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Starbucks Case Study 星巴克案例分析

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CONTENTS 1. Introduction ............................................................................................................5 2. External Analysis ...................................................................................................5 2.1 Wider Macro-Environmental Analysis ............................................................5 2.2 Industry analysis .............................................................................................7 2.3 Industry Life cycle ..........................................................................................9 2.4 Competitor Analysis ..................................................................................... 10 2.5 Industry?s Critical Success Factors ................................................................ 10 2.6 Opportunities & Threats................................................................................ 11 3. Internal Analysis .................................................................................................. 11 3.1 Starbucks?s Strengths & Weaknesses ............................................................ 11 3.2 Evaluation of Starbucks? Main Capabilities .................................................. 12 3.3 Value Chain Analysis ................................................................................... 13 3.4 Starbucks? Main Internal Capabilities against industry?s Critical Success Factors ......................................................................................................... 14 4. Starbucks? Current ?Issue & Challenges? Diagnosis .............................................. 14 4.1 Summary of Key Issues ............................................................................................. 14 4.2 Starbucks? Current Strategic Challenges ................................................................ 15 5. Generation of Strategic Options. ........................................................................... 16 5.1 Description of Starbucks? Competitive Strategy ........................................... 16 5.2 Strategic Direction ....................................................................................... 17
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5.3 Methods of Pursuing Strategies .................................................................. 18 6. Evaluation of Strategic Options ............................................................................ 19 6.1 Suitability ....................................................................................................19 6.2 Feasibility .................................................................................................................... 20 6.3 Acceptability ............................................................................................................... 21 7. Selected Strategy .................................................................................................. 22 7.1 Description of Selected Strategy................................................................... 22 7.2 Resources Needed for Its Implementation .................................................... 23 8. Conclusion ........................................................................................................... 23 9. References ............................................................................................................ 24 10.Appendices .......................................................................................................... 25 Appendix A: PESTEL Analysis .......................................................................... 25 Appendix B: Porter?s Five Forces Analysis ........................................................ 26 Appendix C: SWOT Analysis ............................................................................ 28 Appendix E: VRIO Framework ......................................................................... 30 Appendix E: Value Chain Analysis ....................................................................31 Appendix F: Porter?s Generic Strategies / Bowman?s Strategic Clock ................ 32 Appendix G: Ansoff Matrix ............................................................................... 32

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1. Introduction
This report applied the PESTEL, SWOT, Ansoff Matrix and other strategy analysis methods to try to provide a full strategic assessment of Starbucks Corporation. Its aim to further study the Starbucks? development strategic, draw lessons from successful experience and absorb its failure lesson. Starbucks was founded in Seattle, Washington by three academics in 1971, Howard Schultz joined it in 1982 and left it to open the II Giornale in 1985, finally, he acquired Starbucks in 1987, became the president and CEO. Until now, Starbucks has 19,435 stores in more than 50 centuries. By offer beverages, coffee beans and other snacks becomes the world?s premier roaster and retailer of specialty coffee, has achieved great success in the retail coffee industry. At present, Starbucks focus on extend its international growth, pay attention to Asia market which as the most significant growth opportunity while slowing its domestic expansion. Starbucks mission is to inspire and nurture the human spirit – one person, one cup and one neighborhood at a time. In addition, according the letter of Howard Schultz to All Starbucks Partners (2008), the vision of Starbucks is that it can offer a welcoming experience for customer, become a warm “third place” as a part of their daily life with a superior coffee.

2. External Analysis
2.1 Wider Macro-Environmental Analysis
Based on using the PESTEL Framework (Appendix A), to analysis the wider macro environmental of retail coffee industry. Generally speaking, the global political environment is stable, social stability, economic development, now the economic situation is getting better, coffee store turning into people leisure life, become a community place, the demand is increasing, coffee become more popular in the world,
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which is one of the world?s most widely favored beverages. Overall, the macro environment is beneficial to the development of retail coffee industry. Table 1: PESTEL analysis the retail coffee industry

Political
Government levying export quotas

Economic
Suffered from the global economic crisis

Social
Coffee become a popular beverages around the world

Trade restriction to limited exports
Trade agreements provide a stable global environment

The large demand of coffee beans

Coffee satisfied the attitude of leisure life

Coffee bean prices are affected by cultivation and weather

Portable coffee fit the fast lifestyle

Technological

Environmental

Legal
Adhere to Labor and Employment regulations

The advanced agricultural technology produce high quality of coffe bean

Join in the Conservation International’s Center for Environmental Leadership

Provide employee insurance and health care Special coffee equipments roasting and blending great coffee bean Observe the minimum wage requirements and child labor provisions

Make efforts to recycling in stores

Implement the Food Safety Law Professional training for the barista Save water and energy to reduce waste

Stick to environmental protection laws

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2.2 Industry analysis
Coffee stores takes up the speed growth part of the restaurant business, more than 70 billion cups of coffee consumed each year, retail coffee stores have great developing potentiality. However, as many international giants enter the retail coffee industry, especially the chain restaurant, for instance, McDonald launched serve coffee, which intensifies the competition further, that is result in the demand of coffee is increasing, the fierce competition also increased the buyer bargaining power. In addition, because the market has been maturity, the industry growth rate is growth slowly. Faced with this situation, Starbucks need to improve the core competitiveness to achieve the maximum profits in the retail coffee industry (Appendix B). Table 2: The use of Porter?s Five Forces Model to Analysis the retail coffee industry

Threat of New Entrants (Medium)

The power of buyers (Medium)

Competitive rivalry (High)

The power of suppliers (High)

Threat of Substitutes (Medium)

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Threat of entrany:Medium
? ? ? ? ? ? ? The demand of technical expertise A lot of preparatory intemediary inputs Hire the special barista High decoration costs Hard to match the incumbent's distribution channels High adbertising investment Import high quality coffee bean

Threat of Substitutes:Medium
? ? ? ? Fruit juices Milk Soft drinks Tea

Competitive rivalry: High
? ? ? ? ? Maturity market Slowly growth rate Balance competitors Strong competitors entry Lower differentiation of products and service

The power of buyers:Medium
? Low switching costs ? Buyer negotiation with suppliers ? Buyers not concentrated

The power of suppliers:High
? Agricultural technology ? Weather condition ? The limitations of government policy

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2.3 Industry Life Cycle
This paragraph analysis the retail coffee industry use of the Porter?s Five Forces framework, which based on analysis the five key forces in the retail coffee industry, to indicate the industry feature and industry phase of life cycle. It concluded that the retail coffee industry matured quite, market growth is more slowly, take account of the medium existing barriers, the competitions is also get tougher, markets tend to be more mature. It shows that the retail coffee industry is in the maturity stage. Because the lower profit in the maturity stage, Starbucks has to develop more diversity productions, change the expansion strategy, fine tune the focus to expand their oversea market to share the market for achieve the higher profits.

Table 3: Retail coffee industry life cycle
High Development Volume Growth Maturity Decline

Low

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Sales Volume
Time

2.4 Competitor Analysis
There are three mainly strong competitors in retail coffee industry, first is the specialty coffee shops, they have different flavor coffee and different store design compared with Starbucks, for example, Caribou Coffee and Second Cup Coffee. Second is quick service restaurants, they have huge competitive in coffee industry due to they have huge number of fast-food retailer for bring more convenience to customer; they provide quick service with lower price. A good example for this is McDonald?s. Third, Donut and Bagel Chains, they have similar services and products with Starbucks, offered fresh brew coffee, but more focus on dessert, Such as Dunkin?s Donuts and Krispy Kreme.

2.5 Industry?s Critical Success Factors
Table 4: the critical success factor for the retail coffee industry as following:

Critical Success Factor for the Retail Coffee Industry Strategic Store Location Affordable Price Comfortable Environment Brand and Reputation Good Coffee Quality Specialty Roasting and Brewing Different Flavors Investing in Advertising

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2.6 Opportunities & Threats
According the SWOT analysis (Appendix C), the opportunities and threats existed at present. There are following main opportunities: First of all, Starbucks can expand aggressively abroad through licensing agreements, to operate the outlets in crowed areas. Second, partner with other beverage companies to innovate new taste coffee or other flavor beverage. Third, by selling handpicked CD to customer and provide digital music for to download as a profit growth point. Forth, Building partner relationship with other international companies will be extended to the international sphere. Further, the Asian market are potentially lucrative, such India and Vietnam. In term of the threats, firstly, the threats posed by many international giants enter the retail coffee industry, especially the chains restaurant, provide cheaper price coffee. Secondly, coffee beans price increased by limited conditions, like weather or export restriction, bring about the increasing costs of raw materials. Indeed, the market is becoming saturated, intensifies the coffee store competition further. Moreover, because of Starbucks have a great success in retail coffee industry, generate the copy or imitate the brands by competitors.

3. Internal Analysis
3.1 Starbucks? Strengths & Weaknesses
There is much strength in Starbucks, most significant, Starbucks has a success brand name, which is the leading retailer and roaster of specialty coffee, has 19,435 stores in more than 50 centuries over the world. It provides the excellent quality coffee and good customer experience to build a good reputation that is helpful for company long term development. In addition, Starbucks has excellent innovative capability, development new flavor of coffee, such as VIA, Pike Place Roast, are popular by the
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consumers. And established widespread distribute channel and the good commercial credit to dominate the retail coffee industry. Furthermore, it created a good working environment, the good relationship between the managers and employees, list on the 100 Best Companies to Work annually by Fortune magazine. The main weakness of Starbucks is that the fast grow of retail stores lead to service level decline, the water down of the Starbucks experience. Consequently, expansion to aggressive result in the stores location is more intense, the performance of stores influenced by each others. Other, the products rely on be beverages, the varieties is not large, has less attractive to customers, especially the people who did not prefer drink coffee. In particular, Starbucks average price is more higher compared with chain restaurant.

3.2 Evaluation of Starbucks? Main Capabilities Table 5: the main capabilities of Starbucks
The following table evaluated the Starbucks main capabilities in tangible resources and intangible resources (Appendix D).
Physical Resource Tangible Resources Retail stores Good location Specialty Coffee Equipment

Human Resource Financial Resources

Professional Trained staff Investments Brand

Management team Stocks Patents Acquisitions Good employee relationship Ambience Design

Intangible Resources

Intellectual Capital

Reputation Good partnership

Organisational culture Techniques

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3.3 Value Chain Analysis
Table 6: Value chain within Starbucks
Firm infrastructure The worldwide coffee stores, Products distribute worldwide.

Provide high quality of coffee.
Human resource management Recurring the people who really interesting in coffee Provide professional training to employees. Provide full health care to staff Technology development Provide diversity productions, developing new flavor coffees. Use special equipment to roasting and brewing coffee Procurement Purchase green coffee beans. Use purchasing arrangements to control the coffee supplies. Margin

Support Activities

Inbound Logistics Import coffee beans from the suppliers over the world.

Operation Grind coffee beans, roasting and brewing. Packaging the coffee.

Outbound Logistics Well coordinated distribution with retailers and stores.

Marketing and sales Partner with other corporation to distribute the coffee over the world.

Service

As the third place” coffeehouse experience with digital and social media

Margin

Primary activities

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3.4 Starbucks? Main Internal Capabilities against industry?s Critical Success Factors.
Industry’s Critical Success Factors Strategic Store location Affordable Price Comfortable Environment Brand and Reputation Good Coffee Quality Specially Roasting and Brewing Different flavors Investing in Advertising Table 7 As the most successful coffee retailer, Starbucks against all the critical successes factors mostly, as for the price and advertising did not match these, it result of the Starbucks strategy, it depend on words to mouth rather than advertising much. Also, it offered the superior coffee with higher price. Dose Starbucks against these factors? YES NO YES YES YES YES YES NO

4. Starbucks? Current ?Issue & Challenges? Diagnosis
4.1 Summary of Key Issues
Considering all the threats and weaknesses that mentioned in the previous sections, it is appears that the following issues exist in Starbucks: Firstly, less competitive advantage compare with other strong competitors after other international giants enter the retail coffee industry. Especially the chains restaurant, provide cheaper price coffee, they also have location advantages.
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Second, the rising prices for coffee beans and dairy lead to cost of production get higher squeeze the margins. Fourth, generate the copy or imitate the brands by competitors because of Starbucks have a great success in retail coffee industry, Fourth, the fast grow of retail stores lead to the Starbucks? service level decline, the water down of the Starbucks experience. Moreover, expansion to aggressive result in the stores location is more intense, the performance of stores influenced by each others. Fifth, the market is becoming saturated, profit growth slowly. The downturn economic changed the consumer spending habits is leading to lower consumption.

4.2 Starbucks? Current Strategic Challenges
One of the biggest challenges in Starbucks is keep the excellence experience in stores and high service level during the period of the stores high speed expansion over the world. More important, more innovation flavors beverage continue to introduced to the market for get more competitive advantage to others competitors. In the current global economic depression, how to occupying the market, take larger market sharing for make more profit is also a tough challenges for Starbucks. Furthermore, how to Increase the efficiencies and effectiveness in operating and managing is cannot be ignored.

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5. Generation of Strategic Options
5.1 Description of Starbucks? Competitive Strategy
According to Porter?s Generic Strategies, there are three types of competitive strategies: Overall cost leadership, Differentiation, focus strategy. Table 8: the Starbucks? competitive strategic options Starbucks’ Competitive Strategic options

Overall leadership

cost Option 1:

Price based strategies

Took a gamble by cutting the price of their products, seek a lower price than competitors to attractive customers.

Differentiation

Option 2 Differentiation strategies Provide better products and services with higher price to achieve the competitive advantage.

Focus

Option 3 Focus strategies Provide high perceived products and service, offering innovative products or service to meet particular demand of customers.

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5.2 Strategic Direction

Table 9: use Ansoff matrix to identifying the strategic directions for the strategic options.

Existing

New

A

Option 1

B

Option 2

Existing

Market Consolidation

penetration

Product Development

Markets

C

D

Option 3

New

Market Development

Diversification

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5.3 Methods of Pursuing Strategies
Because of option 1 is focus on market penetration and consolidation, through organic development by develop own capabilities to the cutting price of coffee retail price to get price advantage to increase the share for market penetration, and enhance the promotion and advertising to attractive new consumers to consolidate the existing market. Acquire coffee industry companies to extending the marketing channel. Option 2 pay attention to product development, in addition to organic development, it mainly through the alliance to pursing the strategy, it will into joint venture with other large enterprise to create new coffee related products. Also it can increase the use more licensing in both domestically and internationally. Option 3 is focus diversification based on the Starbucks pursuit of vertical integration, this strategy has more risk compare with above strategies. it is radically increase the Starbucks? scope, the most suitable methods for pursuing this strategy is strategic alliances, Starbucks can through joint ventures, licensing agreements to extent the products and markets. In addition, It should be noted that Starbucks never move to Franchising for better control the coffee quality.

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6. Evaluation of Strategic Options 6.1 Suitability
Table 10: Suitability assessment Strategic options Environment Capability cultural influences

Get market share Option 1 price strategies based Maintain the existing market share, Gain

Exploit capabilities Exploit resources competences superior and

Cultural clash

Stick

to

what

the

organisational culture

more share for price advantage, Option 1 Differentiation strategies Exploit opportunities current market Option 3 Focus strategies Create new market, required for market entry new in saturated Exploit research and design, products capabilities Exploit core Potential for culture clash merger acquisition through the and current and Making counter

cultural decisions for rapid growth

competences in new field

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6.2 Feasibility
Table 11: Feasibility test Strategic options Financial feasibility Resource deployment

Option1 price based strategies Low investment may gain high profit Acquire scale economies, learning and competence development

Option 1 Differentiation strategies Option 3 Focus strategies

Required high research cost and labor cost. Required high capital

Exploit capabilities Building on own capabilities Required high quality of resource, develop core competence

investment, strong cash flow

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6.3 Acceptability
Table 12: Acceptability assessment
Strategic options Return Risk degree Crucial stakeholder reaction

Option 1 price strategies based Low investment may gain profitable, return on capital low May required

financial restructuring

Option 1 Differentiation strategies

Investment a lots in research new

medium

Acquisitions mergers might

or be

products, do not sure the profitability

unacceptable

Option 3 Focus strategies

Huge

investment

high

New business model could cut out channels

capital in uncertain profitable new area

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7. Selected Strategy 7.1 Description of Selected Strategy
Through use the score from 1 to five to ranking the strategy options in the three aspects: suitability, feasibility acceptability for selected the optimum competitive strategy. Table 13: Ranking the strategic options
Strategic options Option 1 price strategies Option 1 Differentiation strategies Option 3 Focus strategies 4 4 3 11 5 5 4 14 based 3 4 3 10 Suitability Feasibility Acceptability Totals

The above choices are ranked on a scale from 1 to 5, where 5 stand for high viability and 1 stands for Low viability of the strategy. It se seen form the above table that the option 2 differentiation strategy has highly scores in the three aspects evaluation, through provide better products and services with higher price to achieve the competitive advantage. This is the best strategy for Starbucks development. Compared with Option 1, it can address the key issues that Starbucks faced in the long run. Compared option 3, it can relative mitigates the risk, meet the stakeholders expectation.

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7.2 Resources needed for its implementation
Option 2 required to invest huge capital in research and innovation, lay emphasis on product development to create more flavors beverages for meet the demand of customer. In term of marketing and distribution, Starbucks need build up relationship with channel partners and keep a long term relationship with partner enterprise to penetration the existing market, and mainly through the alliance to take joint venture with other large organisations to develop sales channels for expand global market, distributed their good throughout the world. Another, focus on employee training, build the good relationship between the managers and the employees for ensuring deliver exceptional service to customer, enhance the Starbucks experience.

8. Conclusion
In summary, this article through analyse the external environment of the impact on the retail coffee industry and internally analysis of Starbuck?s based on using such as PESTEL, PORTER?S Five Forces, VRIO framework and so on, give the diagnosis for the current issues and challenges, formulates the strategic options and methods of pursuing these strategies, then evaluate the suitability, feasibility and acceptability of these strategic options, to selected the best competitive strategy for the Starbucks. If Starbucks want to achieve sustained long-term growth in revenues and profits in the competition, it needs to exploit growing brand awareness and brand name strength, especially, it should pay attention how to ensuring continue innovative the coffee related products, enhance the customer experience, control the product quality and service level when the growth speedily. If Starbucks to take advantage of core competence, it will return it to sustainable, profitable growth over its rivals.

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9. References
Gulati, R.and Kletter, D.(2005), Shrinking Core, Expanding Periphery: THE RELATIONAL ARCHITECTURE OF HIGH-PERFORMING

ORGANIZATIONS, California Management Review; 47 (3), 77-104 Helfat, C.E. and Winter, S. G.(2011), Untangling Dynamic and Operational Capabilities: Strategy for the (N)ever-Changing World. Strategic

Management Journal; 32 (11), 1243-1250 Johnson G, Whittington R and Scholes, K (2008) Exploring strategy, 8th ed. London: Pearson Education Ltd Johnson G, Whittington R and Scholes, K (2011) Exploring strategy text and cases, 9th ed. Harlow: Pearson Education Ltd Johnson, G. Scholes, K and Whittington, R. (2010). Fundamental of strategy. . England: Financial Times Prentice Hall Lecocq, X., Demil, B. and Ventura, J.(2010), Business Models as a Research Program in Strategic Management: An Appraisal based on Lakatos.M@g@ment; 13(4), 214-225 Schultz, H. and Yang, D. J. (1997), Pour your heart into it: how Starbucks built a company one cup at a time, New York: Hyperion

Electronic resource: Starbucks Corporation (2012), Starbucks? responsibility. Available

from:http://www.starbucks.com/responsibility/environment [Accessed 29/03/12] Starbucks Corporation (2012), Starbucks? coffee. Available from:

http://www.starbucks.com/coffee [Accessed 25/03/2012]

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10. Appendices Appendix A: PESTEL Analysis
Political The changing political conditions in coffee growing countries, governments through imposing export quotas and trade restrictions to limited exports, the coffee beans prices has been raised. The global political environment is stable, the political issues relate to trading agreements in different countries. Economic The recovery from economic crisis where were sharp global economic downturn since 2008, brought severe impacts on retail coffee industry. Many underperforming coffee stores had to close. The coffee beans is the world?s second largest traded commodity, were grown in 70 tropical countries, the coffee as the main exports products in many countries. Majority of coffee was grown by small poverty farmers, the agricultural conditions influenced yield, and the increased production is limited by weather condition. Social The most of coffee served to on the road drinkers, then a large part coffee served at home and the rest is served in restaurants and coffee bar. Coffee as a part of lifestyle, coffeehouse turning into a leisure place in life, people meet family, chat with friends. The demand is increasing, become more popular in the world, which is one of the world?s most widely favored beverages. Technological The agricultural technology, produced areas and other issue determined the quality of coffee beans. Special coffee equipments are important for ground process, and the important phase
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of the production of great coffee is the roasting and blending. The barista need to undergo professional training to make and serves the drink for customer. Store ambience design and location also a significant factors to attractive customer in retail coffee industry. Environmental Promote environmentally sustainable partnered with Conservation International?s Center for Environmental Leadership. Make effort to achieve Leadership in Energy and Environmental Design certification. Make efforts to recycling in stores, reusable paper cubs, reduce the energy consumption and waste, conserve on water and energy usage to generate less solid waste. Legal Adhere to Labor and Employment regulations, provide employee insurance and health care, improve the employee workplace environment, and keep with the minimum wage requirements and child labor provisions. Give implement the Food Safety Law, ensure offered safety food and beverages. Strictly abide by environment protection laws and regulations, Promote

environmentally sustainable

Appendix B: Porter?s Five Forces Analysis
The threat of entry:Medium There are medium barriers to entry due to the retail coffee industry required a lot of preparatory intermediary inputs to select the location of the retail store, export the high quality coffee beans, hire the special barista. During the operating, it needs to technical expertise to innovative the different favor beverage; also need investing in decoration spending for create a comfortable environment. New entrants are difficult
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to match the incumbents? distribution channels. The new entrants need spend largely to advertising their coffee to attractive the customer. These factors are important barriers to overcome for new entry. Competitive rivalry:High Because the market has been maturity, the industry growth rate is growth slowly unlike before, as the business become mature, the existing retail coffee stores have own fairly stable and reliable customer base, they provide similar products and services results the lower differentiation, the slow growth rate lead the competitors balance. Especially the chain restaurant, for instance, McDonald, launched serve coffee, which intensifies the competition further. The threat of substitutes:Medium Despite the demand of coffee is increasing, coffee has become more popular in the world, which is one of the world?s most widely favored beverages. There are parts of teahouse, bars and restaurants offer the tea, milk, soft drinks and fruit juices impacted of retail coffee industry in some extent. The increased prices of export high quality coffee beans affect the threats of substitutions. The power of buyers:Medium Although the fierce competition increased the buyer power compared than in the past, there are low switching costs in the numerous coffee suppliers and the buyers not concentrated. And large coffee retails can negotiation with suppliers, raise the threat of suppliers, decrease the buyer bargaining power.

The power of suppliers:High
Taking account of the changing political and weather conditions influenced largely on the coffee beans supply, on one hand, the export quotas can restricted by government. On the other hand, agricultural technology, produced areas and other issue determined the quality of coffee beans, such as weather; agricultural conditions affect yield lead to the coffee production is limited. All these factors lead to the high power of
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suppliers.

Appendix C: SWOT Analysis
Strengths Starbucks has a success brand name, which is the leading retailer and roaster of specialty coffee, has 19,435 stores in more than 50 centuries over the world. Provide the excellent quality coffee and good customer experience to build a good reputation that is helpful for company long term development. Established widespread distribute channel and the good commercial credit to dominate the retail coffee industry. It created a good working environment, the good relationship between the managers and employees, list on the 100 Best Companies to Work annually by Fortune magazine. Starbucks has excellent innovative capability, development new flavor of coffee, such as VIA, Pike Place Roast, are popular by the consumers. Weakness The fast grow of retail stores lead to service level decline, the water down of the Starbucks experience. Expansion to aggressive result in the stores location is more intense, the performance of stores influenced by each others. The products rely on be beverages, the varieties is not large, has less attractive to customers, especially the people who did not prefer drink coffee. Starbucks average price is more higher compared with chain restaurant. Opportunities Starbucks can expand aggressively abroad through licensing agreements, to operate the outlets in crowed areas. Partner with other beverage companies to innovate new taste coffee or other flavor
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beverage. By selling handpicked CD to customer and provide digital music for to download as a profit growth point. Building partner relationship with other international companies will be extended to the international sphere. The Asian market are potentially lucrative, such India and Vietnam. Threats The threats posed by many international giants enter the retail coffee industry, especially the chain restaurant, provide cheaper price coffee, Coffee beans price increased by limited conditions, like weather or export restriction, bring about the increasing costs of raw materials. The market is becoming saturated, intensifies the coffee store competition further Competitive Because of Starbucks have a great success in retail coffee industry, generate the copy or imitate the brands by competitors.

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Appendix E: VRIO Framework
Valuable? Rear? Costly to Imitate ? NO Exploited by Competitive Organisatio implications n? Economic implications

Starbucks? YES store design and ambience Starbucks? YES brand and reputation Starbucks? YES organizational culture Starbucks? Product innovation Starbucks? marketing channel YES

NO

YES

Temporary Competitive Advantage Sustained Competitive Advantage Sustained Competitive Advantage Temporary Competitive Advantage Temporary Competitive Advantage

AVERAGE

YES

YES

YES

ABOVE AVERAGE

YES

YES

YES

ABOVE AVERAGE

YES

NO

YES

ABOVE AVERAGE

YES

NO

YES

YES

ABOVE AVERAGE

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Appendix E: Value Chain Analysis
Firm infrastructure The worldwide coffee stores, Products distribute worldwide.

Provide high quality of coffee.
uman resource management Recurring the people who really interesting in coffee Provide professional training to employees. Provide full health care to staff Technology development Provide diversity productions, developing new flavor coffees. Use special equipment to roasting and brewing coffee Procurement Purchase green coffee beans. Use purchasing arrangements to control the coffee supplies. Margin

Support Activities

Inbound Logistics Import coffee beans from the suppliers over the world.

Operation Grind coffee beans, roasting and brewing. Packaging the coffee.

Outbound Logistics Well coordinated distribution with retailers and stores.

Marketing and sales Partner with other corporation to distribute the coffee over the world.

Service

As the third place” coffeehouse experience with digital and social media

Margin

Primary activities

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Appendix F: Porter?s Generic Strategies / Bowman?s Strategic Clock

Appendix G: Ansoff Matrix

Existing

New

A
Option 1

B
Option 2

Existing

Market penetration Consolidation

Product Development

Markets

C

D
Option 3

New

Market Development

Diversification

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