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Starbucks Case Study

Starbucks Case Study. The Acquisition of Seattle’s Best Brad Gilbert Jessica Iversen Holly Kunz Methodist University . Overview. Who? What? When? Where? How? Why? Courses of Action Solution/Results. Who?. HISTORY Starbucks is the largest coffeehouse company in the world

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Starbucks Case Study

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  1. Starbucks Case Study The Acquisition of Seattle’s Best Brad GilbertJessica IversenHolly KunzMethodist University

  2. Overview • Who? • What? • When? • Where? • How? • Why? • Courses of Action • Solution/Results

  3. Who? HISTORYStarbucks is the largest coffeehouse company in the world -Founded in Seattle in 1971 -Over 17,009 locations in over 50 countries -2010 Net income $945,600

  4. Who? Seattle’s Best Coffee HISTORY: -1970 Whidbey Island, Washington (Wet Whisker)-Stewart Brothers Coffee Pier 70 -Pike Place Market -1988 SBC- local restaurant blind taste test -1998 AFC Enterprises

  5. Starbucks vs. Seattle’s Best 2003 Comparison • 4,952 location in North America • 90 Seattle locations • # of employees • Annual sales (2002) $ • 129 locations in North America • 22 Seattle locations • # of employees • Annual sales (2002) $

  6. What? • The Acquisition of Seattle’s Best Coffee (Set the scene, give background) • AFC Enterprises accounting scandal • Seattle’s Best and Cinnabon up for sale • (The sale of these companies has allowed AFC Enterprises to shift focus to Popeye’s and maximize the value of their portfolio)

  7. When? • April 2003 (timeframe)

  8. Where? • Seattle, Washington (location)

  9. How? • Both Starbucks and Seattle’s Best Coffee are major companies in the Seattle and the Pacific Northwest coffee scene. They are often competitors for the same retail space. Both have loyal fans with an almost cult-like devotion to their preferred brand. (Identify main players/relationships/interactions)

  10. Why? • Should Starbucks continue to compete with Seattle’s Best Coffee? Starbucks had the money and saw an opportunity to acquire their competitor. Should they purchase them to close them down, prevent them from growing, or use them to expand the overall corporation? (address financial management issue-issue that forces an examination of all courses of action)

  11. Courses of Action • 1. Do not buy Seattle’s Best. Continue to compete and operate as before. • 2. Buy SBC and close them down and completely absorb them. • 3. Buy SBC and keep them as a separate company. Create differentiation between brands. Use SBC distribution network to help Starbucks enter grocery stores.

  12. Solution

  13. Results

  14. The Future of Starbucks • Starbucks/Peet’s Merger • Starbucks/Green Mountain • Starbucks Specialty Barista Bar • Regional Beer/Wine/Cheese

  15. Starbucks vs. Seattle’s Best

  16. References • http://www.seattlepi.com/business/article/Starbucks-to-buy-Seattle-s-Best-Coffee-1112367.php • http://adage.com/print/96033

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