PART I- Background -- 5 POINTS 1.

The first Starbucks opened in Seattle, Washington, on March 30, 1971 by three partners: English teacher Jerry Baldwin, history teacher Zev Siegl, and writer Gordon Bowker. 2. Total stores: 17,003 (as of October 2, 2011), in 56 countries. 3. Starbucks' overall mission: to inspire and nurture the human spirit one person, one cup and one neighborhood at a time. 4. The main 5 categories are: community, environment, ethical sourcing, wellness, diversity. 5. Date: Wednesday, March 21, 2012 Time: 10 a.m., doors open 8 a.m. (Pacific Time) Location: Marion Oliver McCaw Hall at Seattle Center, 321 Mercer Street (between Third and Fourth Avenues), Seattle, WA 98109.

PART II SWOT ANALYSIS [32 points] Strength1. Starbucks is well known company around the world, it has a very strong name among people and not only for coffee drinkers. The company changed tour culture when it first opened. For many of us Starbucks the main place for us to buy coffee. It changed the way we drink our coffee and hoe we order it. 2. The growth in the company shares indicates its strength and stable condition in the coffee market. 3. Every Starbucks's that opened was successful in every city and every country. The company is expending in to more products and in new market like china. 4. People are buying more coffee in general and particularly in Starbucks. This fact leads to a growth in the company sales and profit in the future. Weakness1. The company is making efforts to emphasize its uniqueness, but the fact that there are so many stores in every neighborhood contradicts the company approach.

2. The companys chairman decisions are very hasty and don't take under consideration all the factors that needs to be consider when entering a n new product into the market. This can make the company loose valuable resources such as time and money. Opportunities1. Following the recovery from recession, Starbucks now has more options for growth which is a broad product range launches. 2. Exploiting the opportunities of the company, the company in Asia plans to open new stores in China and intends to enter the market in India and Vietnam by 2013.

Threats1. Although today it seems that the coffee market keep growing expanding, we can never know what the future holds. Investment of money and resources can bring unnecessary losses.

PART III MARKETING MEMO [68 points] Date: April 15, 2012 To: Howard Schultz, chairman, president & chief executive officer From: Annie Young-Scrivner, Chief Marketing Officer Subject: Re-entering the Israeli market

Ays

As we all know, in the past Starbucks has failed the mission of entering the Israeli coffee market. From many reasons I suggest you reconsider the option of try again to enter this market. To begin with, the Israeli coffee culture is developed and well adapted to changes and development in this area and in general. In addition, the Israeli people are very much affected of the western world culture and brands. Another reason, the percent of coffee consumers among the Israeli population is very high compare to other countries. Therefore, its a worthwhile audience.

The Israeli population is a big fan of variety and innovation. Since the last try to infiltrate the Israeli market, Starbucks has launched a variety of new products that now can attract the Israeli audience

There are several reasons why Starbucks failed previously in Israel. First, the global formula was unsuitable for Israel. While the American appreciates weak frothy coffee and are willing to pay as little as possible for it, Israelis are prepared to spend plenty of money for very strong coffee in tiny cups. In addition, Starbucks did not try to localize the flavor. Second, the bureaucracy: the caf managers suffered from a lack of freedom. For example, managers who cannot replace a customer's coffee without a signature of an executive supervisor, loses many of his customers and the ability to promise them satisfaction. Third, Starbucks Israel's strategy did not create branding. The company spread over five different areas, instead of locating few branches in one area. The physical distance was too great.

I would like to suggest you a few strategies to succeed entering the Israeli market. 1. Starbucks needs to try to fit as possible as it can the company's products to the Israeli public. For example, Israelis like their coffee strong. Another factor that should be considered is the warm climate, the company can lunched matching products. 2. The Israelis love to get a great value for his money. Therefore, Starbucks needs to pay promotion and to give discounts for new clients. 3. The Israeli customers want to know that in any time of the day he can buy his coffee. I suggest you to open stores that will work twenty four seven. This kind of store will be an innovation in the Israeli coffee market, thanks to the fact that are very few stores in this format exist in Israel this days.

I hope that this information will help you to do the right conclusion, context to the idea of reopening Starbucks stores in Israel. Hope to hear from you as soon as possible and to plan our company next steps.

Homework No. 2 / Starbucks Marketing

Student Name(s) and ID#

Hadas Natanson 301681748 Dor Berger 300462967

Class [Day & Time]: Grade: __________

Wednesday 16:00 18:30

Point breakdown:
POINTS

Part I Background Part II - SWOT Analysis Part III Marketing Memo Components Format & Structure and general content Name of 2 executives a) Justification for Israeli market b) 3 main failures c) 3 marketing strategies, adv. & disadv. Terminology Spelling & Grammar Subtotal Points: /16 / 2

/5 /32

/ 4 + 2 extra / 9 /21 /8 /8 /68+2