starbucks Coffee is handled by COO Martin Coles. Also the senior vice president of Finance and Global Business Operations, Starbucks Coffee International is headed by Troy Alstead. (Starbucks Coffee, 2008a) Among the marketing leaders of Starbucks Coffee in U.S. includes the ff.: (1) Jim Alling who is the SVP Marketing in North America; and (2) Thomas Yang – SVP, Marketing of Starbucks International. Responsible in maintaining the supply of coffee beans and other raw materials and products throughout Starbucks retail outlets, E.R. (Ted) Garcia was appointed as the EVP. Supply Chain and Coffee Operations. (Starbucks Coffee, 2008a) Being monitored by the district managers, the front liners in each Starbucks coffee shop are the Baristas. Corporate Culture. The top management of Starbucks builds a strong company culture that enables its employees to feel and consider themselves as an important part of the company. In line with making Starbucks employee feel respected and dignified (Kempbell et al., 2002), the company invested more money in the provision of trainings and development to Starbucks employees. Aside from providing employees with necessary trainings and development program, The company also extend employee benefits such as medical, dental, vision and short-term disability insurance, paid vacation and holidays, mental health or chemical dependency benefits, employee assistance program, career counseling, product discounts, 401(k) savings plan, and a stock option plan. (UW Business School, 2003) According to Schultz, it is difficult for employees to feel financially and spiritually attached with their jobs without these employement benefits. (Wyss, 2006; MSNBC, 2005) He added that the stock option plan could increase the loyalty of employees and motivate them to service the customers with the best service they could render. The company also actively participates in the implementation of Corporate Social Responsibility (CSR) which includes extending financial support to: (1) conservation international; (2) Earthwatch institute; (3) African Wildlife Foundation; (4) Save the Children; and (5) Mercy Corps strengthen the brand equity of Starbucks Coffee. (Starbucks Coffee, 2008d) Through proper implementation of CSR, Starbucks is able to build a strong relationship and long-term benefits between the customers and the company. It also enables the customers to establish a positive attitude on the company’s new products. (Berens, Van Riel, and Van Bruggen, 2005) In general, satisfied customers are considered a very important part of the company’s marketing strategy since it could trigger a long-term profitability and increase the market value of the company. (Fornell et al., 2006; Gruca and Rego, 2005) Products. Prior to offering light lunch option, Starbucks offers a wide-variety of coffee and other beverages such as: brewed coffee; caffé americano; caffé latte; caffé mocha; cappuccino; caramel macchiato; espresso; white chocolate mocha; frappuccinos; and Tazo ® tea. (Starbucks Coffee, 2008g) The company also offers different choices of fresh tasting food such as: (1) blueberry, chocolate supreme, vanilla and chocolate, or strawberry and white chocolate muffins (Starbucks Coffee, 2008j); (2) sandwiches like ham, bacon & cheese, provolone & bacon bloomer, and croissant (Starbucks Coffee, 2008i); (3) cakes, brownies, and other treats like apple pie, dulce de leche, cookies, yoghurt, and biscotti (Starbucks Coffee, 2008j); and (4) pastries (Starbucks Coffee, 2008h). Previous Sales. The high costs of restructuring expenses (US$0.03 per share) combined with the significant decrease in the company’s total sales made this year’s second quarter net income drop from last year’s first quarter net income of US$ 150.8 million (US$0.19 per share) down to US$ 108.7 million (US$0.15 per share). (Financial Post, 2008; MSN Money, 2008) Since the 3rd quarter of 2006, the number of new stores opened in the United States has been constantly increasing every quarter. Because of the high operating expenses combined with the slow growth in U.S. economy, Starbucks has been experiencing profitability problem making the top management decide to start cutting down the opening of new stores. This strategic move will allow Starbucks to maximize its existing resources while trying to keep the company’s total net revenue and operating income up. (See Table I –Summarized Financial Performance of Starbucks During the Last Eight Quarters on page ) Target Markets. Even though the recent total net revenue significantly declined due to the slow growth in U.S. economy; the number of individuals who are supporting Starbucks food and beverages is remains high. Expected target markets of Starbucks’ light lunch options will be the company’s existing loyal consumers who are able to afford the high market price of foods the company is offering including those individuals who are living with fast-paced lifestyle. Distribution Channels. Starbucks’ light lunch options will be readily available throughout its 4,400 company-owned coffee shops located all over the United States. (Harris, 2007) External Environment Competitive Environment. Aside from small-scale cafeterias and other restaurants, Burger King’s 2007 financial statement reveals that Starbucks’ top three competitors for lunch market includes: (1) McDonald’s (45%); (2) Burger King (14%); (3) Wendy’s (14%); and (4) others (27%). (Burger King, 2007) (See Figure I – Market Share Breakdown of Fast-Food Restaurant in America (as of 2006) on page ) Being the biggest player in fast-food restaurants, McDonald’s was able to earn total revenue of $21.6B from its total of 31,046 restaurants (combination of company-operated sales, franchised restaurants, and affiliated restaurants). (McDonalds Corporation, 2007) During the same year, Wendy’s earned $2.4B revenues from its 6,673 restaurant outlets whereas Burger King earned $2.3B revenues from its 11,283 restaurants. (Burger King, 2007; Wendys , 2006) Economic Environment. The U.S. economy has been facing a recession causing a higher rate of unemployment. Considering the slow growth in U.S. economy combined with the high unemployment rate and housing crisis, Starbucks is facing a more serious challenge on how the company could increase its profitability despite the economic recession. Since there is a higher price for the cost of energy and a lower consumer spending on coffee drinks, the management of Starbucks Coffee decided to close down coffee shop outlets that are non-performing. (MSN Money, 2008) Technological Environment. Aside from investing on heavy-duty coffee machines, Starbucks heavily relies on the use of information and telecommunication technology such as the use of the Internet and mobile phones to enable the supply chain manager to communicate easily with the baristas in each local store outlets and Starbucks’ warehousemen. Establishing an open communication line between each of Starbucks’ stakeholders enables the company to balance its domestic demand with the supply of raw materials and other finish products such as coffee beans, packaging materials, Tazo brisk tea, milk, cakes and pastries, chilled salads, pastas, and parfaits. Political and Legal Environment. In relation to Starbucks employees, a lot of complaints related to the sharing of tips left by customers. Depending on the existing state law, Massachusetts law requires the baristas to share the money left by customers in the tip jars with the shift supervisors who perform a similar work load but earns more for their managerial responsibilities. However, the tips-sharing practice at Starbucks strongly violates Massachusetts tips law which states that the sharing of tips should be reserved for waiters, bartenders, and other service employees who are paid below the minimum wage or US$8 per hour. (Saltzman, 2008) Aside from tips law, Starbucks is also facing multiple violations with regards to unfair labor practices such as discrimination against the pro-union employees in order to avoid unionization against the company. (Starbucks Union, 2005) Socio-cultural Environment. Starbucks is a highly competitive coffee retailer. Being a multi-national company, Starbucks’ existing consumers have a broad cultural background and lifestyle. For this reason, Starbucks invest a huge amount of money training its employees regarding the importance of diversity. In line with this matter, Starbucks HRM policy requires each of the company’s new baristas to attend a total of five-class workshop training prior to serving the customers. This strategy is essential in ensuring the delivery of a good quality customer service. (UW Business School, 2003) SWOT Analysis Strengths. The following are Starbucks Coffee’s strengths: Strong organizational culture which contributes in building a long-term relationship with its existing customers. Creative, skilled, and diverse Starbucks’ employees. Strong brand equity which was established throughout many years of company’s success. Competitive product lines ranging from foods to drinks. Good leadership skills & vision of Howard Schultz. Implementation of effective corporate social responsibility (CSR). Outstanding customer service. Competitive advantage due to product differentiation. Weaknesses. The following are Starbucks Coffee’s weaknesses: Even though Starbucks has a reputation for new product development; the company is highly dependent on selling coffee. The access fee for Wi-fi at Starbucks is too expensive to attract more consumers to visit the coffee shops. (ComMetrics, 2008) Starbucks overcrowds the market causing business competition among each store outlet. Opportunities. The following are Starbucks Coffee’s opportunities: Joint venture or partnership with other existing food and beverages company. i.e. Pepsi Co. was given the right to sell Starbucks Doubleshot, Frappuccino, and bottled iced coffee. (Pepsi Co., 2008) Innovating new product or menu expansion such as: (1) light lunch option; and/or (2) selling organic foods in the market. Threats. The following are Starbucks Coffee’s threats: Declining of the U.S. economy resulting to the increase in unemployment rate. Unemployed individuals will have less disposable income to patronize Starbucks products. Existing labor charges against Starbucks. Potential new entrants or players in the market. Government intervention particularly on the increase on employees’ minimum wage. Mc Donald’s and other similar fast food restaurants offering a better quality and cheaper market price of coffee. (MSN Money, 2008) Marketing Strategies Target Markets. The company will first concentrate on targeting its existing customers followed by tapping new potential customers. Consumer Markets. In marketing the light lunch option, Starbucks Coffee will continue to target its existing and new consumers. Socio-Demographic Segmentation Male and female Teens, young adults, older generation Age: 15 – 70 Single, Married, Families of 3 or more, divorced. Household income: $20,000 and above Educational Attainment: High School, College, Masters, & PhD Degree Located in midsize to large urban and suburban area. Lifestyle or Psychographic Segmentation Busy lifestyle in school or at work Coffee drinkers Brand conscious individuals Media Habits. Based on the research survey result that was conducted exclusively for this study, the average existing Starbucks’ consumers prefer the use of the following media: 1. Television (48%), Internet (28%), newspapers (13%), and magazines (11%). 2. Respondents enjoy watching either drama or action shows on television or theatres. 3. With regards to the use of the Internet, respondents enjoy visiting social network-oriented websites such as: MySpace and YouTube. Organizational Markets. Even though news reports have been widely spread all over the news paper and the Internet since the year 2007, Starbucks’ light lunch option will be marketed in approximately 4,400 Starbucks coffee shop outlets located throughout the different states in the United States. (Harris, 2007; The Queens Gazette, 2007) Positioning the Product. Starbucks Coffee positioned a different variety of chilled salad as ‘light lunch option’ which could easily attract individuals who are health conscious and appreciates good-quality food items. The high market price of chilled salad served at the U.S. Starbucks coffee shop outlets preserves the prestige name of Starbucks and good quality services offered by the Baristas. Product Strategies. To increase the expected sales of Starbucks Coffee despite the slow growth in the U.S. economy, the company recently introduced the Starbucks’ light lunch option. To promote Starbucks’ light lunch option, the marketing manager should: 1. Promote the importance of healthy eating and diets; 2. Enable the local people to become aware that eating organic foods taste equally good; and 3. Actively participate in campaigns related in fighting obesity. To increase customers’ awareness on the company’s new products, Starbucks will conduct an in-store advertising campaign by: (1) placing a huge printed ads at each of the store’s main entrance; (2) instruct the baristas to offer the ‘Light Lunch Menu Option’ to each customers; and (3) make a Light Lunch Menu at each of the store counters. Pricing Strategies. Starbucks will maintain the market price of chilled salad items which costs around US$ 5 – 6 per order. The pricing strategy used by the company is necessary in making the new products looks more appealing to value-conscious individuals. Basically, maintaining a higher market price will preserve the prestige of Starbucks’ brand name and prevent it from losing its competitive advantage against similar food items produced by other company. Promotion Strategies. In order to increase the company’s net income, the promotional strategies that have been widely used by Starbucks Coffee include the following: 1. News report that features Starbucks’ latest business approach and the benefits of eating organic foods associated with the product-line posted on the newspaper, magazines, and the Internet. (Financial Post, 2008; MSN Money, 2008; Parenting.com, 2008) 2. In-store advertisment and promotional activities such as ‘free taste option’. 3. For online survey form, respondents will receive a coupon stating a free cup of regular coffee. 4. Offer a tax discount to individuals who would voluntarily fill out a comment card explaining what they would like to see on Starbucks lunch menu including how they feel about healthy, organic, quick and convenient lunch option made available at the store. Each individual who will participate and completes the online survey form which will be made available at Starbucks website will have the opportunity to download a printable certificate that caries a unique serial number to claim a free cup of regular coffee at designated Starbucks store outlets. The unique serial number will be used as a method of keeping track with the claimed cups of coffee. In the process of tracking down the claimed certificates, baristas will enter the serial number in a portable computer to make sure that the certificate presented at each designated store is valid. To encourage each online survey respondent to immediately visit any of the designated Starbucks store outlet, the free coffee coupon will be valid between July 1 – 30, 2008 only. With regards to the comment cards, baristas will inform each customer about the latest Starbucks’ promotional activity. Right after each customer fills up the comment card while waiting for their orders, handing back the comment card to baristas will be exchanged with a tax discount coupon which will entitles the client a discount on his/her next drink. For business purposes, tax discount will be redeemable from the same store that issues the coupon. The online survey form will be more comprehensive as compared to the comment card. In the process of implementing the online survey, managers from each store locations will be required to complete online training course which will guide them on how to dispense surveys in the stores and how to direct people to the online survey option. Eventually, managers would then train their subordinates to do the task. Supply Chain Strategies. Starbucks Coffee has already established a ready distribution channel throughout its 4,400 existing coffee shop outlets. With the use of information and telecommunication technology, Starbucks will be able to monitor the need to order for additional food and drink supply including other raw materials such as: coffee beans, packed sugar, recyclable cups, etc. from its centralized warehouse department. Implementation of Action Plan. For a period of three-months, the action plan for Starbucks’ light lunch option will discuss the necessary promotional activities, schedule for each promotional activity, stakeholders who are responsible in executing a particular promotional activity, and the estimated budget needed for each activity which will be executed within the big city of New York and California. To conduct a market research with regards to the best way to advertise Starbucks’ light lunch option, comment cards will be used to determine which among the media sources most Starbucks’ consumers prefer. After conducting a market research study, U.S. Marketing Head will identify and study the best television network; potential magazines; and newspaper print ads that will be used in promoting Starbucks’ light lunch option to its target consumers. As part of conducting a consumer research with regards to customers’ satisfaction on ‘light lunch option’, in-store comment cards and online surveys will be utilized. Objective: Increase the public awareness regarding the latest Starbucks’ light lunch option Invite healthy conscious individuals to visit Starbucks coffee shops Increase the gross sales of Starbucks through the selling light lunch option. Action Item Beginning Date End Date Responsible Party Costs Remarks 1. Conduct Market Research to Find Out How to Advertise to Existing Consumers. July 1, 2008 July 10, 2008 U.S. Marketing Head & bartistas $25,000 Implement the use of comment card & online survey in exchange of redeemable tax coupon & free coffee respectively. 2. Identify and study television networks and the available show time for commercials July 5, 2008 July 10, 2008 U.S. Marketing Head $70,000 Investing on showtime during peak hours will be considered. 3. Identify and study potential magazines that promotes healthy lifestyle and news paper print ads July 5, 2008 July 10, 2008 U.S. Marketing Head $30,000 Choose a qualified magazine that caters the needs of Starbucks’ target consumers. 4. Runs television advertisement July 10, 2008 July 30, 2008 Cable Network $50,000 Cable network will be responsible in the allotment of time for the advertisement. 5. Runs magazine and news paper advertisement July 27, 2008 August 15, 2008 Magazine Editors $30,000 Will be included in June and July issues 6. Conduct consumer research September 1, 2008 September 30, 2008 U.S. Marketing Head & baristas $80,000 To analyze and measure customers’ satisfaction and brand awareness; Professional market analysts and web-page programmer will be hired to participate in the project. Measurement and Control Strategies. To determine the success of the proposed marketing action plan, the company should keep track on its profitability particularly its monthly sales of Starbucks’ light lunch option. Based on Starbucks’ expected profit coming from the sales of light lunch option, the company could make some necessary adjustments such as extending the television, magazine and newspaper advertisement which will also be posted on the Internet. In the process, the company could eliminate food items that are not saleable. Another effective way of identifying the best selling food items from non-saleable ones, baristas of each store should be given additional task of tallying the number of orders under the light lunch menu option. At the end of each month, final report coming from each store outlet should be gathered and consolidated in order to come up with the final figures. Objective: To determine the success of proposed marketing action plan. Action Item Beginning Date End Date Responsible Party Costs Remarks 1. Measure sales from Starbucks’ light lunch option. July 1, 2008 September 30, 2008 Starbucks accountants $10,000 Inform Starbucks’ accountants to tract monthly sales of Light Lunch Option. 2. Give Baristas the task of tallying the number of orders under light lunch menu. July 1, 2008 September 30, 2008 Baristas - Tallying the number of orders made enables the managers to identify saleable from non-saleable items Market Research. The company should continuously conduct a market research in order to identify and determine the specific needs and consumers’ attitude on Starbucks’ light lunch option. One way of determining the consumers’ perception with regards to the food items that Starbucks is offering for its light lunch option, the company could incorporate an online survey. Another way to determine consumers’ perception is to conduct a quick one-on-one interview with Starbucks’ consumers who have tried any of the company’s chilled salads and pasta. For the same purpose, the company could also instruct the baristas to distribute comment cards to consumers who have ordered any of the company’s light lunch option. Market Trend Analysis. In order to keep track on Starbucks’ new products, Starbucks should monitor its monthly sales including the number of orders made under each food items. Identification of food items sold under ‘light lunch option’ will enable Starbucks to determine its best selling food item. The market trend analysis will also enable the company to make some corrective adjustments with regards to the available Starbucks food items when needed. Conclusion A marketing plan for Starbucks’ light lunch option will enable the company to develop a promotional plan for the new business strategy aside from allowing the stakeholders to know their specific task and other important matters related to the project. The promotion of Light Lunch Option could increase the sales and profitability of the company given that the average number of customers who visits Starbucks store outlets between 11 a.m. to 1 p.m. is low as compared to the rest of the business hours. To enable Starbucks remain profitable in the market, the company should avoid saturating a specific geographic market. (MSN Money, 2008) This will allow the company to maximize the business operation in each Starbucks store outlet. *** End *** Table I – Summarized Financial Performance of Starbucks During the Last Eight Quarters 2008 2007 2006 2nd Qtr 1st Qtr 4th Qtr 3rd Qtr 2nd Qtr 1st Qtr 4th Qtr 3rd Qtr Number of Total Stores in U.S. 11,434 11,168 10,684 10,295 9,814 9.401 8,896 8,402 Number of Newly Opened Stores in U.S. 266 484 389 481 413 505 494 398 Operating Expenses 1.74 B 1.81 B 1.63 B 1.58 B 1.52 B 1.53 B 1.39 B 1.33 B U.S. Total Net Revenue 1.63 B 1.72 B 1.79 B 1.64 B 1.78 B 1.85 B 1.62 B 1.38 B Foodservice & Other Revenue 95.7 M 98.0 M 89.5 M 83.8 M 89.3 M 86.3 M 78.2 M 78.9 M Operating Income 193.9 M 210.9 M 224.5 M 253.2 M 267.6 M 325.1 M 246.4 M 225.3 M Net Earnings per Share $0.15 $0.28 $0.21 $0.21 $0.19 $0.26 $0.15 $0.18 Source: Starbucks – Financial Releases, 2008 Table II – Market Share and Revenue of McDonald’s, Burger King, Wendy’s and Other Fast-food Restaurants in the United States Revenue (US$ in billion) Total Number of Restaurants Market Share McDonald’s 21.6 31,046 45% Burger King 2.3 11,283 14% Wendy’s 2.4 6,673 14% Others 9.7 - 27% Total US$ 36 billion 100% References: "All Business." 22 October 2002. 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Wyss, Lara. “Starbucks.” 8 February 2006. Starbucks Annual Meeting of Shareholders Starts Over a Cup of Coffee; Companys Impact Now Extends Well Beyond Stores Four Wall. 27 May 2008 . Read More