Starbucks Case Study 星巴克案例分析.pdf

Page 1 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 Industrys Critical Success Factors 10 2.6 Opportunities they provide quick service with lower price. A good example for this is McDonalds. Third, Donut and Bagel Chains, they have similar services and products with Starbucks, offered fresh brew coffee, but more focus on dessert, Such as Dunkins Donuts and Krispy Kreme. 2.5 Industrys 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 Page 9 2.6 Opportunities 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.Mgment; 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: Accessed 29/03/12 Starbucks Corporation (2012), Starbucks coffee. Available from: Accessed 25/03/2012 Page 23 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 worlds 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 worlds 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 Page 24 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 Internationals 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: Porters 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 Page 25 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 worlds 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 Page 26 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 Page 27 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. Page 28 Appendix E: VRIO Framework Valuable? Rear? Costly to Imitate ? Exploited by Organisatio n? Competitive implications Economic implications Starbucks store design and ambience YES NO NO YES Temporary Competitive Advantage AVERAGE Starbucks brand and reputation YES YES YES YES Sustained Competitive Advantage ABOVE AVERAGE Starbucks organizational culture YES YES YES YES Sustained Competitive Advantage ABOVE AVERAGE Starbucks Product innovation YES YES NO YES Temporary Competitive Advantage ABOVE AVERAGE Starbucks marketing channel YES NO YES YES Temporary Competitive Advantage ABOVE AVERAGE Page 29 Appendix E: Value Chain Analysis Firm infrastructure The worldwide coffee stores, Products distribute worldwide. Provide high quality of coffee. uman