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Starbucks Complete Analysis

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´╗┐Individual Case for: By: Andrea Camacho BUSA 4980 Dr. Marta White April 3, 2012 Table of Contents STRATEGIC GROUP MAP 1. CASE PROFILE 1. Time Frame 2. Industry 1. Overview-History 2. NAICS Codes 3. SIC Codes 4. Major Competitors 1. Company 1. Overview 2. History 3. Company?s Size 4. Business Areas 5. Revenue per Business Area 6. Market Share 1. Issues 1. SITUASIONAL ANALYSIS 1. General External Environment 1. Technological Trend 2. Demographic Trend 3. Economic Trend 4. Regulatory Trends 5. Sociocultural Trends 6. Global Trends 1. Industry Analysis 1. Threat of New Entrants 2. Bargaining Power of Supplies 3. Bargaining Power of Buyers 4. Threat of Substitute Products 5. Intensity of Rivalry among Competitors 1. Competitor Analysis 1. Competitors? Strategies and Core Competencies 1. Peet?s Coffee and Tea Inc. 2. Caribou Coffee 3. Dunkin? Donuts 1. Environmental Trends 1. Industry Life Cycle 1. Growth Stage 2. Standard Cycle Market 1. Attractiveness of External Environment 1. Strategic Analysis 1. Key Success Factors 2. Strategies 1. Business Level 2. Competitive Strategy 3. Corporate Level 1. Stable Growth Strategy 2. Growth Strategy 1. Modes of Entry 1. Acquisitions 2. Joint Ventures 3. Licensing 4. New Subsidiaries 3. Summary- Sustainable Competitive Advantage 1. Performance Appraisal 1. Firm and Industry Ratios 1. Profitability Ratios 2. Liquidity Ratios 3. Leverage Ratios 4. Activity Ratios 5. Shareholders? Return Ratios 1. Analysis of Determined Financial Ratios 1. Ratio Definition 2. Trend Analysis 3. Comparison to Industry Ratios 4. Interpretation 5. Ratios Graph Industry v. Firm 1. SWOT ANALYSIS 1. Strengths 2. Opportunities 3. Weaknesses 4. Threats 1. STRATEGIC FORMULATION 2. STRATEGIC ALTERNATIVE IMPLEMENTATION 3. EPILOGUE STRATEGIC GROUP MAP Specialty Coffee Shops 1. INDUSTRY: Specialty Coffee Shops 2. VARIABLES: a. Differentiation: Based on blogs.indews.com, the variable to distinguish differentiation among the specialty coffee shops is the customer perceptions of environment (ambiance, service) the coffee shops offer. b. Cost Leadership: All competitors sell cups of coffee to customers. ...read more.


High strategic stakes 1. High-Strategic stakes became higher as larger and larger companies entered the industry, pushing some companies such as McDonals?s and Dunkin? Donuts to differentiate themselves through price superiority. 1. Low exit barriers 1. Low-Exit barriers are relatively low because there are no investments in machinery or inventory needed. 2. In this industry, the most important investment is to purchase premium beans, and purchasing the coffee equipment to produce the beverages. 3. The equipment purchased can be easily resold as can any property that was purchased. Most of the time coffee shops simply rent their locations, reducing the exit barriers even more. 1. Overall, intensity of rivalry among competitors is high because of the slowing growth of the industry, low switch costs, among the other factors. C. COMPETITOR ANALYSIS The specialty coffee industry is highly competitive and continually evolving as participants strive to distinguish themselves within their market and compete within a larger coffee industry. 1. Competitor?s Strategies and Core Competencies 1. Peet?s Coffee and Tea Inc. 1. Business Level Strategy: Differentiation. They claim that consumers can taste the difference in their ?Roaster-to-cup? freshness because of the deep-roasted flavor. 1. Their differentiated quality is founded on their bean selectivity, freshness standards, and artisan-roasting style (Peet?s Coffee and Tea Inc.) 2. They sell 28 types of coffee, 16 blends and 12 single origin coffees such as Colombia, Guatemala, Sumatra and Kenya Co. also provides seasonal coffees and whole leaf and bagged tea. 3. Their specialty segment includes: grocery, home delivery, foodservice and office of the whole bean coffee sales. 1. Customers: With all the variety of beverages and food that Peet?s offers, mainly people 16-70 and middle to upper class are loyal customers of this brand. They appeal to mostly liberal-minded customers including baby boomers because of their Berkeley radical-chic image. 2. Distribution: Peet?s sells its coffee through multiple channels of distribution. 1. Retail: sells whole beans, beverages and tea. 2. Grocery: sells its products through grocery stores, mass merchandisers, and club stores. ...read more.


For this reason, they buy Fair trade coffee. 1. The company entered into a Memorandum of Understanding with Tata Coffee Limited, one of the biggest providers of Arabica beans in India. Expansion? is it the right answer? 1. Starbucks: Because of the US and global income disparity, many of the target market for Starbucks has disposable income to buy luxury specialty coffee. 2. Starbucks depends greatly in the US sales, expanding to emerging economies such as BRIC countries could allow Starbucks to obtain greater market share and brand awareness. 3. C.A.F.E., Fairtrade, among other organizations that allow coffee makers and shops to purchase coffee beans from farms that are sustainable, as well as the fair treatment of the farmers. 4. These types of certifications helps sellers and retailers to increase their brand image, reduce risk of activists to boycott their stores, and to build credibility. 1. On 2009, Starbucks started to open environmentally friendly stores made with local materials and resembles the neighborhoods they are located. First store to open located in Seattle, with a coffee bar that includes scrap leather from show and automobile factories. 1. Continue expansions to many other countries Starbucks has not yet reaches, is part of the goal for 2012. Well? the answer is YES! 1. Starbucks faces an increase in competition from big food corporations such as McDonald?s and Dunkin Donuts around the world. These companies have competitive advantages that make them more competitive such as cost-leadership strategies taking part of target markets Starbucks in not able to reach. 1. Due to the nature of the business, specialty coffee industry is in the growing stage because price still at high levels with specialty coffeehouses such as Starbucks, Caribou and Peet?s Coffee and Tea. However, the entrance of McDonalds and Dunkin? Donuts with a more reasonable price in the specialty coffee are signs of the beginning of maturity stage. 1. Starbucks vision summarizes environment exciding for differentiation. All of its internal operations focus in the importance of product quality and environmentally responsibility. 2. Product quality and brand image are a must in Starbucks operations around the world. 3. ...read more.

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