...statements of two companies in the specialty coffee industry: Peet’s Coffee & Tea, Inc. and Starbucks Corporation. Through this paper I hope to learn more about the purpose, operations and general success of the companies in comparison to one another. Founded in 1971, Peet’s Coffee & Tea, Inc. is a self-described “specialty coffee roaster and marketer of fresh roasted whole bean coffee and tea” (as stated in its financial statements). Peet’s coffee is distributed through many channels which include grocery stores, home delivery, office accounts – where Peet’s sells to specialty distributors who in turn sell their products for brewing to individual offices – restaurant and food accounts, and also company-owned and operated stores. As far as their retail stores, Peet’s currently has around 192 stores in 6 different states, based out of California. Peet’s stores also sell whole bean coffees, general beverages, pastries, tea and other food related items (which are purchased from third party retailers). Peet’s coffee is carving its niche in the specialty coffee business, fighting against all of the other players in the game, mainly Starbucks (which is considered their main competitor). Due to the fact that no business goes without some risk, Peet’s details a list of risk factors which would greatly affect its ability to do business. These risk factors are listed in the financial statements, and some of these risk factors are very individual to Peet’s due to their position of being a growing...
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...UnitedStates, followed by nearly 1,000 inCanadaand more than 800 inJapan. Starbucks sellsdrip brewed coffee,espresso-based hot drinks, other hot and cold drinks, snacks, and items such as mugs and coffee beans. Through theStarbucks Entertainment division andHear Musicbrand, the company alsomarkets books,music, and film. Many of the company's products are seasonal or specific to the locality of the store. Starbucks-brandice creamand coffee arealso offered at grocery stores. Starbucks’ Italian style coffee, espressobeverages, teas, pastries and confections had made Starbucks one of thegreatest retailing stories of recent history and world’s biggest specialty coffeechain. In 2003, Starbucks made the fortune 500. The inspiration for the Starbucks enterprise was a Dutch immigrant, Alfred Peet, who had begun importing fine arabica coffees into the United States during the 1950s. Peet viewed coffee as a fine winemaker views grapes, appraising it in terms of country of origin, estates, and harvests. Peet had opened a small store, Peet's Coffee and Tea, in Berkeley, California, in 1966 and had cultivated a loyal clientele. Peet's store specialized in importing fine coffees and teas, dark-roasting its own beans the European way to bring out their full flavor, and teaching customers how to grind the beans and make freshly brewed coffee at home. Baldwin, Siegel, and Bowker were well acquainted with Peet's expertise, having visited his store on numerous occasions and spent many hours listening to...
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...Michelle Ton 1 Executive Summary Starbucks Corporation has arguably been the most successful coffee chain in the past few decades, using their aggressive expansion strategies to push out much of its competition. Through its expansion, Starbucks has focused on creating a dense network of stores all around America, while also opening up new locations all around the world. By leading the retail coffee market, Starbucks is able to sell its coffee for a premium price and increase their profitability. Its success can be seen in the gradual rise of its stock prices from 1992 – 2007, reaching almost 6000% of their initial public offering 1 . Yet, in the recent year, the market has shown Starbucks to be in constant decline, as their stock has dropped about $15/share, a value they have been above since 2004. Also, looking at Starbucks’ SEC filings, we can see that its comparable store sales have decreased significantly in US markets since 2004. This has prompted Team Macchiato to evaluate Starbucks’ current strategies in addition to the retail coffee market as a whole. To evaluate the problem, one of the biggest questions to consider is to what extent is the “designer coffee” market just a fad. In other words, will the allure of gourmet Starbucks coffee be maintained or will more appealing options threaten the success of Starbucks’ primary product? If the designer coffee market is indeed a fad industry, we need to evaluate Starbucks’ possible options to avoid further decline...
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...years as the company's CEO. The company had enjoyed phenomenal growth and become one of the great retailing stories of recent history by making exceptional coffee drinks and selling dark-roasted coffee beans and coffee-making equipment that would allow customers to brew an exceptional cup of coffee at home. The Starbucks brand was regarded as one of the best known and most potent brand names in America and the company had firmly established itself as the dominant retailer, roaster, and brand of specialty coffee in North America. It already had over 1,500 stores in North America and the Pacific Rim and was opening new ones at a rate of more than one per day. Sales in fiscal year 1997 were a record $967 million and profits reached an all-time high of $57.4 million. The company's closest competitor had fewer than 300 retail locations. And since going public in 1992, Starbucks has seen its stock price increase nearly ninefold. Exhibit 1 contains a summary of Starbucks key performance statistics for the 1992–97 period. Company Background Starbucks began in 1971 when three academics—English teacher Jerry Baldwin, history teacher Zev Siegel, and writer Gordon Bowker—opened a store called Starbucks Coffee, Tea, and Spice in the touristy Pikes Place Market in Seattle. The three partners shared a love of fine coffees and exotic teas and believed they could build a clientele in Seattle much like that which had already emerged in the San Francisco Bay area. Each invested $1,350 and borrowed...
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...Michelle Ton 1 Executive Summary Starbucks Corporation has arguably been the most successful coffee chain in the past few decades, using their aggressive expansion strategies to push out much of its competition. Through its expansion, Starbucks has focused on creating a dense network of stores all around America, while also opening up new locations all around the world. By leading the retail coffee market, Starbucks is able to sell its coffee for a premium price and increase their profitability. Its success can be seen in the gradual rise of its stock prices from 1992 – 2007, reaching almost 6000% of their initial public offering 1 . Yet, in the recent year, the market has shown Starbucks to be in constant decline, as their stock has dropped about $15/share, a value they have been above since 2004. Also, looking at Starbucks’ SEC filings, we can see that its comparable store sales have decreased significantly in US markets since 2004. This has prompted Team Macchiato to evaluate Starbucks’ current strategies in addition to the retail coffee market as a whole. To evaluate the problem, one of the biggest questions to consider is to what extent is the “designer coffee” market just a fad. In other words, will the allure of gourmet Starbucks coffee be maintained or will more appealing options threaten the success of Starbucks’ primary product? If the designer coffee market is indeed a fad industry, we need to evaluate Starbucks’ possible options to avoid further decline...
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...History, and Overview (Megan Schneider) Starbucks is the largest coffee specialty chain in the world. It has operations in over 60 countries. With over 190,000 employees in just the United States, its net revenue is 2014 was $16,447,800,000 (Long, Jacques, Kepos 2014). Not only is coffee sold, but other beverages, teas and fresh food items are sold as well. Not only is Starbucks sold within their shops, it is also sold in grocery stores, food services and licensed stores. Starbucks also owns Seattle’s Best Coffee, Starbucks Refreshers, Tazo, Teavana, and Verismo (Long, Jacques, Kepos 2014). Starbucks was founded in Seattle, Washington in 1971 by Gordon Bowker, Jerry Baldwin and Zev Siegl. The first store was built and opened in Pike Place Marketing in 1971 in Seattle (Long, Jacques, Kepos 2014). They invested only $9,050 to start it. The trio chose the name Starbucks because they liked the “ST” sound and the first mate in the story Moby Dick who loved coffee (Long, Jacques, Kepos 2014). Zev Siegl traveled to California to study coffee from Alfred Peet, who ran Peet’s Coffee in Berkeley. Local coffee drinkers in the Berkeley area flocked to Peet’s coffee because of Alfred’s use of the coffee beans. Peet’s approach is what created Starbucks’ reputation: Arabica beans, roasted as dark as possible by a trained roaster who is also a perfectionist (Long, Jacques, Kepos 2014). Starbucks purchased Peet’s coffee for its first nine months of operations. Within the next year...
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...Project Questions BA 211 Company Name: | PEET’S COFFEE & TEA, INC. | Team Members: | Anthony Porreco | | Jessica Cha | | Jillian Thomas | | Cameron Andrews | | | Complete the following information: 1. Basic Company Facts a. Name of Firm: | PEET’S COFFEE & TEA, INC. | b. Stock Ticker Symbol: | ‘‘PEET’’ | c. Stock exchange where traded: | Nasdaq National Market | d. Web site | http://www.peets.com/ | e. State of Incorporation | Washington | f. Independent Auditor | Deloitte & Touche LLP | g. Company’s Fiscal Year End | January 2nd, 2011 | | 2. List up to five products or services your company sells or provides. Products | | | Coffee | | Gift Cards | Tea | | “Sweets” (Chocolates, cookies, etc.) | Espresso Equipment | | | Tea Accessories | | | Coffee Mugs | | | 3. Size of Company. a. Dollar amount of Assets: | 44,629 | b. Dollar amount of Sales/Revenues: | 333,808 | c. Net Income: | 17,501 | d. Basic Earnings per Share: | 13,038 | e. Number of Common Shares outstanding: | 13,063 | 4. Use the financial highlights section of your company’s annual report to note the following information. (Note: FYE may need to be adjusted depending on most recent information available) Item | | FYE 2010 | | FYE 2009 | | FYE 2008 | | FYE 2007 | Net Income | $ | 17,501 | $ | 19,252 | $ | 11,165 | $ | 8,377 | Total...
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...Situation Analysis: Company Starbucks is a leading international coffeehouse that was founded in the year 1971 and acquired by Howard Schultz, the CEO of the company, in 1987. It has shaped the American culture by altering what we pay for coffee, what we eat, where we meet and how people spend their time socially. It rose from a single location in Seattle to a multibillion-dollar enterprise that operated in more than 17,000 retail stores in fifty countries. Originally Starbucks only sold coffee beans and ground coffee and later on came up with prepared coffee, Italian-style expresso beverages, cold blended drinks, food items, premium-teas, and beverage-related accessories and equipment. However, as the brand moved into new markets because of its aggressive growth strategy, its activities in the retail coffee shops were weakened and this made it more vulnerable to competitive threats from both higher as well as lower quality entrants. Therefore, it had to make decisions on vertical integration related to its expansion into the Consumer Packaged Goods domain. Collaborators The first product of Starbucks was sold through mass distribution channels such as Kraft, Dreyer’s and Pepsi. It also expanded product distribution through licensing agreements with United Airlines and Hyatt. Starbucks also expanded its retail stores. By 2008, 16% of Starbucks revenues came from sources other than the company-owned retail stores. Customers When Starbucks began in the early nineties, the...
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...neighborhood coffee shop, Starbucks Coffee Company has become synomous with quality products and service. Whether you are Generation X or part of Generation Y, the working class and the technologically advanced youth has embraced what Starbucks has to offer - even if they have to stand a half an hour in line to get it. But once you are sipping your venti decaf, non-fat, sugar-free vanilla latte with no foam, do you ever wonder how it all started? Do you know of Starbucks history, and why people of all ages were willing to pay nearly $6.00 for something that is seemingly worth a lot less? Starbucks Marketing Strategy implements many of the high ideals within the Starbucks mission statement . These motivating factors are largely responsible for this franchise's success. Like successful franchises (i.e. MacDonalds), Starbucks started with a vison that was followed through to the end. And, just as in other highly success ventures, the leaders that held the Starbuck's vision, have not rested on its laurels. Starbucks Coffee Company is still expanding in interesting and groundbreaking ways even today. The environmentally conscious Starbucks Corporate Social Responsibilty statement speaks to a new breed of businesses that care about their carbon footprint. With the influence of this forward-thinking company, and its consistently innovative approach to each viral marketing campaign - others companies should start taking notes. It All Started with a Passion for Fresh Coffee Starbucks...
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...specialty coffee in North America. Its operations include upwards of 2,400 coffee shops and kiosks in the United States and Canada, more than 100 in the United Kingdom, and more than 200 in other countries, including China, Japan, Kuwait, Lebanon, New Zealand, Malaysia, the Philippines, Singapore, South Korea, Taiwan, and Thailand. In addition to a variety of coffees and coffee drinks, Starbucks shops also feature Tazo teas; pastries and other food items; and espresso machines, coffee brewers, and other assorted items. The company also sells many of these products via mail order and online at starbucks.com. It also wholesales its coffee to restaurants, businesses, education and healthcare institutions, hotels, and airlines. Through a joint venture with Pepsi-Cola Company, Starbucks bottles Frappuccino beverages and sells them through supermarkets and convenience and drugstores. Through a partnership with Kraft Foods, Inc., the company sells Starbucks whole bean and ground coffee into grocery, warehouse club, and mass merchandise stores. A third joint venture is with Dreyer's Grand Ice Cream. In addition, it distributes Starbucks premium coffee ice creams to U.S. supermarkets. From a single small store that opened in 1971 to its status as a gourmet coffee giant at the turn of the millennium, Starbucks has led a coffee revolution in the United States and beyond. Roots in Coffee Retailing and Wholesaling Starbucks was founded in Seattle, Washington, a haven for coffee aficionados...
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...Chelsi Fry I. Strategic Profile and Case Analysis PurposeIt is believed that Starbucks is not meeting our customers’ expectations in the area of customer satisfaction. It seems that some of the main concerns with customer satisfaction is improvements to our service and speed-of-service. When customers were asked the question, “Starbucks cares primarily about making money”, the answer “yes” went from 53% in 2000 to 61% in 2001. It became apparent that maybe we aren’t focusing on the right things if our customers believe we are only about making money. We’ve lost the connection between satisfying our customers and growing the business. | II. Situation Analysis - There are four types of individual analysis that must be conducted before any strategy can be considered for combating lower customer satisfaction rates. Furthermore, an analysis of these aspects may reveal a different strategic direction that should be taken. The four areas that will be analyzed to complete the situation analysis are the general environment, the competitive environment, an internal analysis, and an industry analysis. | General environmental analysisIs the company’s general demographics shifting? Starbucks’ market research team discovered that our customer base was evolving. There have been newer customers that are younger, less educated, and in a lower income bracket than most of our usual customers. However, our affluent, well-educated, white collar female between the ages of...
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...Marketing Mix: Starbucks MKT/421 Marketing Mix: Starbucks When thinking about the companies that have had the most successful marketing strategies, Starbucks is one of the top companies. Starbucks is an international coffeehouse beverage chain that has become very successful. Their marketing strategies have allowed it to surpass other coffee offering outlets such as Peet’s Coffee and Dunkin’ Donuts. Starbucks has been able to capitalize on consumers wanting a quality coffee or tea beverage delivered at a reasonable price point. One of the key factors in their marketing strategy has been to cater to areas where consumers have a disposable income and a “want” for their products (“Starbucks Marketing”, 2013). Additionally, as revenues skyrocketed, Starbucks began offering their product at retail outlets. This enables any consumer to experience their product without even having to visit a local Starbucks coffee shop. This has proven to be a very successful venture for the company. Fiscal year 2011, boosted over 11 billion dollars in revenue for the coffee giant. None of this would have been possible without a successful marketing mix (“Starbucks”, 2012). Marketing mix The actual term marketing mix was first used back in 1940’s, but gained momentum in 1964. That year, Neil H. Borden published an article entitled The Concept of Marketing Mix that detailed the actual concepts of a marketing mix strategy. His initial idea contained around thirteen different...
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... Min-geuk Kim, Keehyung Kim, Yohan Jo, Huang, Qiuling, Dorjsuren Bayarmaa RE: Starbucks: Delivering Customer Service DATE: May 7, 2007 Market Analysis Starbucks provides the highest-quality coffee what it believes in the world. It has hundreds of product lines and the sales of beverage take the largest percent. Despite of Starbucks’ overwhelming presence and convenience, customers think there was just a little of image and product differentiation between Starbucks and the smaller coffee chains. However, Starbucks has an uncomplicated distribution strategy, and it tries to make customers get entrance to Starbucks products easier and provide more convenience to customers. Moreover, it has company-operated stores located in hightraffic and high-visibility and non-company retail channels. In addition, Starbucks has four major competitors. Minneapolis-based Caribou Coffee which provides the look and feel of an Alaskan lodge has more than 200 stores in nine states. California-based Peet’s Coffe&Tea - the freshest coffee is its strategy - has about 70 stores in five states. Others are Independent specialty coffee shops which offer beer, wine, liquor, satellite television, and internet-connected computers and, Donut and bagel chains like Dunkin Donuts offering flavored coffee and non-coffee alternatives. -1- For product innovation,...
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...The history of Starbucks starts back in 1971 when the first store opened in Seattle, Washington. Jerry Baldwin, Zev Siegl and Gordon Bowker got the idea from Alfred Peet (of Peet's Coffee fame). The store initially sold just coffee beans and coffee making equipment rather than the drinks they have become so famous. After about 10 years, Howard Schultz was hired as Director of Retail Operations and came to the conclusion that they should be selling drinks rather than just beans and machines. He couldn't convince the owners, so he went his own way to start the Il Giornale chain of coffee bars in 1986. The next year, Baldwin and the others sold Starbucks to Schultz who then renamed his Il Giornale locations to Starbucks and quickly started to expand. After conquering Seattle, the chain spreads across the United States and then internationally. The first location outside of North America was in Tokyo and they still have a sizable presence in Japan today. Over the course of its life, Starbucks has bought or acquired companies especially those specializing in coffee businesses. In the 1990s, Starbucks was offering stock options to employees and went public. Today, Starbucks has expanded to more than 17,000 stores in 55 countries around the world. Their biggest presence is still in the United States, with 11,000 locations. You can find a Starbucks in such diverse nations as Chile, Romania, Bahrain and Bulgaria. The most recent expansion was to Budapest in June of 2010. ...
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...Case Note – Starbucks: A Story of Growth 1. What was the coffee industry like in the US when Starbucks was first introduced? (Use Porters forces to analyze) • Most American coffee drinkers drank home-brewed coffee, ordered at restaurants, bought from convenience stores or gas stations • In San Francisco and New York, local coffeehouses and coffee rosters had recently been established such as Peet’s • By 1982, Starbucks only sold beans and supplies for brewing coffee at home, but not prepared beverages • America lacked the places that offering high-quality coffee for conversation and socializing • Starbucks was acquired including its retail outlets, coffee roasting facilities, and wholesale operation • Starbucks coffee was different from the coffee most Americans were used to consuming • More expensive, and taste differently from typical American coffee • Wealthy and highly educated professional workers, the new American elite, the “bobos” who used consumption as a way to distinguish themselves from the less enlightened masses 2. During Starbucks period of rapid store expansion, what strategic changes facilitated growth? What was gained—or given up—as a result of each change? Two initiatives • Selling Starbucks products through mass distribution channels o Brought Frappuccino coffee drink to market through a joint venture with Pepsi-Cola North America Helped by Pepsi’s expertise in managing store supply and demand Starbucks retained control over the development...
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