Starbucks is one of the biggest coffee corporations in the world, and this makes its brand to be the most popular and strongest across the global.
The number of loyal customer in the company is growing tremendously due to the quality and the brand of the enterprise.
Moreover, it has a global network of suppliers. The company has also acquired several businesses as subsidiaries such as Teavana, Seattles Best Coffee, ad Ethos Water.
Income Statement- the Companys stock price increased for six months over the past five years. Since 1992 to 1997, the company had executed its strategies to near perfection by achieving its goals building the best brand in North America, and this made it increase its revenue.
The company had partnered with many other enterprises that make its sales more thereby increasing its income statement exponentially.
Organizational Culture- the Company has strong culture which ensures it continues to prosper.
It provides it workers with a healthy working environment and treats each other with a lot of dignity and respect. The workers are highly motivated by their seniors such that they view them as their partners.
The company embraces diversity as a crucial component of doing business.
The company uses the highest standard of excellence when it is conducting its activities such as purchasing, roasting and a fresh supply of coffee to the consumers.
It contributed positively to the society and environment by ensuring that it carried out its corporate social responsibilities.
The company recognizes the profitability is crucial for the future growth.
It develops a good relationship with its customers a strategy that has enabled to retain most of its clients.
Roasting and Blending
The Company had invested much money that was used to carry out research on the best roasting techniques.
The process was computerized to guarantee consistency since it is a process that requires a high level of technology. Individuals who carry out this process are well trained to ensure coffee roasted was of high quality like no any other one.
When roasting and air cooling was over, the coffee was vacuum-sealed immediately, and this ensures that the coffee had unique taste and freshness.
Real Estate approach- The Company had a team of well-qualified designers that carried out its operation whenever it needed a new retail shop.
It could fit anywhere since they could design a building of different shapes such as triangle, or trapezium.
They only needed space, and they did not worry about the shape or size of the space.
The company had about 20 managers across the country to ensure its growth was not hindered by the lack of infrastructure.
The stores were located in strategic positions to ensure it attracted the potential customers being targeted.
Streaming supplier relations
Dealing directly with the coffee farmers especially the small scale farmers who had no ability to exports the products by themselves due to financial constraints.
The company purchased coffee at different prices, and each price reflected the quality and quantity of coffee.
Decentralizing supply chain
They eliminated potential exporter/import to avoid intermediaries.
It took control over the supply chain operations.
The Company was involved in sampling process with the aim of eliminating any export or importer.
It reduced costs of operation over time as a strategy for higher returns.
Since there no barriers to entry in the industry Starbucks competed with about 3,485 competitors. Most of them had no plan on how to grow and expand internationally.
The Second Cup was the main competitor
Also, most consumers preferred consuming coffee in the grocery chain originating from basic coffee companies.
Most coffee manufacturers started producing specialty brand since it was more popular among the customers.
Harvesting of beans was affected by the weather conditions. Additionally, the weather during harvest influenced the quality of the coffee.
Growing trend of operating expenses due to the cost of beans and operating costs. The cost of producing the coffee beans has increased making the farmers demand a high pay while still the cost of labor has increased and other factors of production.
2. Options for Starbucks
Domestic expansion (new joint ventures) yes- what do we want to do in the short and long term.
Entered into a contract with Dreyers Ice Cream that over $40 million with a net profit of $0.5 million.
Signed a contract with Bottled Frappuccino that produced a quality ready to drink coffee beverage.
It penetrated in the grocery market by testing the market in Portland area. Later it tested in Chicago and put a time limit of 5 years to penetrate national wide.
Kiosk location no-no Homey experience (short term)
It made short-term contracts with retailers, restaurants, and wholesalers.
The stores increased revenue while still marketing the companys name.
Some distributors included United Airlines, Nordstrom, Red Hook Breweries, and PepsiCo.
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