Coffee and Starbucks Essay Example for Free

chocolate and Starbucks Essay In 2006, the US based Starbucks Coffee Company, with over 11,000 stores in 36 countries was the No. 1 specialty coffee company in the world. Every week over 40 million guests visited Starbucks coffeehouses. afterward phenomenal success in the US, and revolutionizing specialty coffee culture, Starbucks undertook international expansion and popularized its specialty coffee global. In the 1990s, Starbucks concent graded its expansion efforts mainly in Asia. The initial pages of the case delineate the origin and growth of Starbucks as a company and a super brand and the strategies adopted by it. In 2002, Starbucks announced that it was cooking to enter India. Later it postponed its entry as it had entered China recently and was facing problems in japan. In 2003, there was news again that Starbucks was reviving its plans to enter India. In 2004, Starbucks officials visited India but according to sources they returned unconvinced as they could non crystallize on an appropriate partner for its entry. In mid 2006, Starbucks announced that they were all set to oblation the Starbucks follow out to Indians in the next 18 months. II. STRATEGIC POSTURE 1. flush. To inspire and nurture the human spirit one person, one cup and one approach at a time. Expansion to Asia foodstuff 2. OBJECTIVES We argon looking forward to offering the finest coffee in the world, handcrafted beverages, and the unique starbucks experience Our Coffee It has always been, and volition always be, slightly select. Were passionate about(predicate) ethically sourcing the finest coffee beans, roasting them with great care, and improving the lives of people who grow them. We care deeply about all of this our work is never done. Our Partners Were called partners, because its not just a job, its our passion.Together, we embrace diversity to create a place where apiece of us buttocks be ourselves. We always treat separately other with respec t and dignity. And we hold each other to that standard. Our Customers When we are fully engaged, we connect with, put-on with, and uplift the lives of our customers even if just for a few moments. Sure, it starts with the promise of a perfectly made beverage, but our work goes far beyond that. Its sincerely about human connection. Our Stores When our customers feel this sense of belonging, our stores become a stickn, a break from the worries outside, a place where you cornerstone meet with friends.Its about purpose at the speed of life several(prenominal)times slow and savored, sometimes faster. Always full of humanity. Our Neighborhood Every store is part of a community, and we take our duty to be good neighbors seriously. We want to be invited in wherever we do business. We can be a force for positive action bringing unneurotic our partners, customers, and the community to contribute every day. Now we see that our responsibility and our potential for good is e ven larger. The world is looking to Starbucks to set the new standard, yet again.We volition lead. Our Shareholders We know that as we deliver in each of these areas, we enjoy the kind of success that rewards our shareholders. We are fully account fitting to get each of these elements right so that Starbucks and everyone it touches can endure and thrive. 3. STRATEGIES International lead through joint professs, licenses or by company own operation Building critical relationship to gaining surplus market knowledge with government Consistency on serfeebleness and product Postioning in Premium market 4.POLICIES India had embarked on a series of economic reforms since 1991 that had ersulted in taller growth rates, lower inflation, and significant increase in foreign investment Indian government permitted Foreign Direct Investment (FDI) up to 51% in retail trade of single-brand products with prior government approval. III. STRATEGIC MANAGERS a. BOARD OF DIRECTORS Howard S chultz William (Bill) Bradley Starbucks Allen Company LLC founder, chairman, president and psyche executive officer managing director Robert M.Gates Mellody Hobson origin Secretary of Defense Ariel Investments, LLC president Kevin Johnson Olden Lee Juniper Networks, Inc. PepsiCo, Inc. chief executive officer retired executive Joshua Cooper Ramo James Shennan, Jr. Kissinger Associates Trinity Ventures vice chairman general partner emeritus Clara Shih Javier Teruel Hearsay Labs, Inc. Colgate Palmolive Company chief executive officer retired vice chairman Myron Ullman, III Craig Weatherup J. C. Penney Company, Inc.Pepsi-Cola Company retired chairman and chief executive officer retired chief executive officer b. TOP MANAGEMENT Starbucks is realigning its die wariness to help drive its international growth, continued to strengthen Starbucks top management team, hiring people with extensive experience in managing and expanding retail chains. IV. 6F 7S 6 FORCES 1. Customer bargaining power The customer bargaining power of starbuck is actually low. It is because Starbucks able to satisfy the needs of the customers by providing various type of coffee and beverages.In other hand, Starbucks alike fitting in with the beverages and food from each countries they are expand to, so that they dont have any problem in fulfilling the demand of the customers. 2. Supplier bargaining power Starbucks get their coffee from South America and Indonesia mostly as their main supplier. ground on that the supplier bargaining power is as well low since Starbucks demanding their own standard fof the mettlesome tonus coffee and also some other term that they set in order to sustain their products quality. 3. Other Stakeholder The other stakeholder for Starbucks is basically come fro mthe government andthe other social community. The government is only big(a) the regulation about the coffee bewray, while the other hand social community mostly protest against s tarbucks about their products with high sugar and fat that can caused obesity and diabetes. But, the other stakeholder bargainig power is still low over Starbucks. 4. Substitute The substitute for coffee as starbucks mostly offer as their own karyon products is low. It is because coffee is still favorable in some countries even though some parts in Asia prefer tea as their beverages, but Starbucks also could comply with it and keep growing and get profit from their coffee products.5. New Entrants For the new entrants for the resembling business area for starbucks is low. It is because some of the new entrants mostly can not compete with starbucks and mostly with small market share and retails. 6. Competitors betwixt firms As the competitors between firms for Starbucks is medium. The competitors is based on the India market. India has several coffee blackleg that provides the same services and products. Even though like that, Starbucks still get the upper hand on the situation, and for the American competitors, Starbucks has acquired some of their competitors, so that it wont affecting Starbucks.7S analytic thinking 1. Systems Starbucks has their own system in servicing the customers. The system is the store is established closured to each otehr in a cluster of crowded places. Each of the stores go forth have the baristas (coffee maker) which are professional. The baristas allow behave the customers. Beside that, Starbucks also prefer a non fume area retail and not allowing the staff to use a high fragrance in order not to distrub the coffee aroma. 2. Style The style of Starbucks is providing the coffee based on the italian style.They intent to make the coffee shop of Starbucks as the second home for the executive and also the other customers of their target market. They make the theme of the coffee shop as comfortable as in home with wooden decoration, opera and jazz musical which offer relaxing atmosphere. 3. Staff As for the staff of Starbucks, i t consists of 10,000 people that are spreading over 11,000 stores in 26 countries and it keeps growing from time to time as Starbucks are expanding their business to Asia. 4. Strategies For the strategies of Starbucks. At first they open the retail of their shops in a cluster of a crowded and strategic places.This is for making a high barrier over the new entrants or competitors. Another thing that Starbucks also use the strategies of their theme that are different from the other coffee shop which is more like second home rather than juz for drink n go coffee shop. 5. Skill Skills of Starbucks staf is on their baristas which is the professional coffee maker with talented and skillful ability in brewing the coffee. The baristas could make not only the plain coffee but also combining the art of design in the coffee they made as the decoration in order to make more prestige and nourish on their product. 6. StructureStarbucks is lead by CEO and each or region also have their CEO that w ill responsible to the Starbucks in America. Beside that they also have the staff and baristas 7. Shared Value The shared value of Starbucks is not to server and handle the coffee properly but also how to impart to customer, our passions for our products. Beside that the shared value of Starbucks is treating the customers very welll with the atmosphere of the shop so that they will feel like in second home situation. V. EXTERNAL ENVIRONMENT EFAS External strategic factors encumbrance evaluation weight score OPPORTUNITY fat the markets 0.09 4 0. 36 To position Starbucks as a leader in a new industry, and in a sense, 0. 09 4 0. 36 get a market about the quality of coffee, the experience and the idea of Starbucks India was ranked as the fourth largest economy in the world wrong 0. 07 5 0. 35 purchasing power parity and tenth most industrialized country in the world. The middle mob were increase in India 0. 1 4 0. 4 Drank coffee as a fashion statement 0. 07 3 0. 21 Growing interest in Hesperian consumer brand and luxury products 0. 06 3 0.18 THREAT High contention 0. 1 4 0. 4 By 2002, Starbucks incurred huge losses in its Nipponese operations 0. 06 3 0. 18 Another significant challenge that Starbucks could face was the 0. 05 3 0. 15 increasing rate of obesity in India High rate of rent and cost perseverance 0. 06 3 0. 18 Asian people is tea drinkers 0. 07 4 0. 28 Included inadequate infrastructure, beraucracy, regulatory and foreign 0. 09 4 0. 36 investment control Different culture, religion and regions 0. 09 4 0. 36 Total score 1 3. 77 .Based on EFAS- IFAS analysis we judgement that Starbuck should be on a growth strategy. Starbucks need to expansion to the Indian market and catch the opportunity by serving costumier needs because starbucks will be able to satisfy the desire for their coffee experience and build lot of stores to create brand awareness. Improve the network through creating joint venture wit h a lot of company in many specialties, like Maxims caterer, Beijing Mei Da Coffe Co. Ltd and Tata, and increasing quality and services. Using just growth in order to keep and improve its competitive position, control over scarce resource and guarantee quality.A. NATURAL ENVIRONMENT Starbucks has soil, water, pest, waste and dynamism management B. SOCIETAL ENVIRONMENT Politic India had embarked on a series of economic reforms since 1991 that had ersulted in higher growth rates, lower inflation, and significant increase in foreign investment Economic Many different prices High rent and cost of labor in Japan By 2005, China contributed to little less(prenominal) than 10 % of the global sales of Starbucks and by 2008, Starbuck expected to derive 20 % of its revenue from Chinese locations Social culture High quality of service and customer satisfaction. In Italy, the decor of the store and the menu were covered based on feedback from customers Its employees were required to refr ain from using strong perfumes that could adversely the aroma of its coffee Starbucks has woodland and biodiversity conservation to workers welfare, living conditions, health, safety, etc In 2005, Starbucks announces plans to donate funds and supplies to the Hurricane Katrina relief effort Technology In 2004, XM Satelite Radio and Starbucks announced the debut the Starbucks Hear Music line of products on XM Radio Environmental Starbucks has soil, water, pest, waste and energy management Legal. Starbucks licensed Marriot and Aramark to open Starbucks outlets Starbucks maintained a non smoking policy at all its outlets worldwide VI. INTERNAL ENVIRONMENT IFAS Internal strategic factors weight rating weight score STRENGTH The worlds No. 1 specialty coffee retailer 0. 1 5 0. 5 Has high quality of coffee 0. 2 5 1 Starbucks became the majority owner of its operations in Confederate China 0. 08 3 0. 24 Has unique concept and atmosphere to create a new coffee experience 0. 1 4 0. 4 Has uncompromising quality control worldwide so the adjudicate remains the same 0.11 5 0. 55 WEAKNESS Too many market 0. 08 3 0. 24 Starbucks was opening stores too close each 0. 1 3 0. 3 The no smoking policy made many competitors took advantage and include an 0. 15 4 0. 6 elaborate food menu with coffee and had speciate smoking areas Didnt have own roasting in Japan 0. 08 3 0. 24 Total score 1 4. 07 A. CORPORATE STRUCTURE Divisional structure B. CORPORATE CULTURE Commitment to quality Teach baristas not only to handle coffee properly, but also how to impart to customers our passion for our products. Opposed the concept of franchising Word of mouth promotion C. CORPORATE RESOURCES 1. Marketing Expand the business to grow their market share in regional and global section emplacement in premium market. Extent product line portfolio. promotional activities to create brand awareness and introducing Coffe with high quality 2. Finance Creating strategic allia nces by joint venture. Reduce the price but not below the disputation level Making acquisition with some big companies 3. Operation Managing supply lines Creating more efficience resources 4. Research and Development. Developmnet of RD to create more innovative and unique products (food and beverags) 5. Human Resources Maintaining the baristas to serve the coffee without losing the quality of service. VII. ANALYSIS OF STRATEGIC FACTORS A. SITUATIONAL ANALYSIS STRENGTH The worlds No. 1 specialty coffee retailer Has high quality of coffee Starbucks became the majority owner of its operations in Southern China Has unique concept and atmosphere to create a new coffee experience Has strict quality control worldwide so the taste remains the same WEAKNESS Too many market Starbucks was opening stores too close each other. The no smoking policy made many competitors took advantage and include an elaborate food menu with coffee and had separate smoking areas Didnt have own roa sting in Japan OPPORTUNITY Expand the markets To position Starbucks as a leader in a new industry, and in a sense, educate a market about the quality of coffee, the experience and the idea of Starbucks India was ranked as the fourth largest economy in the world terms purchasing power parity and tenth most industrialized country in the world. The middle class is increase in India Drank coffee as a fashion statement Growing interest in western consumer brand and luxury products THREAT High argument By 2002, Starbucks incurred huge losses in its Japanese operations Another significant challenge that Starbucks could face was the increasing rate of obesity in India High rate of rent and cost labor Asian people is tea drinkers Included inadequate infrastructure, beraucracy, regulatory and foreign investment control Different culture, religion and regions SFAS. duration Strategic Factors weight rating weight score short intermediate long S5 Has strict quality control 0. 12 4 0. 48 X worldwide so the taste remains the same W2 Starbuck was opening store too 0. 1 3 0. 3 X X close each other W3 The no smoking policy made 0. 13 3 0. 39 X X many competitors took advantage and included an elaborate food menu with coffee and had separate smoking areas O2 To position Starbucks as a 0.13 4 0. 52 X leader in a new industry, and in a sense, educate a market about the quality of coffee, the experience and the idea of Starbucks O4 The middle class were increased0. 1 3 0. 3 X X in India T4 Asian people is tea drinkers 0. 14 4 0. 56 X X T5 Included inadequate 0. 14 4 0. 56 X X infrastructure, beraucracy, regulatory and foreign investment control total score 1 3.81 Based on the SFAS table that have been created there are some strategic strong point from Starbucks such as they have a famous brand image with high quality of coffee with stri ct quality control. As for the weakness, they are opening store too close each other so it will make a strict competition between starbucks itself and make self cannibalization. Another weekness starbuck has The no smoking policy made many competitors took advantage and included an elaborate food menu with coffee and had separate smoking areas.Whereas that market are potential to gain profit. Based on BMJ (British Medical Journal) 154 million men and 41 million women in India are smokers. Based from the Strengths and Weaknesses that Starbucks have, there also Opportunities that Starbucks position as a leader in a new industry, and in a sense, educate a market about the quality of coffee, the experience and the idea of Starbucks. Second opportunities Starbuck has is the middle class are increasing in India and was estimated at around 250 million and was growing in picture digits in urban and second tier cities.For the Threats that Starbuck might encounter if they want to expand in I ndia Market are Asian people especially Indian are tea drinker and Included inadequate infrastructure, bureaucracy, regulatory and foreign investment control TOWS ANALYSIS Internal factor Strenghts Weakness The worlds No. 1 specialty coffee Too many market retailer Starbucks was opening stores too close Has high quality of coffee each Has unique concept and atmosphere to The no smoking policy made many create a new coffee experience competitors took advantage and included an Has strict quality control worldwide elaborate food menu with coffee and had so the taste remains the same separate smoking areas Didnt have own roasting in Japan Eksternal factor Opportunity S-O strategy W-O strategy Expand the markets Creating Joint Venture with other Develop turning point product To position Starbucks as a leader in a new company in many specialities Maintaining the quality of product and industry, and in a sense, educate a market Building critical relationshi p to excellent services about the quality of coffee, the experience gaining additional market knowledge disjunct room for smokers and elaborated and the idea of Starbucks with government food menu India was ranked as the fourth largest Consistency on service and product economy in the world terms purchasing power Postioning in Premium market parity and tenth most industrialized country in the world. The middle class were increased in India Drank coffee as a fashion statement Growing interest in western consumer brand and luxury products Threat S-T schema W-T strategy High competition Extend their product line portfolio promotional activities to create brand By 2002, Starbucks incurred huge losses in awareness and introducing Coffe with high its Japanese operations quality Another significant challenge that Starbucks Reduce the price but not below the could face was the increasing rate of competition level obesity in India Match the coffee shop wit h the culture, High rate of rent and cost labor like they offer special Indian tea Asian people is tea drinkers Included inadequate infrastructure, bureaucracy, regulatory and foreign investment control Different culture, religion and regions B. REVIEW OF CURRENT MISSION AND OBJECTIVES Current appears appropriate Some of the objectives are really goals and need to be quantified VIII.STRATEGIC ALTERNATIVES AND RECOMMENDED STRATEGY a. STRATEGIC ALTERNATIVES Creating Joint Venture with other company in many specialities Building critical relationship to gaining additional market knowledge with government Consistency on service and product Postioning in Premium market Develop niche product Maintaining the quality of product and excellent services Separated room for smokers and elaborated food menu. Extend their product line portfolio Promotional activities to create brand awareness and introducing Coffe with high quality Reduce the price but not below the co mpetition level Match the coffee shop with the culture, like they offer special Indian tea b. RECOMMENDED STRATEGY Creating Joint Venture with other company in many specialities IX. IMPLEMENTATION Marketing.Objectives system course of instruction increase sales Building brand Expand the business to grow awareness their market share in regional and global section Positioning in premium market Extent product line portfolio Promotional activities to create brand awareness and introducing Coffee with high quality Finance .Objectives schema Program Increasing capital Building cooperartion Creating strategic alliances with other companies by joint venture Reduce the price but not below the competition level Making acquisition with some big companies Operation Objectives Strategy Program Developing better supply Managing suppliers Managing supply lines chain Creating more efficience resources planing management Research and Development .Objectives Strategy Program Developing innovative RD on the food and Developmnet of RD to create products beverages more innovative and unique products (food and beverags) Creating new products without losing the quality and tastes Human resources Objectives Strategy Program Improving and maintaining Better selection on Teaching the baristas from baristas skill and baristas recruitment professional service Awarding the baristas with the excellence consummation Matrix of Change pic X. EVALUATION AND CONTROL Using balance scorecard based on 4 perspectives Perspective Objective Measure Financial Increasing capital growth Total investment.Competitive price Acquisition Total sales Customer Improving customer satisfaction Customer satisfaction do speed /time Improving brand awareness and loyalty Market share Customer acquisition Customer retention Internal Business accomplish Developing innovative products New products (Food and beverages) D eveloping better supply chain Supply schedule Resource availability Alternative resources location .Growth and scholarship Enhance baristas skill and service Baristas in development asssignment Improve employees satisfaction Employees satisfaction and complaints Baristas recruitment dumbfound and service Output Provide a great work environment and treat each other respect and dignity Provide comfortable store environment with consistent products quality and good services.Low Low Low Other stakeholder Competitors Suppliers New Entrants Substitute Costumers Low Low Medium Financial costumer Internal business process Growth and learning.