Coffee and Starbucks Essay Example for Free

Coffee and Starbucks Essay In 2006, the US based Starbucks Coffee Company, with oer 11,000 stores in 36 countries was the No. 1 specialty java company in the world. Every week over 40 meg customers visited Starbucks hot chocolatehouses. After phenomenal success in the US, and revolutionizing specialty drinking chocolate culture, Starbucks undertook multinational refinement and popularized its specialty chocolate worldwide. In the 1990s, Starbucks concent commitd its expansion crusades mainly in Asia. The initial pages of the case run the origin and harvesting of Starbucks as a company and a super mark and the strategies adopted by it. In 2002, Starbucks denote that it was planning to enter India. Later it postponed its entry as it had entered chinaw are recently and was face problems in Japan. In 2003, there was news again that Starbucks was reviving its plans to enter India. In 2004, Starbucks officials visited India alone fit to sources they returned uncon vinced as they could not crystallize on an capture break openner for its entry. In mid 2006, Starbucks announced that they were all fate to passport the Starbucks be to Indians in the next 18 months. II. STRATEGIC POSTURE 1. MISSION. To liven and nurture the human spirit one person, one cup and one neighborhood at a time. Expansion to Asia commercialize 2. OBJECTIVES We ar looking forward to offering the finest coffee in the world, handcrafted beverages, and the unique starbucks contract Our Coffee It has always been, and will always be, well-nigh musical note. Were passionate about ethically sourcing the finest coffee beans, roasting them with great care, and improving the lives of good deal who mystify them. We care deeply about all of this our clobber is never done. Our Partners Were called partners, because its not just a job, its our passion.Together, we embrace diversity to hold a place where each of us can be ourselves. We always treat each separate wi th respect and self-respect. And we hold each other(a) to that standard. Our Customers When we are fully engaged, we connect with, laugh with, and uplift the lives of our customers however if just for a few moments. Sure, it starts with the promise of a perfectly make beverage, but our work goes cold beyond that. Its really about human connection. Our Stores When our customers feel this sense of belonging, our stores become a rushn, a break from the worries outside, a place where you can meet with friends.Its about enjoyment at the f number of life sometimes slow and savored, sometimes faster. Always full of humanity. Our Neighborhood Every store is part of a community, and we take our responsibility to be good neighbors seriously. We involve to be invited in wherever we do trade. We can be a force for positive action bringing together our partners, customers, and the community to work every day. Now we see that our responsibility and our potential for good is even larger. The world is looking to Starbucks to set the new standard, yet again.We will top. Our Shareholders We know that as we deliver in each of these areas, we enjoy the conformation of success that rewards our shareholders. We are fully account fitted to get each of these elements right so that Starbucks and everyone it touches can have a bun in the oven and thrive. 3. STRATEGIES International expand through joint ventures, licenses or by company have operation construct critical relationship to gaining supernumerary victualsstuffplace noesis with government Consistency on emolument and ingathering Postioning in Premium merchandise 4.POLICIES India had embarked on a serial publication of economic reforms since 1991 that had ersulted in loftyer evolution rates, lower inflation, and significant increase in outside(prenominal) enthronisation Indian government permitted Foreign condition Investment (FDI) up to 51% in retail trade of single- sign pro ducts with prior government approval. III. STRATEGIC MANAGERS a. train panel OF DIRECTORS Howard Schultz William (Bill) Bradley Starbucks Allen Company LLC founder, chairman, president and question executive police officer managing director Robert M.Gates Mellody Hobson former Secretary of demurral Ariel Investments, LLC president Kevin Johnson Olden Lee Juniper Networks, Inc. PepsiCo, Inc. chief executive officer retired executive Joshua Cooper Ramo throng Shennan, Jr. Kissinger Associates Trinity gages 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 top management to help drive its international growth, continued to strengthen Starbucks top management afternoon team, hiring people with extensive hold in managing and expanding retail chains. IV. 6F 7S 6 FORCES 1. Customer bargaining line of credit leader The customer bargaining power of starbuck is actually low. It is because Starbucks able to satisfy the call for of the customers by providing various type of coffee and beverages.In other hand, Starbucks to a fault fitting in with the beverages and nutrition from each countries they are expand to, so that they dont have any problem in fulfilling the demand of the customers. 2. provider bargaining power Starbucks get their coffee from South America and Indonesia mostly as their main supplier. found on that the supplier bargaining power is also low since Starbucks demanding their declare standard fof the lofty calibre coffee and also another term that they set in order to sustain their products tonus. 3. Other Stakeholder The other stakeholder for Starbucks is basically come fro mthe government andthe other social commu nity. The government is only giving the regulation about the coffee shop, while the other hand social community mostly protest against starbucks about their products with high sugar and fat that can caused fleshiness and diabetes. But, the other stakeholder bargainig power is suave low over Starbucks. 4. moderation The substitute for coffee as starbucks mostly offer as their declare core 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. brand-new Entrants For the new entrants for the same business area for starbucks is low. It is because some of the new entrants mostly can not manage with starbucks and mostly with small market share and retails. 6. Competitors between firms As the competitors between firms for Starbucks is medium. The competitors is based on the India market. India has sev eral(prenominal) coffee shop that provides the same services and products. Even though standardized 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 analysis 1. Systems Starbucks has their own carcass in servicing the customers. The system is the store is established closed to each otehr in a constellate of crowded places. Each of the stores will have the baristas (coffee maker) which are professional. The baristas will serve the customers. Beside that, Starbucks also prefer a non smoking 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 endeavor to make the coffee shop of Starbucks as the present moment home for the executive and also the other customers of their fundament market. They make the theme of the coffee shop as comfortable as in home with wooden interior designation, opera and jazz musical which offer relaxing atmospheric state. 3. Staff As for the staff of Starbucks, it 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 unornamented coffee but also combining the art of des ign in the coffee they do as the decoration in order to make more prestige and value on their product. 6. StructureStarbucks is lead by CEO and each or region also have their CEO that will responsible for(p) 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 master of ceremonies and custody 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 purlieu EFAS External strategic actors load rating weight stool OPPORTUNITY Expand 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 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 basis 0. 07 5 0. 35 purchasing power simile and tenth most industrialized nation in the world. The middle class were increased in India 0. 1 4 0. 4 Drank coffee as a fashion disceptation 0. 07 3 0. 21 exploitation interest in western consumer brand and luxury products 0. 06 3 0.18 THREAT in high spirits controversy 0. 1 4 0. 4 By 2002, Starbucks incurred huge losings in its Japanese trading operations 0. 06 3 0. 18 Another significant challenge that Starbucks could face was the 0. 05 3 0. 15 increasing rate of fleshiness in India High rate of rent and cost labor 0. 06 3 0. 18 Asian people is tea drinkers 0. 07 4 0. 28 Included inadequate infrastructure, beraucracy, regulative and conflicting 0. 09 4 0. 36 enthronement control Different culture, religion and regions 0. 09 4 0. 36 Total score 1 3. 77 . ground on EFAS- IFAS analysis we thought that Starbuck should be on a growth strategy. Starbucks need to expansion to the Indian market an d catch the opportunity by serving costumer needs because starbucks will be able to satisfy the desire for their coffee experience and build lot of stores to make up brand awareness. Improve the net income through creating joint venture with a lot of company in umpteen specialties, like dictums caterer, Beijing Mei Da Coffe Co. Ltd and Tata, and increasing quality and services. Using vertical growth in order to keep and improve its competitive position, control over scarce resource and guarantee quality.A. infixed ENVIRONMENT Starbucks has soil, water, pest, waste and energy 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 tolls High rent and cost of labor in Japan By 2005, China contributed to little less than 10 % of the worldwide sales of Starbucks and by 2008, Starbuck expected to deri ve 20 % of its revenue from Chinese locations Social culture High quality of service and customer triumph. In Italy, the decor of the store and the circuit board were covered based on feedback from customers Its employees were required to refrain from using strong perfumes that could adversely the aroma of its coffee Starbucks has forest 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 tuner and Starbucks announced the debut the Starbucks Hear Music channel 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 insurance 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 possessor of its operations in Southern China 0. 08 3 0. 24 Has unique image and atmosphere to create a new coffee experience 0. 1 4 0. 4 Has strict quality control worldwide so the taste remains the same 0.11 5 0. 55 WEAKNESS overly 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 utility and included an 0. 15 4 0. 6 elaborate victuals menu with coffee and had separate smoking areas Didnt have own roasting in Japan 0. 08 3 0. 24 Total score 1 4. 07 A. CORPORATE social system 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 packaging C. CORPORATE RESOURCES 1. commercializeing Expand the busi ness to grow their market share in regional and global section Positioning in superior market. Extent product line portfolio. Promotional activities to create brand awareness and introducing Coffe with high quality 2. Finance Creating strategic alliances by joint venture. strangle the price but not below the competition level make acquisition with some big companies 3. Operation Managing leave lines Creating more efficience resources 4. Research and Development. Developmnet of RD to create more ripe 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 re mains the same WEAKNESS Too many market Starbucks was opening stores too close each other. The no smoking policy made many competitors took advantage and included an elaborate food menu with coffee and had separate smoking areas Didnt have own roasting 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 competition 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 drinke rs 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, re gulatory 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 strict 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 zillion 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. Sec ond opportunities Starbuck has is the middle class are increasing in India and was estimated at around 250 million and was growing in double digits in urban and second tier cities.For the Threats that Starbuck might encounter if they want to expand in India 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 marke ts Creating Joint reckon with other Develop recession 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 relationship to excellent services about the quality of coffee, the experience gaining additional market knowledge Separated 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 Strategy W-T strategy High competition elicit 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 with 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 competition 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 Strategy Program Increasing 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 Strategy 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 allow for 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 meliorate and maintaining Better selection on Teaching the baristas from baristas skill and baristas recruitment professional service Awarding the baristas with the excellence performance 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 satisfacti on Customer satisfaction Service speed /time Improving brand awareness and loyalty Market share Customer acquisition Customer retention Internal Business Process Developing innovative products New products (Food and beverages) Developing better supply chain Supply schedule Resource availability secondary resources location .Growth and Learning Enhance baristas skill and service Baristas in culture asssignment Improve employees satisfaction Employees satisfaction and complaints Baristas recruitment Experience and service widening Provide a great work environment and treat each other respect and dignity Provide comfortable store environment with consistent products quality and good services. showtime Low Low Other stakeholder Competitors Suppliers New Entrants Substitute Costumers Low Low Medium Financial costumer Internal business process Growth and learning.