Starbucks Essay

Using Internet resources, identify the product attributes customers seek when buying hot coffee. (10 marks) Customer tries to find reasonable price Hint: You can classify most product attributes in terms of • price point • quality—conformance to specification (e. g. , with hot coffee it might be the proper temperature, fresh, and free of foreign substances) • functionality—the elements customers value in a cup of coffee (e. g. , taste, how it is served, store’s ambiance, the overall experience, selection). Be sure to cite all references and information sources you use. One of the important factor customers try to find hot coffee which is Costs Competitive while meeting the buyer needs and requirements. • • Body describes the depth of flavor, often in terms such as “rough” or “water”. This should be a strong, full, pleasant characteristic. Some customers might look for different flavors such as Chocolate, French Vanilla, Espresso, Dark Roast, Amaretto, Hazelnut, Kona, Cafe Macchiato, Black coffee, Americano, Dry Cappuccino, Double, or Double Shot, ristretto, Cold coffee Step Tea.

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Some quality factors which could affect customer purchasing decision are quality of the coffee bean, freshly roasted ground beans, brewing equipment, time to serve, clean, quality of the water. • Some of the other factors which could affect the customers decision who are looking for specialty coffee are: coffee fragrance, acidity and after tastes such as: sense of heaviness or richness. • The environment and atmosphere also affects buyers’ decision such as clean place, no smoking smell, interior decoration, sitting area, air quality, coffee menu representation, and Background music.

Good Customer service is also important, friendly stuff leaves positive affect on the customer. Employees should be trained and motivated and friendly to provide quality customer service. For example, if customer has high temperature coffee once and it burns their hand or something. They are not going to come back. Some customer could as base their decision according to nutrution. • • http://www. talkaboutcoffee. com/types-of-coffee-coffee-varieties. html • http://www. recipesfoodcookinginternational. com/specialtycoffees. html • http://www. koffeekorner. com/koffee. htm http://ezinearticles. com/? Coffee-Flavors—Chocolate,-French-Vanilla,-Espresso,-Amaretto,-Hazelnut,-Kona&id=168587 • http://www. japan-zone. com/features/009_coffee_shops_1. shtml 2) Using the data you developed in question 1, and the data from the Starbucks case, classify the Starbucks hot coffee product. (10 marks) Starbucks concentrates on quick and friendly service and also having their crew trained well for different brewing techniques. The product of Starbucks is first and foremost the Coffee. They have many different hot and cold beverages. Especially sweet coffees with flavors.

One of the best things about Starbucks is that the crew is really friendly and smiles. There is something natural about the behavior of the crew. They welcome customers and each interaction is different. The interior is a bit daily and ascetic but it varies from place to place. Some places even have real living room sofas. There are some Brazil & South America-related designs which seem to be designed by the owners of the franchise. Music is latin mix stuff that goes down as easily as the franchise latte served here. Starbucks seems to be a non-smoking chain – the air is good and well air-conditioned here.

Often you can see Starbucks coffee shops which also have tables outside. Smoking is usually only allowed outside. For those who feel bad about blasting air conditioners, this is a good plus. Minus comes then from the poor selection of bagels and other foods and their very high price. Putting aside the cupcakes, people usually just drink coffee here. Another minus is the high prices. As high as they are, Starbucks should have something special to attract customers, or they should profile themselves as a high class place only. They also offer some drinks according to nutrition fact.

Some of their drinks under 200 calories etc. this is their way to attract health conscious customers. At Starbucks you can choose whether to drink your coffee from a Starbucks mug or a paper cup, with or without its styrene cap. For those worried about the safety of styrene, a known carcinogen, Starbucks cups themselves are safe – but the cap is still made of this troubling material. But you can always choose to drink your coffee from the mug. Starbucks is the leading retailer, roaster and brand of specialty coffee in the world,” Starbucks is known for its innovation and strong product differentiation ithin its industry. establishing relationships with well-known third parties that share their values and commitment to quality, Starbucks is able to reach customers where they work, shop, and travel,” One of the main reasons Starbucks is so successful in the flattening global economy is because they focus on quality and experience rather than the price . Starbucks, the industry leader has built an image around taking considerable shares of the competition, by establishing reliability with suppliers. Each store delivers a unique experience, particular to each city’s culture Using the data in the Starbucks case, prepare a BCG growth matrix for Starbucks. Be sure you consider the Starbucks company as a whole; do not confine your analysis to the hot coffee business. Customers are able to socialize, read, study or enjoy music while drinking coffee. Starbucks strategically positions each store with hopes of matching the specific location, helping to create a unique atmosphere. 3)For this analysis, consider using an alternative form of the BCG growth matrix.

Format your matrix with present products and new products in the matrix columns, and present markets and new markets in the matrix rows. (25 marks) Quadrant 1: These are possible growth opportunities for the company. The company will need to invest to grow this market. Quadrant 2: These are like Problem Childs. They could be successful or not. They will require substantial investment by the company to develop the market. Quadrant 3: These products are the established products that require little investment. Quadrant 4: These are new products that can take advantage of the existing customer base for established products. Name of |Market |Description |Market Growth|Your Share of |BCG Category |Strategy | |Cereal | | |Rate |This Market | | | |Begal |For Break fast | Begal is a ring form bread |High |Low, We are going|Question mark |We have to decide | | | |product from yeasted wheat dough | |to be brand new | |to support it or | | | |which is boiled for short time and| |product in this | |drop it | | | |then baked. | |market. | | | |Those seeking |a cereal with small liver-shaped |Very Low |Low, almost |Dog |Dump it; it’s not | | |New-Age |pieces that taste of liver and | |nothing; for some| |worth investing | | |alternative health|onions and contain active | |reason almost | |any more time or | | |cures |neprhoniphytes | |no-one buys this | |money here | | | | | |product  | | | |Bran Bits |Heart-Healthy |a health-food cereal made with |High |High, you sell a |Star |Keep it going, | | | |finest ingredients and a high | |lot of Bran Bits | |support it, rake | | | |level of healthy protein | | | |in the profits and| | | | | | | |use to support | | | | | | | |other products | |Apple Bits |Basic Adult  |an apple and cinnamon flavoured |High |Low, you’re going|Question Mark |You have to | | | |cereal with pieces shaped like | |to be a brand new| |decide: support it| | | |slices of apple and tiny cinnamon | |product in this | |or drop it | | | |buns | |market | | | | |Present Products |New Products | |New Markets |Growth opportunies. Star bucks needs to invest to|Diversification –Like problem childs, could be | | |grow this market |successful or not | | |Brewed Coffee Chocolate Beverages Espresso |-sandwich | | |Beverages Frappuccino -Bagel | | |Blended Beverages Kids |-Specialty coffee | | |Drinks & Others Tazo | | | |Teas Vivanno | | | |Smoothies | | |Present Markets |Market Penetration -require little investment |Product development | | |established products |New products that can take advantage of the | | |Coffees, |existing customer base for established products. | |Starbucks Natural Fusions |Ice Cream | | |- Specialty coffee |Whole Bean coffee | | | |Fruit Salads | | | |Snack Plates | | | |Hot Breakfast | | | |Salads | | | |Sandwiches, | | | |Panini | | | |Yogurt Parfaits | | | |-Bagels | | | | | | | | | | | | | | | | | | | | |

Using the data in the Starbucks case, develop a five forces (industry) analysis for the hot coffee industry. (30 marks) The porters five forces model will assist to identify where improvements can be made through the current competitive force, threat of potential entrants, bargaining power of buyers, bargaining power of suppliers and the threat of substitute products. Star bucks is a industry leader so follow the An over-crowded market will give the coffee suppliers bargaining power. There are no substitute products for the coffee beans Starbucks must buy. This is a potential threat to the company. Using the data in the Starbucks case, develop and interpret the strategic implications of a strategic group map for the hot coffee industry. (20 marks) Group A consists of large chocolate manufacturers producing a full line of chocolate products and competes on price, brand, and quality. This includes Nestle and Hershey. • Group B consists of small to medium size chocolate manufacturers that produce a narrow line of products and competes on price and quality such as Russell Stover. • Group C consists of smaller firms producing specialty, high quality, higher prices, and a narrow line of chocolates for a niche market such as Bernard Callebout. Strategic dimensions Tim-Hortness STarbbucks second cup Price Quality Differentiation Technology Implementing products into grocery stores Unique atmosphere of each store Global Corportaion Specialty coffee drinks Strategic Group Mapping Firms in same strategic group have two or more competitive characteristics in common o Have comparable product line breadth o Sell in same price/quality range o Emphasize same distribution channels o Use same product attributes to appeal to similar types of buyers o Use identical technological approaches o Offer buyers similar services o Cover same geographic areas Example: Strategic Group Map of Selected Retail Chains Assessing a Company’s Competitive Strength vs. Key Rivals  1. List industry key success factors and other relevant measures of competitive strength 2. Rate firm and key rivals on each factor using rating scale of 1 to 10 (1 = very weak; 5 = average; 10 = very strong) 3.

Decide whether to use a weighted or unweighted rating system (a weighted system is usually superior because the chosen strength measures are unlikely to be equally important) 4. Sum individual ratings to get an overall measure of competitive strength for each rival 5. Based on the overall strength ratings, determine overall competitive position of firm Should Starbucks accept the McDonalds offer? Explain your reasoning. (5 marks) Yes, Starbucks should accpt the McDonalds offer because While McDonald’s, Coca-Cola and Nike fill up TV commercial time to a national audience, Starbucks has chosen to take an unconventional approach to marketing. According to Brad Stevens, Starbucks’ lead marketing executive, http://www. plu. edu/~gibsonrf/doc/marketing-starbucks. doc

Read the case of Star Rent-a-Car in your print Reading File and answer the questions below. Answer all four questions in one file. 1. Develop an inventory of case facts organized as follows. (30 marks) a. Facts about stakeholder preferences b. Facts about the organization’s resource – we have a lot of empty space on oru properties and for many years we have allowed local people to park their boats, RVs adnd other vehicles in our yard and they have paid cash to us. – Company doesn’t have money to pay senior mangemnt right now c. Facts about organization and structure that might impact strategy making – other parts of becoming part of the franchiser would include tapping in to their partnerships(E e. g. requent flayer programs, hotel partnerships, credit card programs) and centralized reservation and technology support. – Which farchinesses has the better reputation because some companies have better environment for licensee than others – We have to find other ways to sell our cars, for example, we could rent some additional property for the used car business – Company doesn’t have money to pay senior mangemnt right now – Find individuals or other businesses that would rent cares on our behalf. The agencies would be responsible for rent and utilities and staffing the location. We would be responsible for supplying the vehicles. – in return we could pay 15% of revenues earned to dealership. We could certainly use agencies to grow. fleet costs for new vehicles have doubled in the past few years – used vehicles can represent a much more attractive cost structure for car rental companies – the image if used vehicles has improved markedly in recent years. Many renters are comfortable with driving a care with 30,000 plus kilometers on it. While this may not be true of all business travelers, many customers including our warranty customers would definitely consider driving a car with this many kilometers on it, many especially if it meant a lower rental charge. – Vehicles are being built better and aren’t as expensive to run and maintain as they were 10 years ago. – It’s hard to obtain financing over used cars.