Premium Essay

A Crack in the Mug

In: Business and Management

Submitted By claudiapt12
Words 1609
Pages 7
TABLE OF CONTENTS

EXECUTIVE SUMMARY 2
PROBLEM STAEMENT 3
SITUATION ANALYSIS 3
Background 3
Objectives and Goals 3
SWOT Analysis 4
MARKET ANALYSIS 4
Marketing Mix 4
COMPETITION ANALAYSIS 5
External Environment (PESTE) 5
CONSUMER ANALYSIS 6
Positioning Map 7
CASE KEYS 7
ALTERNATIVES – need more pros and cons 8
RECOMMENDATIONS 8
ACTION PLAN - TBD 9
CONTINGENCY PLAN -TBD 9
APPENDIX A – Competitor’s strength and weakness 10
APPENDIX B – Segmentation 11
REFERENCES 12

EXECUTIVE SUMMARY

Founded 1971, Starbucks started off as a bean roasting company. After a visit to Italy by Howard Schultz, he was determined to open an Italian style espresso bar. For the next 20 years, after the name had been purchased by Howard in 1987, there was a vast growth and expansion. With little competition, Starbucks was able to open a total of 15,011 stores in globally in which two-thirds were in the USA.

In 2007, Starbucks was hit with a financial crisis that plunged its shares around $19-$20. With a negative working capital caused by increase financial debt both short and long-term, the sharp expansion due to strategy shift may have caused targets in 2007 not to be met. As shareholders expectations were high, Shultz reclaimed is seat as CEO with intentions to steer the company back to focus on the customers and commitment to its community.

During the years of great success for Starbucks, there was little competition globally. Its direct competition in Canada was Second Cup and in the US was Pete’s Coffee & Tea. Both serving Italian style coffee and providing a warm home feeling, the competition was slow at expansion and had no chance to outgrow Starbucks. However, with Starbucks strategy to focus on international growth, McDonalds opened up their McCafe that became in direct competition with premium coffee. With lower prices in the fast food restaurant,

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