Premium Essay

Starbucks - a New Sbu Product Line

In: Business and Management

Submitted By dqblackwell
Words 3108
Pages 13
MEMORANDUM
Date: May 28, 2011
To: VJ Mirsa, Manager
From: Ericka Bell, Dionne Blackwell, Steven Harper, Thomas Lentz, and Paul Breen
Re: Roasted Delivery – A New Starbucks SBU Product Line

INDUSTRY OVERVIEW
The coffee industry is one of the fastest growing industries in the world with an annual growth rate of 7% (Griffin, 1999). As of 2011 Americans consumed approximately 400 million cups of coffee per day, which is equal to about 146 billion cup of coffee per year. When put into the perspective of caffeine coffee represents 75% of all the caffeine consumed in the United States. While there are several different species of different coffee plants the two main species of coffee that are cultivated today are Arabica and Robusta coffee beans. Coffea Arabica also known as Arabica coffee accounts for approx. 75-80% of the current world’s production coffee. Coffea canephora also know as Robusta coffee currently accounts for 20% of all production in the world (Coffee Statistics, 2011). The specific café that Roasted Delivery chooses around the coffee industry was Starbuck.
MISSION AND STRATEGY OVERVIEW
Starbucks was first opened in 1971 as a single store in the Seattle’s historic Pike Place Market. In 1981 Howard Schultz (Starbucks chairman, CEO) joined Starbucks after first tasting a cup of their coffee. Starbucks with their current mission to inspire and nurture the human spirit – one person, one cup, and one neighborhood at a time has now found themselves with 15,000 stores existing in over 50 countries (Starbucks, 2011).
Starbucks strategy has been broken down in the following parts Coffee, Partners, Customers, Stores, Neighborhood, and Shareholders. When looking at Starbucks’ strategy with their coffee their main objective is to produce and provide quality. They look for the finest coffee beans and attempt to provide the best roast. When looking at...

Similar Documents

Premium Essay

Strategic Management & Business Policy (Starbucks)

...Strategic Management & Business Policy Week Two Assignment: Starbucks From its humble beginning to multi-billion dollar corporation, Starbucks has had its fair share of ups and downs. Many of which can be associated with the constant changes in public demand. By utilizing the SWOT, the company was able to not only tackle each of the obstacles it in countered, it managed to strengthen organization and stay ahead of the competition. SWOT is an acronym that stands for a company’s strengths, weaknesses, opportunities, and threats analysis. This analysis tool is used by the strategic business unit (SBU) to identify the company’s internal strengthens and weaknesses, as well as external opportunity or threats the company may encounter in the future (Marcus 2011). Companies use their strength to take advantage of the market and use it to increase their net earnings. By identifying weaknesses within the company, SBU is able to allocate resources to the under performing areas to improve productivity and income. Opportunities can sometimes be confused as threats, as there is usually some form of risk involved. This type of cautious business practice can hinder a company from reaching its full potential; it might also cause the firm to go out of business. In its infancy Starbucks was already ahead of its competition, created by three men with a passion for fine coffee and tea, the business offered the public a chance to experience coffee at its finest. At the time most coffee had...

Words: 1739 - Pages: 7

Premium Essay

Management of Organization and Marketing

...“Experience the Difference” In the last years I was fascinated by the rapid success of international companies such as Apple, Starbucks, Facebook and I was trying to find answers for these business phenomena. I started to ask myself: why are people in developed countries suddenly buying overpriced coffee from Starbucks Coffee Shops? Why is a company like Apple experiencing a business comeback after many years of mediocre performance in the personal computer business? Why are people thrilled to share their personal information on a social media platform and how can a company like Facebook make money with it? My answers to those questions are manifold, however whether these successes are based on smart strategic decisions, excellent marketing management or new business models, I would like to understand in a more detailed and structured way how international businesses are set up and performing. In today's fast changing mobile society I believe a fundamental expertise of international business processes and company strategies are a compulsory knowledge for an effective global business manager and leader in the future. In the following I would like to constitute a more precise understanding of the marketers’ world based on contemplation of the organizations point of view and additionally through an examination of the different roles of customers and especially consumer behaviour. I hope to connect the dots between both manifolds topics and at the end I am going to......

Words: 6218 - Pages: 25

Premium Essay

Strategy of Kfc

...INTRODUCTION This project puts in perspective the multinational company called Yum!Brands, which is an American company in the fast-food industry. We will be discussing about some aspects of this company generally, but we intend to give more details on the company Kentucky Fried Chicken(KFC) which is one of the Strategic Business Units (SBU) of Yum!Brands. We will give the profile of Yum!Brands and KFC, and also analyze the strategy of the company, its internal and external environment, its position vis-à-vis its competitors, its competitive advantage and how far it has come/how well it is doing today. We intend to focus on one local market, so in this project we are taking KFC China as our case study. We decided to choose Yum!Brands and specifically KFC as our project case study because we have noticed the rapid growth of the fast-food industry. Fast-food is a typical American trend which reflects the American eating culture of “grabbing a quick bite” so to speak. Today people are very busy, not only in America but all over the world. People have less time to sit and eat a home cooked meal, especially at lunch time when almost everyone is out of the house and working. The most convenient thing to do is to go for a “fast-food”. We noticed that this trend has even moved from being just a lunch-time substitute for home cooked meals to being a fun time meal between friends, colleagues and family. Some corporate bodies even order fast-food for meetings or corporate......

Words: 1643 - Pages: 7

Premium Essay

Biodiesel

...University of Greenwich Strategic Financial Management (FINA1035) Programme: UOG (3+0) BAAF Student ID: 000721005 Submission Date: 10th February 2014 Content Page 1. Introduction 3 Internal Analysis 2. Financial Analysis 4 3. Human Resource Management(HRM) Analysis 7 4. Marketing Analysis 8 5. Operational Analysis 10 6. Strength and Weakness of the Company 11 External Analysis 7. P.E.S.T.E.L. Analysis 12 8. Porter’s 5 forces 14 9. Critical Success Factors 16 10. Marketing Analysis 16 11. Opportunities 17 12. Threats 17 Current Strategies 13. Strategic Position 18 14. Proposed Strategies 18 15. Selection of winning Strategy: Feasibility 19 16. Description and Risk Assessment 20 References 21 Appendices 23 1. Introduction. Note: “All work within this report is taken from the case study unless referenced otherwise”. McDonald’s started as BBQ restaurant by (“mac and dick”) which also known as Maurice and Richard. The concept of the McDonald’s at that time was a typical drive in restaurant that offers variety of BBQ menu to choose from. The brothers realised that it is important for them to highlight the menu that get the intention the most. Mac and Dick eliminated McDonald’s carhops’ concept to make McDonald’s as a self- service operation. They also narrowed down the......

Words: 5883 - Pages: 24

Premium Essay

Value Chain Management of Starbucks

...Management Name: Yu Yat Ho Fish Topic: Starbucks–Human Resources Management Sub-Title: Employee Relation TABLE OF CONTENT 1. Executive Summary………………………………………………………………………………P.3 2. Introduction a. Company background……………………………………………………………………..P.4-5 b. Company Mission and Principle………………………………………………………P.5-7 c. Benchmark……………………………………………………………………………………..P.7-8 3. What is Value Chain Management?..........................................................P.9-11 a. Corporate Strategy………………………………………………………………………….P.12 b. Business Strategy…………………………………………………………………………….P.13 c. Functional Strategy …………………………………………………………………………P.13-14 4. Implementation of Human Resource Strategy by Employee Relation Practice a. Model of Communication………………………………………………………………..P.16-20 b. Employee Involvement…………………………………………………………………….P.20-26 5. Influence of Starbucks Human Resource Management to: a. Customers………………………………………………………………………………………..P.27-28 b. Business Process……………………………………………………………………………….P.29-30 6. Conclusion…………………………………………………………………………………………P.31 7. Appendix……………………………………………………………………………………………P.32-33 8. Bibliography………………………………………………………………………………………P.34-36. 1. Executive Summary What made Starbucks one of the most extraordinary companies in the world? I suggest that their core people-driven philosophies play a great part of it. The success of Starbucks is driven by the people who work there......

Words: 4968 - Pages: 20

Premium Essay

Starbucks

...through outlet expansion, Premiumisation of products to Differentiate and increase prices to influence the average spend per visit; along with NPD and creating new channels to new markets, i.e. PRC. Specialists add value through their expertise and dramatic show of Barista skills. Brand Loyalty is low, with consumers under pressure due to static wages/rising prices. To offset, retailers offer miniatures/vending, improved convenience and create new occasions to visit stores. Fig 2. Porter’s Generic Strategies (1980) – Strategies to increase marketshare (outlet expansion) & loyalty Differentiation * | Premiumisation of products/services to differentiate & charge higher prices - Increasing spend per visit by consumer-driven N.P.D | Focus | A niche market strategy is not suitable; focus is on mass market & intense penetration with diversification of products/services | Cost Leadership | Low prices is not congruent to the Brand Values of Starbuck’s - Premium price for high quality products & customer service/experience | Fig 3. Porter’s 5 Forces - Market Attractiveness – 60% of consumers have not altered coffee habits in recession Competitive Rivalry Mature & Fierce * Branded coffee shops focus on premiumisation & quality of services - Barista expertise to emphasise their ‘added value’ * Independents have flexibility and are as present as Branded * Market dominated by a Large Global companies: Starbucks, Costa, Caffe Nero, Caffe......

Words: 5042 - Pages: 21

Premium Essay

Starbucks Analysis

...Analysis: Starbucks S. Albright Grand Canyon University: FIN 504 March 5, 2016 Starbucks started back in 1971 in Seattle, Washington. Initially, Jerry Baldwin, Zev Siegl and Gordon Bowker sold only coffee beans and coffee making equipment (coffee .org). It wasn’t until the company was sold to its Director of Retail Operations, Howard Schultz, that Starbucks started selling coffee drinks and soon after, Schultz spread the chain of stores throughout the U.S. taking over many small coffee shops in the process (coffee .org) In the 1990’s Starbucks offered stock options to its employees and went public with an IPO which opened the door for higher earnings and more profitability (coffee.org). This analysis will discuss how a single coffee house in 1971 has grown to more than 22,000 stores in 66 countries in 2016. Starbucks’ goals, market strategies, revenue and financial outlook will be discussed. Strategies and Operating Characteristics According to the Global Responsibility Report (2015), Starbucks vision for the future and what will have the greatest potential for impact include working with farmers for ethically sourced coffee beans, pioneering sustainability economically, socially, and environmentally, and creating career opportunities for young people (2015). Starbucks Newsroom reported on March 18, 2015 that their seven strategies would grow market capital to $100 billion (2015). Revenues are currently at $16.4 billion and the U.S. comp growth averaged 7%......

Words: 3900 - Pages: 16

Premium Essay

Starbucks Strategy Analysis

...24/05/2010 | | | | “Making your organisation fit for purpose” Starbucks Coffe Company is the world leading brand in roasting and distributing coffee. The company owns now more than 15 000 coffee shops around the globe: it is settled in North America, Latin America, Europe, Middle-East and Asia. The diversity and depth of its offer (from smooth to extra roasted coffee, African, Arabian or Latin, and all the muffins, cookies and sandwiches) allow them to count on an international exposure that has last for many years. Still, their business tends to be flattening. And the number of competitors in their core-business market, even if the competition stays way back them, is growing constantly. Considering these facts, the objective of Starbucks is to strengthen its leadership on the market. We were then approached by Starbucks in this particular goal. In this folder, you will find an entire analysis of the external environment of Starbucks Coffee Company: the macro-environment, the competitors and market and the stakeholders’ expectations will lead to being aware of opportunities and threats. Then, we went on the study of the internal capabilities: the resources and competences, the sustained competitive advantage and the diagnosis of strategic capability that will permit us to define Starbucks’ strengths and weaknesses. [Thus, owing to the results obtained, we endeavour to recommend Starbucks some new and relevant elements for the future strategic direction......

Words: 8423 - Pages: 34

Premium Essay

Chapter 1 Practice Quizzes

...using social media for personal interactions, not interacting with brands. 3. Adopting a market oriented approach requires information about: a. customers and competitors. b. effective sales techniques. c. a firm's capabilities. d. All of these. 4. Various companies' attempts to "go green" reflect a ________ orientation. a. sales b. societal marketing c. marketing d. production 5. The internal capabilities of a firm include all of the following EXCEPT: a. its talents. b. its manufacturing processes. c. its products. d. its consumers. 6. Which of these issues would NOT be a major concern to the societal marketing orientation? a. fossil fuel emissions b. maximizing market share c. child labor d. diversity 7. Firms can provide customer value by: a. offering products that perform. b. raising prices. c. lowering prices. d. raising quality. 8. A sales-oriented organization targets its products to: a. women only. b. men only. c. everybody. d. the rich. 9. Organizations that exist to achieve goals, rather than profits are called: a. cooperatives. b. charities. c. non-governmental organizations. d. nonprofit organizations. 10. The use of aggressive sales techniques is a feature of the ________ orientation. a. market b. sales c. production d. societal market 11. Which marketing...

Words: 2799 - Pages: 12

Premium Essay

Dunkin' Donuts

...Table of Content Executive Summary 3 Background 4 Dunkin’ Donuts (Dunkin’ Brands) 4 Starbucks Coffee (Starbucks Corporations) 4 Leader VS Follower 5 Financial Analysis 6 Liquidity Ratio Analysis 6 Debt Analysis 11 Profitability Analysis 13 Stock Investment Analysis 16 Non-Financial Analysis 20 SWOT Analysis 20 PEST Factor Analysis 23 Product Life Cycle Analysis 24 Boston Consulting Group (BCG) Analysis 25 Conclusions and Observations 27 References 29 Executive Summary People love to drink coffee. Coffee shops, independently owned or chains are every corner. Statistics show that people are taking more coffee every day. It is a very profitable business. Nowadays when people think of coffee and its related items, the word “Starbucks” immediately come to mind. Internationally, Starbucks has already become a very famous brand and many are trying to study the secret of its success. In the States, however, another company rivalry is competing with it quite well. Quite often, the Americans are taking preference to this over the Starbucks. The company that is being mentioned is Dunkin’ Donuts. It is without doubt that Dunkin’ Donuts will act as the follower in this industry. Starbucks, on the other hand, is acting the leader. This paper will try to study how the Dunkin’ Donuts are performing by making the benchmarking financial analysis against Starbucks. Financial ratios are prepared and analyzed to evaluate its performance. The......

Words: 7051 - Pages: 29

Free Essay

Marketing Mid Term

...|Question 1 |1 points   |Save   | |  |Kroger buys a lot of cranberry products at Christmas due to high consumer demand. This is an | | | | | | |example of ________ demand. | | | | | | |[pic] | | | | | | |[pic][pic] | | | | | | | | | | | | | |elastic | | | | | | | | | | | | | |[pic] | | | | | | | | | | | | | |inelastic | | | | | | | ...

Words: 4709 - Pages: 19

Premium Essay

Strategic Managment Study Guide

...Chapter 7: * Merger: a strategy through which two firms agree to integrate their operations on a relatively co-equal basis * Acquisition: a strategy through which one firm buys a controlling, or 100% interest in another firm with the intent of making the acquired firm a subsidiary business within its portfolio. After acquisition, management of the acquired firm report s to the management of the acquiring firm * Takeover: a special type of acquisition when the target firm did not solicit the acquiring firm’s bid for outright ownership * Friendly acquisition: the management of the target firm wants the firm to be acquired * Unfriendly acquisition (hostile takeover): the management of the target firm does not want the firm to be acquired (direct negotiations with the firm’s owners; tender offer; bear hug) Explain the popularity of acquisition strategies in firms competing in the global economy * There are seven reasons why acquisitions in firms competing in the global economy work * Increased Market Power: * This is the primary reason for acquisition * If a firm achieves enough market power, it can become market leader * Example: AT&T acquisition with T-Mobile made them in the lead with market share in w-ireless service providers * Also, not only would their market share increase, but their customers would increase by 1/3 and all cell towers and wireless spectrum that t-mobile had would also turn to......

Words: 7561 - Pages: 31

Premium Essay

Marketing 360 Test 1 Study Guide

...people writing reviews that are happy or angry are very passionate Economies of scale- The more we make of an item the lower the cost per item will be Understand Marketing mix (4 P’s)/Marketing mix from customer perspective (4 Cs) * Product- Product variety, quality, design, (feat, brand name, packaging,sizing, services, warranties, returns) * Promotion- Sales promotion(sample displays), advertising, personal selling, public relations(press releases), direct marketing(telemarketing) * Price- List price, discounts, allowances, payment period, credit terms * Place (distribution)- channels, coverage, locations, inventory, transport The Four C’s * Customer Solution (Product) * Cost to Customer (Price) * Communication (Promotion) * Convenience (Place) Exchange: the process by which some transfer of value occurs between a buyer and a seller (trade currency) Needs: the recognition of any difference between a consumer actual state and some ideal or desired state Want: the desire to satisfy needs in specific ways that are culturally and socially influenced Benefit: the outcome sought by a customer that motivates buying behavior that satisfies a need or want Demand: customers desires for products backed by an ability to pay. ·         Criteria for a market Demand? Don’t know if this answers the question, but here’s the     definition of a market: Potential...

Words: 2210 - Pages: 9

Premium Essay

Strategic Management

...EXECUTIVE SUMMARY Multi-domestic organization needs a good corporate strategy as the basis to help them to compete successfully at a business level by adding values to the separate parts of the business or by using synergies or channeling resources between business units. This report on Whitbread will be oriented in answering this question: What market or businesses should whitbread invest in, including diversification in related activities, entering new market, new geographies and how much to invest in each business so as to maximise its long-run profitability? First, after giving the mission and vision of the company, we discuss the internal and external environment with relevant models. Secondly, the design formulation of the business portfolio strategy to answer our question and thirdly, we give a conclusion. This approach will help the corporate parent to use its core competencies in an effective and efficient manner to help its multi-domestic strategy to earn above-average returns. WHITBREAD ENVIRONMENT ANALYSIS 1. INTRODUCTION Established in 1742, Whitbread is one of the UK’s oldest and well-respected companies. The story really begins in August 1720 with the birth of Samuel Whitbread, who began his brewing apprenticeship in 1736, then founded his first brewery six years later. In 2001, Whitbread become the company it is today. They sold their breweries and left the pub and bar business, refocusing on the growth areas of hotels and restaurants. Their reinvention......

Words: 4355 - Pages: 18

Premium Essay

Nestle Environmental Analysis

...George Page and Charles Page, and the Farine Lactée Henri Nestlé Company, which was founded in 1866 by Henri Nestlé. The company grew significantly during the First World War and following the Second World War, eventually expanding its offerings beyond its early condensed milk and infant formula products. Today, the company operates in 86 countries around the world and employs nearly 283,000 individuals. Nestlé S.A. is the largest food and beverage company in the world. With a manufacturing facility or office in nearly every country of the world, Nestlé often is referred to as "the most multinational of the multinationals." Nestlé markets approximately 7,500 brands organized into the following categories: baby foods, breakfast cereals, chocolate and confectionery, beverages, bottled water, dairy products, ice cream, prepared foods, foodservice, and pet care. Nestlé is often referred to as "the most multinational of the multinationals with a manufacturing facility or office in nearly every country of the world. Nestlé markets approximately 7,500 brands organized into the following categories: baby foods, breakfast cereals, chocolate and confectionery, beverages, bottled water, dairy products, ice cream, prepared foods, foodservice, and pet care. Nestle is a decentralized organization where responsibility for operating decisions is delegated to local units, which have a high degree of autonomy concerning pricing, distribution, marketing, etc. Nestle is organized into seven......

Words: 4735 - Pages: 19