...1985, Starbucks is one of the largest coffeehouse companies in the world, with over 16,000 stores in 50 countries (Starbucks Annual Report, 2009, p. 1). Starbucks sells high-quality whole coffee beans along with fresh, rich-brewed coffees, cold blended beverages, a variety of complimentary foods, coffee related accessories and a selection of premium teas primarily through Company-operated retail stores (Starbucks Annual Report, 2009, p. 1). In May 1998, Starbucks successfully entered the European market through its acquisition of 65 Seattle Coffee Company stores in the UK (Starbucks, 2009). In 1998, since opening its first UK store in London, Starbucks has been growing rapidly at a steady rate with over 660 stores opened by the end of 2009 (Starbucks Annual Report, 2009, p. 3). This report aims to evaluate major internal and external factors affecting Starbucks using different environmental analysis methods such as SWOT analysis, Porters Five Forces and PESTLE Analysis. It will be based on the Starbucks brand in UK, and will identify suitable marketing strategies for Starbucks to expand their business within the next two years. In line with the chosen marketing strategies, recommendations for the marketing mix will be discussed. ENVIRONMENTAL ANALYSIS Environmental analysis or situation analysis is a systematic...
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...I. Strategic Profile and Case Analysis Purpose Starbucks has always been the famous coffee shop in the world. When people smell coffee the first thing that came into their minds is “Starbucks”. Starbucks starts in 1971 in Pike Place Market in Seattle, Washington. It wasn’t always about selling coffee drinks, before Howard Schultz was selling coffee beans and coffee machines not the coffee drink itself. Then for about 10 years he thought of a way of selling coffee since it became famous, with that he came up of opening a store named II Giornale. After a year, Jerry Baldwin, Zel Siegl and Gordon Bowker sell the name Starbucks to Schultz and quickly renamed II Giornale to Starbucks and started to expand across America. Now Starbucks has more than 11,000 stores in the United States alone and more than 17,000 stores around the world. Having so many stores, it became more available to the public. You can buy their coffee almost anywhere. With this kind of availability, the long lines where nowhere to be found. Coffee serving and production was fast. But having so many stores can make a huge impact. The convenience of the costumers was met, but the sales might make a huge loss. That is why the main purpose of this Case Study is to identify how having so many stores can make a huge impact on Starbucks’ demands and to prevent it from happening with making an action plan. Another purpose is to identify the latest perception of consumers that will make Starbucks innovate and focus on other...
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...8 Problem analysis – Case Starbucks 9 Factors leading to the decline in stock price between 2006-2009 9 Starbucks analysis using the 5 forces model 10 Rivalry among existing competitors 10 Threat of substitution products and services 11 Bargaining power of suppliers 11 Bargaining power of buyers 13 Threat of new entrants 14 Summary of the five forces analysis 14 SWOT analysis 15 Strengths 15 Weaknesses 16 Opportunities 16 Threats 17 Customer Value, Satisfaction and Loyalty 18 Generic strategies from Starbucks’s point of view 18 Conclusions 20 References 21 Introduction In the year 2000, Howard Schultz, a long term director of Starbucks left his position as the CEO. Starbucks was on a steady course and had its stock price on the rise until the year 2006. (lähde haastattelu) The global financial crisis hit the coffee giant relatively harder than other companies in the business sector (lähde annual report 2010). In early 2008, due to the poor performance of Starbucks, Howard Schultz felt compelled to return in to the CEO’s position, as Schultz mentioned in his interview for Harvard Business Report in 2010 “The leadership had failed the 180,000 Starbucks people and their families.” (lähde haastattelu). The global financial crisis in itself does not explain the poor performance of Starbucks, stock prices dropped below the NASDAQ index. Poor decision making in strategy and management caused the company to fall into a deeper crisis. Changes in...
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...EXECUTIVE SUMMERY This paper is focused on the case study of Black Canyon Coffee in 2003, a coffee company that started operating in 1993 in Bangkok. His Founder and managerial director Pravit C, wanted to enter the coffee market with a western style of coffee shop in Thailand one of the most important markets in Asia. The success of the company can be measured with the 78 outlets, 1000 staffs and with 15% to 20% average annual growth. Also BCC’S strategy has succeeded in Thailand, differentiation its business from competitors, offering a wide range of products and facilities to coffee lover. The company during 1993 and 2003 has developed its strategy based on the internal and internal analysis so the following paragraphs will summarized what makes BCC so special and how the company has survived even after the crisis that stroked Asia in 1997. And concluding with the current strategy priorities of the company with the main objective of leading the Thai and Asian market and expand the business to Middle East, Europe and the Americas. This report is divided in three parts that will analysis the current situation of BCC and its strategy, the first part covers the external environment analysis of the company, the second part is related to strengths and weaknesses and how the company is responding to the eternal environment and the third part concerns about BCC’S strategy priority. This analysis determines which goals the company should pursue in following years, founder Pravit...
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...Introduction and Facts about Starbucks 4 3. Impact on Business Trade 7 4. Strategic Issue Analysis 8 5. SWOT Analysis 9 5.1 Strengths 9 5.2 Weaknesses 10 5.3 Opportunities 11 5.4 Threats 12 6. Conclusion & Future Trends 13 References 15 1. Organization´s Historical Development In 2011 the worldwide most well known coffeehouse company celebrated their 40th anniversary. Worldwide, approximately 35 million customers visit a Starbucks coffeehouse each week. Starbucks Coffee Company was founded in 1971 with its first store in Seattle´s Pike Place Market. (Starbucks Company Profile, 2012). The company was established by three partners: the english teacher Jerry Baldwin, the history teacher Zev Siegl, and the writer Gordon Bowker. The three coffee lovers were inspired by coffee roasting businessman Alfred H. Peet, whom they knew personally, to sell high-quality coffee beans and equipment. (Starbucks Company Profile, 2012). Alfred H. Peet was a Netherlands - United States businessman and the founder of Peet's Coffee & Tea in Berkeley, California, in the year 1966. Mr. Peet is most famous for introducing custom Coffee roasting to the United States (Marshall, 2007). The original name of the today well known company “Starbucks” was “Starbucks Coffee, Tea and Spices”, which was later changed to Starbucks Coffee Company. The name “Starbucks” was originally named after the first mate in Hermann Melville´s...
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...automatically think of strong coffee; Starbucks is more than just coffee. This company offers an appealing atmosphere and friendly helpful staff to assist customers with various services. Not only does Starbucks offer exceptional customer service they also pride themselves in offering an excellent working environment and benefits to their employees. Starbucks’ mission statement states: “Establish Starbucks as the premier purveyor of the finest coffee in the world while maintaining our uncompromising principles while we grow. The following six guiding principles will help us measure the appropriateness of our decisions: - Provide a great work environment and treat each other with respect and dignity. - Embrace diversity as an essential component in the way we do business. - Apply the highest standards of excellence to the purchasing, roasting and fresh delivery of our coffee. - Develop enthusiastically satisfied customers all of the time. - Contribute positively to our communities and our environment. - Recognize that profitability is essential to our future success.” In order to maintain this mission many steps are taken to enhance each store within the vast company.” (Starbuck Corporation, Fiscal 2011 Annual report) Starbuck’s main competition is McDonald’s McCafe and then Dunkin Donuts Coffee. McDonald’s McCafe is marketing its low price strategy, while Dunkin Donuts, is offering that it simply has a better coffee and more on its menu to go with its coffee. Starbuck’s known...
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...External and Internal Environmental Analysis Introduction Starbucks is a coffee company based in Seattle Washington. It was founded in 1971 by three entrepreneurs, based on the idea of selling coffee beans. After substantial growth, they decided to open five stores with roasting facilities and start selling coffee beans to local restaurants. In 1987 the company was sold to Howard Schultz for $4 million, who saw a different future for the company after expanding it to 3 more stores. The company suffered a financial crisis due to mostly to the coast of its operations overhead. Despite all of that the company was able to open up 870 more stores by the year 1996, and by the year 2000 it has already 2000 stores worldwide. Much of Starbucks success is due to its employee’s treatment, their training and the way they run the company without managerial supervision. They feel part of the company and Starbucks trust their decisions in running the business. This philosophy has paid back tremendously. Starbucks is one of the fastest growing companies in the world with stores opening in Russia, China, India and remote parts of the world like Africa and South America. Internal and External Analysis The SWOT analysis is a method used to evaluate the external and internal environmental factors affecting the company wellbeing. SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. The Strengths and Weaknesses are part of the internal evaluation. Opportunities...
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...PURPOSE OF A SWOT ANALYSIS 1 The Purpose of a SWOT Analysis Charles Anderson Joyner III Grantham University PURPOSE OF A SWOT ANALYSIS 2 Abstract Every business to include the largest ones that control their areas of industry--has a limited supply of manpower, production capacity and capital. Evaluating the company’s strengths, weaknesses, opportunities, and threats helps it determine how to allocate these resources in a manner that will result in the highest possible potential for revenue growth and profitability. The management team examines where the company can compete most effectively. The company more times than not discovers competitive strengths that have not been fully utilized in the past in addition to critical areas that needs to be improved in order for the business to more effectively compete. A realistic assessment also prevents strategic blunders like entering a market with products that are clearly inferior to what well-entrenched competitors are offering. Continuous improvement in all areas of a company’s operations is an important aspect of staying ahead of competitors. Weaknesses and opportunities can--and must--be turned into future strengths. PURPOSE OF A SWOT ANALYSIS ...
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...Globalizations June 2008, Vol. 5, No. 2, pp. 259 –274 Are Sustainable Coffee Certifications Enough to Secure Farmer Livelihoods? The Millenium Development Goals and Nicaragua’s Fair Trade Cooperatives ´ ´ CHRISTOPHER M. BACONÃ , V. ERNESTO MENDEZÃÃ , MARIA ´ EUGENIA FLORES GOMEZÃÃÃ , DOUGLAS STUARTÃÃÃÃ , & SANDRO ´ ´ RAUL DIAZ FLORESÃÃÃÃÃ Ã University of California, Santa Cruz, USA University of Vermont, USA ÃÃÃ ´ Asociacion de Mujeres Contra La Violencia, Oyanka, Jalapa, Nicaragua ÃÃÃÃ Universidad Nacional Autonoma de Nicaragua, Nicaragua ÃÃÃÃÃ ´ ´ CII-ASDENIC, Edificio Casa Estelı, Estelı, Nicaragua ÃÃ ABSTRACT In December 2001, green coffee commodity prices hit a 30-year low. This deepened the livelihood crisis for millions of coffee farmers and rural communities. The specialty coffee industry responded by scaling up several sustainable coffee certification programs, including Fair Trade. This study uses household- and community-level research conducted in Nicaragua from 2000 to 2006 to assess the response to the post-1999 coffee crisis. A participatory action research team surveyed 177 households selling into conventional and Fair Trade markets in 2006. In an effort to dialogue with specialty coffee industry and mainstream development agencies, results are framed within the context of the United Nations Millennium Development Goals. Findings suggest that households connected to Fair Trade cooperatives experienced several positive impacts...
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...2. LITERATURE REVIEW. In the context of India’s tea export, there exists vast literatures .But for this study we have included some of the important empirical works which are matched with our objectives. Chand and Tiwari,(1991),analyzead growth and instability of India’s export and import of agricultural commodities. Jaganathan , (1992) , in his paper examined the instabilities of export earnings of selected groups and selected commodities and all the commodities from the period 1974-75 to 1989-1990. Pal , (1992) , analyzed the magnitude , causes and effects of instability of agricultural export earnings of India for the period 1979 to 1989.Subramaniam , (1995) , analyzed the impact of fluctuations in tea production and exports on international tea trade .He articulated that India plays a significant role in world tea trade , being the world’s largest producer , consumer , and exporter . Therefore , fluctuations in India’s tea production , consumption and exports are enough to disturb international tea trade . Aiello , (1999) , analyzed that the effects of export earnings instability on economic growth of developing countries has long interested economists for several reasons . Reddy , (2001) , examined global demand for and supply of tea by estimating semi – log trends separately using data of the recent past , 1974 to 1988 , on the area under cultivation of tea , production , export and retention of tea for domestic consumption . Debraj , (2003) , in a column...
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...segmentation including the customer segmentation and market segmentation that the company wants to target. In addition, the author also has to attach much importance to analyzing the microenvironment and macro environment in which the company is operating in. In addition, the author also mentions the positioning of the company in the market and suggests the application and development of a marketing mix strategy with a view to develop the company’s brand and image in the market. Introduction Nespresso Company has been considered a famous and prestigious coffee provider across the globe with the strong business presence in many countries world-wide. Nespresso has been the pioneering coffee provider in European market during the last 25 years. Nespresso aimed at expanding its market share to the American market by penetrating the market with the initiatives and changes in the coffee drinking habits, creating a premium large-cup coffee market in North America. The author has just been pooled as the Marketing Consultant of Nespresso Company. The biggest task of the author is to analyze the market to enable the company to develop an appropriate marketing mix strategy for the company. To fulfill this task, the author has to identify and analyze the microenvironment and macro-environment of the company and define the market position of the company. In addition, the customer and market segmentation to cater for customers’ diversified needs and desires and...
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...Business Culture and Strategy Outcome 1 Political Factors There are few political issues that are associated with Costa Coffee such as taxation policy; day by day, the government is increasing tax and this has affected the purchasing behaviour of consumers in the UK. Over the last two years, there has been a fluctuation in the VAT rate. First it was 17.5% until it decreased to 15% then it increased to 17.5% and then to 20% later in 2011. Because of this increase, it has augmented the price of products at Costa. If VAT (Value Added Tax) decreased, the products will become cheap for consumers, however, since it has been increasing; this has a negative impact on the sales due to increase on the price of products. There is high possibility preceding the changes in the political control also in the coffee suppliers, there is lack of coordination. | Economic FactorsIn 2008-2009, the UK government has cut the VAT rate as a result of economic crisis with the aim of expanding the sales and hurrying the recovery in the region. Although this helped the sales to increase to some extent through lowering the cost of price of products, the high number of unemployment during economic crisis has led to a decline in the buying power of consumers.There are some economic factors which can affect the market of Costa Coffee for UK. These are the factors through which the purchasing power of the potential clients is affected. The economy of UK has low inflation rate which is considered as the benefit...
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...Starbucks is a leading company and a niche in the coffee business, especially popular in the United States, Canada and Japan. Since inception in 1985, its growth has been attributed to its national and global expansion strategies, innovative product development and increasing sales in current markets (Starbucks Corporation, 2009, p.1). According to the 2009 annual report (Starbucks Corporation, 2009, p.2), the company’s 16,635 stores in over 50 countries generated $9.8 billion in revenue, a figure indicating a negative growth in sales. As a result, current restructuring efforts by CEO Howard Shultz aimed at increasing revenue to $23 billion by 2012 (Helm, 2007, para.4) have necessitated an evaluation of the business model and growth strategy. In this report, we will perform a SWOT analysis on Starbucks, followed by recommendations that can be implemented to improve the sales and strategies of the firm. 1.1 S.W.O.T Analysis Strengths * Starbucks has developed to outshine other coffee retailers in the market through its outstanding financial performance, and the ability to maintain its high end standards of offering premium and exotic coffee beverages. * They have managed to develop a “Starbucks culture” amongst customers by creating an atmosphere that makes the customers feel sophisticated, welcomed and more knowledgeable of their product information. When the customers feel that they are of top priority, it also helps to create a strong sense of loyalty...
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...Contents Introduction 3 PEST Analysis 4 References 8 Picture references 9 APENDIX A 10 APENDIX B 11 Introduction The coffee industry is a multi-billion dollar industry which is getting bigger and bigger each year. Coffee is a huge industry and is the second most traded product in the world after oil. Even though there is an economic crisis going on in many countries, there strong demand for coffee keeps rising. All the major companies including Starbucks are repeatedly raising prices and consumers are spending as normal. Starbucks is an international coffee chain and is the largest such company in the world. The industry that Starbucks can be placed in is within the speciality coffee industry. Starbucks total net revenues went up to $3.032 billion, up 15% on last year. As of January 2nd 2011, they have 17,009 stores worldwide operating in more than 50 different countries. Their products include coffee, hand crafted beverages, merchandise and fresh food. Within the speciality coffee industry there are many companies. Some of Starbucks competitors include 7-Eleven, Dunkin Donuts, Caribou Coffee and McDonalds which are all USA based. In the UK Starbucks main competitors would be Costa Coffee, Café Nero and McDonalds. On top of these big competitors there are countless small independently owned coffee shops. Competitors like 7-Eleven, Dunkin Donuts and McDonalds offer coffee at relatively low prices. These chains simply just sell coffee to customers who want it on the...
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...Starbucks Coffee Company Teaching Note Overview The Starbucks Coffee Company case offers students an opportunity to explore the tradeoffs between a successful business strategy (in this case, its focus on the purchase of the highest quality coffee, which is at the heart of this business) and the company’s interest in maintaining and enhancing its reputation as a socially responsible company. The case focuses on the CEO, Orin Smith and his decision whether to purchase and offer fair trade coffee after being pressured by the Global Exchange, an NGO responsible in the 1990s for Nike’s difficulties in relation to unfair labor practices in developing nations. Questions to Begin the Case Discussion Students can approach this complicated case from many different angles, so questions should be tailored to the individual needs of the course you are teaching. Possible successful approaches include the following: 1. Focus on the factors in the environment affecting Starbuck’s decision. This allows you to explore comparison between Nike in the 1990s and Starbucks today. The company faces the risk of overexposure because of its incredible rate of growth. And, like WalMart, the company has been seen as a destroyer of smaller main street type businesses. It also represents American culture in distant lands in the same way that McDonalds did in the 1970s and 1980s. Its interest in presenting itself as a socially responsible company also makes it an easy target for antagonists like the Global...
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