This document provides a strategy analysis of Starbucks Corporation using Strategy Dynamics, which is a quantitative, resource-based approach to understanding a firm's performance over time. The analysis developed a strategic architecture model for Starbucks' retail store business using employee, store, and financial data. The model explores several issues that can influence Starbucks' strategy, such as customers with less discretionary income, expanding too fast, staff layoffs impacting service quality, and increased competition. The analysis found that Starbucks' profits and revenue growth have declined recently, possibly due to factors like saturation from opening too many stores or economic conditions reducing customer spending.
Starbucks is facing challenges including negative public opinion, dissatisfied employees, and an inability to attract younger consumers. The document analyzes alternatives for Starbucks to address these issues:
1) Pursue a corporate social responsibility strategy to improve reputation and staff morale.
2) Segment consumer markets and customize the Starbucks image and products for different groups like younger customers.
3) Customize products and image for new international markets to prove cultural empathy.
4) Develop a company-wide planning culture to clarify roles and give staff more input, improving service and job satisfaction.
The criteria for evaluating alternatives are that they must enhance Starbucks' value proposition for customers, enable penetrating new markets and improving employee and public perceptions
1
SPACE Matrix
Below you will find a Strategic Position and Action Evaluation Matrix (SPACE Matrix) for Starbucks Coffee Company with two of their competitors, McDonalds and Maxwell House.
Based on the space matrix and previous matrices and reviewing the 2021 Starbucks 10-K and other financial documents, Starbucks is clearly in the aggressive quadrant, and competing well against its competition considering its smaller product mix, and more targeted market. It has a very strong financial position (FP) due to a low D/E ratio, and high current ratio and a high inventory turnover. Starbucks stability position is reflective of the covid pandemics, and the rising inflations pressures, as well as a low barrier to entry for competition, and a higher barrier to entry for Starbucks into established coffee cultures and markets.
Starbucks competitive position is very good, they are higher they the coffee suppliers like Maxwell House, and on the heels of larger corporations like McDonalds. As a note, they have no single worldwide competitor with a product mix close to theirs, so McDonalds, even though a fast food restaurant chain, is considered a competitor with their McCafé offerings. So with a smaller product mix Starbucks is in a very competitive position relative to McDonalds. Its Industry position (IP) is quite high, and it is considered the leader in the coffee industry.
With Starbucks being in the aggressive quadrant, there are a few recommendations to consider. Starbucks should accelerate its growth plans in the markets in which they lead, the USA, Canada, and China to maintain and expand its lead over the competition. This recommendation is based on the relative lack of barriers to entry into their core coffee business, and competitive pressures from the competition.
Starbucks should also consider increasing its product mix and quality and remarketing/repositioning stores as a defensive act to not lose market share to competitors that offer equal quality coffee products, but a greater mix of other food-related products. This should include local food offerings in markets that they are struggling with such as EMEA.
Starbucks should also look to expand its involvement in the Global Coffee Alliance with Nestle as this will expand its global reach. Starbucks has expanded its social responsibility with increased investment in its partners, Starbucks refers to its employees as partners, by advancing social and racial equality, and focusing on partner retention. It has integrated social responsibility as the core of its purpose and “our reason for being.” They have also expanded environmental sustainability programs by declaring a bold aspiration to become planet positive by 2050. Starbucks needs to expand this program worldwide, beyond the markets that they lead to truly show that they truly are committed.
Grand Strategy Matrix
Below you will find a Grand Strategy Matrix for Starbucks Coffee C.
Starbucks has expanded globally from North America to Asia Pacific. While global expansion increased revenues, profits grew unevenly as the company focused on opening new stores. Recently, Starbucks closed 600 stores and its CEO returned to address declining share prices and how to refocus on quality over expansion. The document analyzes Starbucks' financials and global strategy to determine if it should prioritize shareholders or customers going forward.
This document provides an analysis of Starbucks Corporation and the retail coffee market. It begins with an executive summary of Starbucks' past success through aggressive expansion but recent declines. It then defines the problem of how Starbucks can remain profitable. Through a market analysis and Porter's Five Forces, it evaluates challenges like competition and substitutes. A SWOT analysis identifies strengths like brand recognition but also weaknesses such as inflexibility. It concludes with strategies Starbucks could pursue, such as product differentiation, loyalty programs, and expanding into new markets, to renew its brand and build customer loyalty amid current threats.
Starbucks is experiencing declining performance, with net income down 70% in the final quarter of 2008. Revenues have also declined, prompting a 33 cent drop in share price. Sources of declining performance include falling net margins, weaker financial leverage impairing profit enhancement, and aggressive US expansion. While the recession has impacted competitors, Starbucks' internal decisions around expansion and concentration policies also contributed to deteriorating performance. Schultz's strategy focuses on more efficient operations, preserving brand strengths, providing value and innovation. However, the strategy may be too long-term focused and not address pressing issues like costs, net margins, return on equity, asset utilization, and differentiation in an increasingly competitive market.
Starbucks was founded in 1971 in Seattle and has since expanded globally to over 20,000 stores in 62 countries. It offers a range of coffee, tea and food items. Starbucks has experienced strong stock performance over the past five years, with returns of 367.6% compared to 91.69% for the S&P 500. Key value drivers for Starbucks include high profit margins from its upscale customer base and high sales growth through customer loyalty programs. The company has a relatively high debt level that has increased its leverage risk over time.
Starbucks has built a strong global presence with over 22,000 stores in 67 countries. However, new trends toward healthier, more transparent foods threaten Starbucks if they do not adapt. While Starbucks enjoys brand loyalty and consistent products, concerns over food quality and high prices compared to competitors pose weaknesses. Expanding into tea, consumer goods, and healthier options could strengthen Starbucks against threats like declining coffee prices and growing home coffee consumption. Adaptation will be key for Starbucks to secure future growth amid changing consumer preferences.
Starbucks is recommended as a buy based on its strong financial position and future growth prospects. Starbucks has shown increasing revenues, profit margins, and returns on equity in recent years. A discounted cash flow valuation estimates the stock's fair value at $70.94, above the current price. Starbucks maintains a loyal customer base and is well positioned to benefit from expanding internationally and introducing new products and services. While competition and commodity price fluctuations pose risks, Starbucks' brand strength and innovative strategies are expected to support continued profitable growth.
Starbucks is facing challenges including negative public opinion, dissatisfied employees, and an inability to attract younger consumers. The document analyzes alternatives for Starbucks to address these issues:
1) Pursue a corporate social responsibility strategy to improve reputation and staff morale.
2) Segment consumer markets and customize the Starbucks image and products for different groups like younger customers.
3) Customize products and image for new international markets to prove cultural empathy.
4) Develop a company-wide planning culture to clarify roles and give staff more input, improving service and job satisfaction.
The criteria for evaluating alternatives are that they must enhance Starbucks' value proposition for customers, enable penetrating new markets and improving employee and public perceptions
1
SPACE Matrix
Below you will find a Strategic Position and Action Evaluation Matrix (SPACE Matrix) for Starbucks Coffee Company with two of their competitors, McDonalds and Maxwell House.
Based on the space matrix and previous matrices and reviewing the 2021 Starbucks 10-K and other financial documents, Starbucks is clearly in the aggressive quadrant, and competing well against its competition considering its smaller product mix, and more targeted market. It has a very strong financial position (FP) due to a low D/E ratio, and high current ratio and a high inventory turnover. Starbucks stability position is reflective of the covid pandemics, and the rising inflations pressures, as well as a low barrier to entry for competition, and a higher barrier to entry for Starbucks into established coffee cultures and markets.
Starbucks competitive position is very good, they are higher they the coffee suppliers like Maxwell House, and on the heels of larger corporations like McDonalds. As a note, they have no single worldwide competitor with a product mix close to theirs, so McDonalds, even though a fast food restaurant chain, is considered a competitor with their McCafé offerings. So with a smaller product mix Starbucks is in a very competitive position relative to McDonalds. Its Industry position (IP) is quite high, and it is considered the leader in the coffee industry.
With Starbucks being in the aggressive quadrant, there are a few recommendations to consider. Starbucks should accelerate its growth plans in the markets in which they lead, the USA, Canada, and China to maintain and expand its lead over the competition. This recommendation is based on the relative lack of barriers to entry into their core coffee business, and competitive pressures from the competition.
Starbucks should also consider increasing its product mix and quality and remarketing/repositioning stores as a defensive act to not lose market share to competitors that offer equal quality coffee products, but a greater mix of other food-related products. This should include local food offerings in markets that they are struggling with such as EMEA.
Starbucks should also look to expand its involvement in the Global Coffee Alliance with Nestle as this will expand its global reach. Starbucks has expanded its social responsibility with increased investment in its partners, Starbucks refers to its employees as partners, by advancing social and racial equality, and focusing on partner retention. It has integrated social responsibility as the core of its purpose and “our reason for being.” They have also expanded environmental sustainability programs by declaring a bold aspiration to become planet positive by 2050. Starbucks needs to expand this program worldwide, beyond the markets that they lead to truly show that they truly are committed.
Grand Strategy Matrix
Below you will find a Grand Strategy Matrix for Starbucks Coffee C.
Starbucks has expanded globally from North America to Asia Pacific. While global expansion increased revenues, profits grew unevenly as the company focused on opening new stores. Recently, Starbucks closed 600 stores and its CEO returned to address declining share prices and how to refocus on quality over expansion. The document analyzes Starbucks' financials and global strategy to determine if it should prioritize shareholders or customers going forward.
This document provides an analysis of Starbucks Corporation and the retail coffee market. It begins with an executive summary of Starbucks' past success through aggressive expansion but recent declines. It then defines the problem of how Starbucks can remain profitable. Through a market analysis and Porter's Five Forces, it evaluates challenges like competition and substitutes. A SWOT analysis identifies strengths like brand recognition but also weaknesses such as inflexibility. It concludes with strategies Starbucks could pursue, such as product differentiation, loyalty programs, and expanding into new markets, to renew its brand and build customer loyalty amid current threats.
Starbucks is experiencing declining performance, with net income down 70% in the final quarter of 2008. Revenues have also declined, prompting a 33 cent drop in share price. Sources of declining performance include falling net margins, weaker financial leverage impairing profit enhancement, and aggressive US expansion. While the recession has impacted competitors, Starbucks' internal decisions around expansion and concentration policies also contributed to deteriorating performance. Schultz's strategy focuses on more efficient operations, preserving brand strengths, providing value and innovation. However, the strategy may be too long-term focused and not address pressing issues like costs, net margins, return on equity, asset utilization, and differentiation in an increasingly competitive market.
Starbucks was founded in 1971 in Seattle and has since expanded globally to over 20,000 stores in 62 countries. It offers a range of coffee, tea and food items. Starbucks has experienced strong stock performance over the past five years, with returns of 367.6% compared to 91.69% for the S&P 500. Key value drivers for Starbucks include high profit margins from its upscale customer base and high sales growth through customer loyalty programs. The company has a relatively high debt level that has increased its leverage risk over time.
Starbucks has built a strong global presence with over 22,000 stores in 67 countries. However, new trends toward healthier, more transparent foods threaten Starbucks if they do not adapt. While Starbucks enjoys brand loyalty and consistent products, concerns over food quality and high prices compared to competitors pose weaknesses. Expanding into tea, consumer goods, and healthier options could strengthen Starbucks against threats like declining coffee prices and growing home coffee consumption. Adaptation will be key for Starbucks to secure future growth amid changing consumer preferences.
Starbucks is recommended as a buy based on its strong financial position and future growth prospects. Starbucks has shown increasing revenues, profit margins, and returns on equity in recent years. A discounted cash flow valuation estimates the stock's fair value at $70.94, above the current price. Starbucks maintains a loyal customer base and is well positioned to benefit from expanding internationally and introducing new products and services. While competition and commodity price fluctuations pose risks, Starbucks' brand strength and innovative strategies are expected to support continued profitable growth.
CLC-SWOT Matrix, BCG Matrix, and IE MatrixJose Alonso,WilheminaRossi174
CLC-SWOT Matrix, BCG Matrix, and IE Matrix
Jose Alonso, Tamberlyn Crayton, Dinaja Dowdy, Pauline Morgan, and Brad Overson
Colangelo College of Business, Grand Canyon University Comment by Daniel Smith: Team - well done. Your write-up was thorough, clearly presented and you included critical thinking in your write-up. I hope that this exercise was helpful for you.
Dr. Smith
MGT 660: Strategic Management
May 19, 2021
SWOT Matrix
Strengths
1. Strong brand- Starbucks is a popular well-known coffee brand that continues to prove its self-year after year in growing popularity and sales.
2. Public presence – Starbucks has increased its locations drastically and continues to build its presence in every neighborhood.
3. Supply chain- With having stores across the globe they have managed to become known for their supply chain with its global network of suppliers.
4. Competition acquisition- Due to the financial success, Starbucks has been able to acquire some of its competitors such as Seattle’s Best taking over their portion of the market share. Comment by Daniel Smith: Reasonable strengths - excellent
Weaknesses
1. First and foremost, as most of us coffee drinkers are aware, Starbucks is expensive!
2. They offer coffee just the same as Circle K, Dunkin, McDonald’s, along with the ability to make it yourself in the convenience of your own home.
3. They do not change what they make for the culture, if you have been on vacation, they do not alter what they offer to meet the local culture (could be a strength as well).
Opportunities
1. Coffee is continually growing in popularity, especially amongst the younger generation. The opportunity for expansion is quite high and probably in other countries as well.
2. The opportunity to develop something new and unique to the coffee world.
3. Opportunity to work on getting into more home brewing coffees.
4. Increase online sales (like subscribe and save-similar to amazon)
5. Order from your phone for a pick-up or delivery
Threats
1. Competitors tasting better for a lower cost.
2. Current competitors can make better moves to gain market share.
3. Take over from a local small business, not a chain.
4. Economic Recession- Starbucks coffee is a luxury, not a necessity.
BCG Matrix
The BCG Matrix for Starbucks will help Starbucks in implementing the business-level strategies for its business units. The analysis will first identify where the strategic business units of Starbucks fall within the BCG Matrix for Starbucks.
Stars Question Marks
The financial services strategic business unit is a star in the BCG matrix of Starbucks. It operates in a market that shows potential in the future.
Starbucks earns a significant amount of its income from this SBU. Starbucks should vertically integrate by acquiring other firms in the supply chain ...
Starbucks plans to expand into the Brazilian market by opening stores in Sao Paulo. A PESTEL analysis found the large Brazilian coffee market and growing economy provide opportunities. However, competition from local chains and substitutes pose threats. Starbucks' strengths include its strong brand recognition globally but it also has weaknesses such as higher prices. The strategy is to use internal development by finding a local investor and later purchasing the stores. Marketing will target business people and shoppers by positioning Starbucks as a premium brand offering specialty coffee in a third place environment.
How does your religion play a role in your everydayness Do .docxpooleavelina
How does your religion play a role in your
everydayness? Do you think it defines you
on a partial level or wholistic level?
Do you think religion, in general, creates any conflicts with your day-to-day life? Does it
pose negative performances or actions that are unregulated in your religion?
How has religion impacted your daily life? What do you love most about your
religion/faith?
What are the risks associated with
conducting interviews related to religion?
This week we had to determine one of our methods for our research. I am conducting
interviews with multiple folks and will need to compile some general statistical
information, including financial information (which should be readily accessible, but
could make my process more interesting if there is reluctance). All research contains
some level of risk, and interviews are no exception to that. My main concern is
participant bias, and the risk of folks not being entirely honest about some things,
particularly subjective questions ("how do you feel about...", "why did you/the church..."),
and maybe pandering to the research project in some capacity. What steps will you take
to safeguard your data and ensure it is as pure as possible? How will you "test" the
data? Are there other risks associated with data collection that I'm not considering?
I think this Barna study presents some interesting results that are worth considering as
we prepare to conduct our own research. There are some numbers here that are useful
on a global scale, although they may not speak to our congregations with any
specificity.
Create your own Question regarding Religion
Running head: STARBACKS’ MARKET ANALYSI 1
STARBUCKS’ MARKET ANALYSIS 4
Starbucks’ Market Analysis
Tabatha Hall-Politte
March 1, 2020
Introduction
The success of any organization is based on how well it will be able to align its internal and external operations. Various factors impact the process of the organizations, and thus, it's the role of the organization management to align these factors with organization key objectives (Shaburishvili, 2017). In this case, the study will analyze the market and industrial factors that affect the operation of the Starbucks operation. In this study, the main focus will be laid in the analysis of the emerging that that affects its operation; market and industrial factors and also its strength and weaknesses.
Critical environments factors that affect Starbucks operation
Numerous factors affect the business operation, and these factors play a significant role in determining the performance of the organization. In this case, the study will analyze two factors – technology and globalization. The research will focus on investigating how these two factors impacts Starbuck's operation and performance.
Globalization
The increase in globalization and International corporations affects how the business operates. Globalization affects Starbucks in two main ways ...
This document summarizes a case study about Starbucks' efforts to improve customer satisfaction and speed of service. It finds that while customers report wanting faster service, other factors like friendly staff and rewards programs better predict loyalty. Adding more labor hours may increase service but not enough to meet financial goals. Alternative actions like improved training, rewards, and automated equipment avoid ongoing costs and better address customer priorities.
Starbucks aims to develop a three-year strategic plan. An analysis found strengths in its brand and outlets but overreliance on the CEO. Economic downturns and increased competition threaten profits. A PESTLE analysis showed political, economic, social and technological factors could impact operations. Porter's five forces revealed high threats from substitutes and new entrants. The plan proposes expanding into new markets, developing new products, improving customer service, and conducting promotions. Financial targets are 20% annual sales growth and 15% profit increases. Restructuring and acquisitions could help achieve objectives over three years.
Running head STARBUCKS 1STARBUCKS3.docxtoltonkendal
Running head: STARBUCKS 1
STARBUCKS 3
Starbucks
Name
Institutional Affiliation
Starbucks
As an American company and coffee shop franchise, Starbucks was founded in 1971, Seattle, Washington in 1971. With well over 15,000 outlets globally, the company has been considered as the world’s leading coffee vendor with the majority of the outlets being located in North America (“Company Information”, 2018). As of 2014, the company was estimated to be having a market value of close to $100 Billion. However, this could not have been possible without globalization; globalization has allowed the company to expand beyond the boundaries of the American Nation and influence the economies of other countries. It has also allowed various political powers to interact thus promoting cooperation and finally it has been able to tap into economies that have raised the value of the brand such as that of China and Europe (“Company Information”, 2018). In 2003, Starbucks began its expansion to foreign countries exploiting its potential and thus promoted their economies through the “Starbucks Effect.” This was the emergence of various coffee shops competing with the franchise in selling coffee (Kang & Namkung, 2017). The internet of things can be regarded as one of the most influential aspects that have allowed Starbucks to grow and dominate most markets globally. The company is aggressive in implementing change and this is inclusive of their machines. The company always installs the latest in machinery that allows the outlets to operate at maximum efficiency. Moreover, technology has allowed the franchise to have better interaction with its clients through online tracking of consumer preference. This tracking allows the company to understand what the client expects of the company and makes the necessary changes (Kang & Namkung, 2017). Finally, the company relies on online platforms for the employment of their staff as conventional means are not only expensive but extremely time-consuming.
As stated earlier, the “Starbucks effect” has been influential in the development of various economies through competition. Starbucks as a franchise has created a competitive environment in various markets that has resulted in the company being innovative in its marketing strategies (Kang & Namkung, 2017). This pressure to remain at the top can allow the company to generate above-average returns. Moreover, the brand is recognized by clients globally, this is the only advantage the company has considering that many locals may have other preferences towards other coffee vendors. In the Industrial Organization model, the company already qualifies as being attractive as its management and operation strategies are simple thus giving it room for more modifications to be applied. Moreover, the company applies the strategy of economies of scale whereby, due to its vast size it retails its products at a low and affordable price. This makes the company attractive ...
This strategic analysis report examines Starbucks using various management tools such as SWOT, PESTEL, Porter's Five Forces, and value chain analyses. The report finds that Starbucks has been highly successful, growing from a local Seattle company to over 5000 stores worldwide across four continents. Key to its success has been strong brand equity, excellent customer loyalty, and focus on high quality ingredients. However, it is also overly reliant on U.S. stores and company-operated locations. The report recommends Starbucks further expand internationally, especially in developing markets, and increase licensed stores to mitigate risks.
This report analyzes Starbucks Corporation and issues a buy recommendation. Key points:
- Starbucks is expanding aggressively in China and the Pacific region, which is expected to be a major growth driver. They plan to open half of new stores in this region.
- Starbucks has strong management and leadership that has allowed it to remain dominant through innovative strategies like partnerships and new store formats.
- Valuation models including DCF, DDM, and comparables point to a $63.25 one-year price target, implying 10.5% upside from the current price.
- Risks include economic slowdown in China and increased competition from companies like McDonald's expanding into coffee.
This document analyzes Starbucks and provides an overview of the company, its financials, and a recommendation. It summarizes that Starbucks has grown steadily in recent years but growth slowed in 2016. Financial ratios like ROE are positive but current ratio is low. The document recommends holding the stock if the US economy continues to improve since Starbucks is still expanding globally, but risks remain if the US economy declines as Starbucks products are considered luxury goods.
This report analyzes and compares Green Mountain Coffee Roasters and Starbucks to make an investment recommendation of $40 million. Through financial analysis, it is determined that Starbucks has stronger financial performance and stability. An evaluation of industry trends finds that while both companies are growing, Starbucks is expanding globally and diversifying its product offerings. The marketing strategies of the two companies are also different, with Starbucks focusing on international growth and social media while Green Mountain emphasizes partnerships and the Keurig product. Based on the research, the report recommends a 60/40 split of the $40 million investment between Starbucks and Green Mountain.
Starbucks has steadily grown its beverage revenue over 10 years while expanding its store base. The document analyzes Starbucks' brand strength, adaptability, cost efficiency, and provides a valuation. It finds that Starbucks accurately evaluates trends and executes new initiatives, and allows efficient modification and new endeavors through technology integration. The market slightly overvalues Starbucks, and the group values it at $52 based on conservative projections and a 6.55% WACC.
This document provides a strategic analysis of Starbucks Corporation. It begins with an introduction to the company and overview of the retail coffee and snacks industry. It then analyzes the external environment of the industry using Porter's Five Forces model. Key points are that the threat of new entrants and substitutes are high while bargaining power of buyers and suppliers is moderate. Competitive rivalry is also high to moderate. The document also provides an internal analysis of Starbucks, identifying strengths like its strong brand and locations, and weaknesses like expensive products. Opportunities for growth include expanding into emerging markets and new product offerings. The main threat is increased competition in the mature industry.
Case Study- STARBUCKS: JUST WHO IS THE STARBUCKS CUSTOMER?Rajib Mia
Starbucks initially targeted wealthier, better educated customers who sought the Starbucks experience of hanging out in their stores. As Starbucks rapidly expanded, opening many new stores, their traditional customers declined and were replaced by a new breed of less affluent customers who just wanted coffee on the go. Recognizing the problem, Starbucks cut back store openings and reevaluated their customer segmentation using variables like age, gender, lifestyle, and location. They worked to regain their traditional customers and restore the Starbucks experience. Starbucks is now targeting new customer segments both in the US and abroad, and their profit growth has rebounded as a result of their new segmentation and targeting strategy.
This document analyzes Starbucks' organizational structure and strategies. It discusses Starbucks' mission statement, leadership style, employees and culture, and domestic and international situations. It identifies issues like overexpansion and decreasing demand. Solutions proposed include refocusing on coffee quality, limiting new stores, cultural consultation for international growth, and using technology to improve efficiency. Interviews provide insights from managers and employees. In closing, the document argues Starbucks must recapture average customers, recommit to its mission, and better understand international markets.
Starbucks is a global coffee company and coffeehouse chain headquartered in the US. It generates over $14 billion in annual revenue with over 200,000 employees. Porter's Five Forces analysis indicates rivalry is high in the coffee industry, but the threat of new entrants is low due to market saturation. Starbucks' value chain consists of primary activities like procurement, roasting, and customer service that directly create value, as well as support activities like training and technology that enhance value creation. Starbucks relies on high quality products and excellent customer service for marketing rather than large advertising budgets.
Provide a response to Case 9 The TJX Companies, Inc. (p. 437)—a.docxbriancrawford30935
Provide a response to Case 9: The TJX Companies, Inc. (p. 437)—answer the question at the bottom of text on page 445 (last paragraph). Also, Do not "Design a three year strategic plan..." as outlined in the final statement.
In lieu of this question, you are to answer the following questions:
Develop the projected financial statements that fully assess and evaluate the impact of your proposed strategy. This should include a full balance sheet, income statement, and EPS/EBIT analysis.
Therefore, the 2 items to complete questions/statements are the following:
1. How aggressively should TJX expand globally, and where, and when, to maximize the value of the company for shareholders?
2.Develop Projected Financial Statements that fully assess and evaluate the impact of the proposed strategy. This should include a projected income statement, balance sheet, and EPS/EBIT analysis.
You will need to use information contained in Chapters 7 and 8 in order to successfully complete this assignment.
Write a 2 page paper with 2-3 references discussing supply chain and distribution channels. You may include one or two small graphics to further explain your position.
In your paper explain how you would set up your supply chain and the distribution channel of your product.
Additionally answer the following:
· How would you improve logistics that are commonly used today in order to get your product in the hands of the consumer?
Include a cover sheet and 2-3 references. Please see attached to use as references Please adhere to the Publication Manual of the American Psychological Association (APA), 6th ed., 2nd printing when writing and submitting assignments and papers.
Write
a 2 page paper with 2
-
3 references discussing
supply chain
and
distribution
channels
.
You may include one or two small graphics to further explain your position.
In your paper explain
how you would set up your supply chain and the distribution channel
of
your product.
Additionally answer the following:
·
How would you improve logistics that are commonly used today in order to get your product in the
hands of the consumer?
Include a cover sheet
and 2
-
3 references.
Please see attached to use as references
Please adhere to the Publication Manual of the American Psychological Association
(APA), 6th ed., 2nd printing when writing and submitting assignments and pape
rs.
FORESIGHT Fall 20164
Forecasting PersPectives
INTRODUCTION:
THE SUPPLY CHAIN TRIANGLE
Companies are struggling to balance service to customers, supply chain
costs, and inventory, a balancing act I
depict as the supply chain triangle of Fig-
ure 1.
First, the company needs to deliver service
to customers, the quality of which is af-
fected by the lead time between order and
receipt, the reliability of that lead time,
the breadth of our product portfolio, and
the flexibility of the ordering process.
Second, it tries to deliver that service at
minimal cost. There’s the.
Starbucks Corp. is betting its future on its coffee shops.To do .docxsusanschei
Starbucks Corp. is betting its future on its coffee shops.
To do that, the Seattle-based company has removed a distraction by selling the rights to offer its coffee and tea in grocery and retail stores to Nestle SA for more than $7 billion.
Coffee sellers from Dunkin' Brands Group Inc. to McDonald's Corp. have crowded supermarket shelves with branded bags of ground and roasted beans. Starbucks products will give Switzerland-based Nestle a bigger stake in that fight without having to introduce a new brand to U.S. consumers.
For Starbucks, the consumer packaged-goods business generated $1.8 billion in revenue in fiscal 2017, just 8% of Starbucks's total.
"While consumer packaged goods is an important and highly profitable business, it's small," said Michael Schaefer, head of Euromonitor's global food and beverage practice.
Sales have been slowing at Starbucks coffee shops in the U.S. as mall traffic declines and competition increases. Starbucks has opened higher-end stores under brands called Roastery and Reserve to compete with independent coffee shops and small chains that have grabbed sales from customers willing to pay more for specialty drinks and pastries. There are nearly 33,000 coffee shops in the U.S., according to market-research firm Mintel, up 16% from five years ago.
Starbucks also wants to open more coffee shops in China, a market the Seattle-based company said will eventually overtake the U.S. as its largest. The company recently opened its first Roastery store in Shanghai.
Retail operations in the U.S. and China "are our two big growth engines," Starbucks Chief Executive Kevin Johnson told investors on a call about the deal Monday.
Starbucks has dropped other ancillary businesses recently to focus on its coffee shops. Last fall, Starbucks sold its Tazo tea brand to Unilever for $384 million. The company recently closed its mall-based Teavana tea stores because of weak traffic.
Starbucks shares fell 23 cents to $57.45 on Monday. Nestle stock rose 1.6%.
The deal gives Starbucks an upfront infusion of cash that it plans to return to shareholders through share buybacks. Starbucks said it planned to give $20 billion to shareholders over three years in buybacks and dividends. That might assuage some shareholder concerns as Starbucks works to boost sales growth.
Nestle said it would pay Starbucks $7.15 billion as well as continuing royalties on all sales. Mr. Johnson said the partnership will raise familiarity with the Starbucks brand by getting its ground and whole bean coffee into international markets where it isn't currently sold.
Nestle hopes more coffee sales can offset flagging sales of some of its other packaged-food businesses. As part of the Starbucks deal, Nestle will add Starbucks Reserve, Seattle's Best Coffee and Teavana to a portfolio that includes the Nescafe and Nespresso brands. Nestle will also manage the business of distributing Starbucks K-Cups, the single-serve coffee pods used in Keurig brewers in North America.
.
Starbucks utilizes business intelligence through advanced analytics and data visualization tools to gain insights into customer preferences, market trends, and operational efficiency. The company collects data from various sources like point-of-sale transactions, mobile app usage, and customer feedback. Leveraging predictive modeling and machine learning, Starbucks can forecast demand, optimize inventory, and personalize marketing. This enables Starbucks to anticipate customer needs, streamline operations, enhance the customer experience, innovate offerings, and expand successfully into new markets.
What Should I Write My College Essay About 15Amy Cernava
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5. Request revisions to ensure satisfaction and receive a refund for plagiarized work.
The document provides instructions for requesting writing assistance from HelpWriting.net in 6 steps: 1) Create an account with a password and email. 2) Complete a 10-minute order form providing instructions, sources, and deadline. 3) Review bids from writers and select one based on qualifications. 4) Review the completed paper and authorize payment if satisfied. 5) Request revisions to ensure satisfaction. HelpWriting.net promises original, high-quality work or a full refund.
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CLC-SWOT Matrix, BCG Matrix, and IE MatrixJose Alonso,WilheminaRossi174
CLC-SWOT Matrix, BCG Matrix, and IE Matrix
Jose Alonso, Tamberlyn Crayton, Dinaja Dowdy, Pauline Morgan, and Brad Overson
Colangelo College of Business, Grand Canyon University Comment by Daniel Smith: Team - well done. Your write-up was thorough, clearly presented and you included critical thinking in your write-up. I hope that this exercise was helpful for you.
Dr. Smith
MGT 660: Strategic Management
May 19, 2021
SWOT Matrix
Strengths
1. Strong brand- Starbucks is a popular well-known coffee brand that continues to prove its self-year after year in growing popularity and sales.
2. Public presence – Starbucks has increased its locations drastically and continues to build its presence in every neighborhood.
3. Supply chain- With having stores across the globe they have managed to become known for their supply chain with its global network of suppliers.
4. Competition acquisition- Due to the financial success, Starbucks has been able to acquire some of its competitors such as Seattle’s Best taking over their portion of the market share. Comment by Daniel Smith: Reasonable strengths - excellent
Weaknesses
1. First and foremost, as most of us coffee drinkers are aware, Starbucks is expensive!
2. They offer coffee just the same as Circle K, Dunkin, McDonald’s, along with the ability to make it yourself in the convenience of your own home.
3. They do not change what they make for the culture, if you have been on vacation, they do not alter what they offer to meet the local culture (could be a strength as well).
Opportunities
1. Coffee is continually growing in popularity, especially amongst the younger generation. The opportunity for expansion is quite high and probably in other countries as well.
2. The opportunity to develop something new and unique to the coffee world.
3. Opportunity to work on getting into more home brewing coffees.
4. Increase online sales (like subscribe and save-similar to amazon)
5. Order from your phone for a pick-up or delivery
Threats
1. Competitors tasting better for a lower cost.
2. Current competitors can make better moves to gain market share.
3. Take over from a local small business, not a chain.
4. Economic Recession- Starbucks coffee is a luxury, not a necessity.
BCG Matrix
The BCG Matrix for Starbucks will help Starbucks in implementing the business-level strategies for its business units. The analysis will first identify where the strategic business units of Starbucks fall within the BCG Matrix for Starbucks.
Stars Question Marks
The financial services strategic business unit is a star in the BCG matrix of Starbucks. It operates in a market that shows potential in the future.
Starbucks earns a significant amount of its income from this SBU. Starbucks should vertically integrate by acquiring other firms in the supply chain ...
Starbucks plans to expand into the Brazilian market by opening stores in Sao Paulo. A PESTEL analysis found the large Brazilian coffee market and growing economy provide opportunities. However, competition from local chains and substitutes pose threats. Starbucks' strengths include its strong brand recognition globally but it also has weaknesses such as higher prices. The strategy is to use internal development by finding a local investor and later purchasing the stores. Marketing will target business people and shoppers by positioning Starbucks as a premium brand offering specialty coffee in a third place environment.
How does your religion play a role in your everydayness Do .docxpooleavelina
How does your religion play a role in your
everydayness? Do you think it defines you
on a partial level or wholistic level?
Do you think religion, in general, creates any conflicts with your day-to-day life? Does it
pose negative performances or actions that are unregulated in your religion?
How has religion impacted your daily life? What do you love most about your
religion/faith?
What are the risks associated with
conducting interviews related to religion?
This week we had to determine one of our methods for our research. I am conducting
interviews with multiple folks and will need to compile some general statistical
information, including financial information (which should be readily accessible, but
could make my process more interesting if there is reluctance). All research contains
some level of risk, and interviews are no exception to that. My main concern is
participant bias, and the risk of folks not being entirely honest about some things,
particularly subjective questions ("how do you feel about...", "why did you/the church..."),
and maybe pandering to the research project in some capacity. What steps will you take
to safeguard your data and ensure it is as pure as possible? How will you "test" the
data? Are there other risks associated with data collection that I'm not considering?
I think this Barna study presents some interesting results that are worth considering as
we prepare to conduct our own research. There are some numbers here that are useful
on a global scale, although they may not speak to our congregations with any
specificity.
Create your own Question regarding Religion
Running head: STARBACKS’ MARKET ANALYSI 1
STARBUCKS’ MARKET ANALYSIS 4
Starbucks’ Market Analysis
Tabatha Hall-Politte
March 1, 2020
Introduction
The success of any organization is based on how well it will be able to align its internal and external operations. Various factors impact the process of the organizations, and thus, it's the role of the organization management to align these factors with organization key objectives (Shaburishvili, 2017). In this case, the study will analyze the market and industrial factors that affect the operation of the Starbucks operation. In this study, the main focus will be laid in the analysis of the emerging that that affects its operation; market and industrial factors and also its strength and weaknesses.
Critical environments factors that affect Starbucks operation
Numerous factors affect the business operation, and these factors play a significant role in determining the performance of the organization. In this case, the study will analyze two factors – technology and globalization. The research will focus on investigating how these two factors impacts Starbuck's operation and performance.
Globalization
The increase in globalization and International corporations affects how the business operates. Globalization affects Starbucks in two main ways ...
This document summarizes a case study about Starbucks' efforts to improve customer satisfaction and speed of service. It finds that while customers report wanting faster service, other factors like friendly staff and rewards programs better predict loyalty. Adding more labor hours may increase service but not enough to meet financial goals. Alternative actions like improved training, rewards, and automated equipment avoid ongoing costs and better address customer priorities.
Starbucks aims to develop a three-year strategic plan. An analysis found strengths in its brand and outlets but overreliance on the CEO. Economic downturns and increased competition threaten profits. A PESTLE analysis showed political, economic, social and technological factors could impact operations. Porter's five forces revealed high threats from substitutes and new entrants. The plan proposes expanding into new markets, developing new products, improving customer service, and conducting promotions. Financial targets are 20% annual sales growth and 15% profit increases. Restructuring and acquisitions could help achieve objectives over three years.
Running head STARBUCKS 1STARBUCKS3.docxtoltonkendal
Running head: STARBUCKS 1
STARBUCKS 3
Starbucks
Name
Institutional Affiliation
Starbucks
As an American company and coffee shop franchise, Starbucks was founded in 1971, Seattle, Washington in 1971. With well over 15,000 outlets globally, the company has been considered as the world’s leading coffee vendor with the majority of the outlets being located in North America (“Company Information”, 2018). As of 2014, the company was estimated to be having a market value of close to $100 Billion. However, this could not have been possible without globalization; globalization has allowed the company to expand beyond the boundaries of the American Nation and influence the economies of other countries. It has also allowed various political powers to interact thus promoting cooperation and finally it has been able to tap into economies that have raised the value of the brand such as that of China and Europe (“Company Information”, 2018). In 2003, Starbucks began its expansion to foreign countries exploiting its potential and thus promoted their economies through the “Starbucks Effect.” This was the emergence of various coffee shops competing with the franchise in selling coffee (Kang & Namkung, 2017). The internet of things can be regarded as one of the most influential aspects that have allowed Starbucks to grow and dominate most markets globally. The company is aggressive in implementing change and this is inclusive of their machines. The company always installs the latest in machinery that allows the outlets to operate at maximum efficiency. Moreover, technology has allowed the franchise to have better interaction with its clients through online tracking of consumer preference. This tracking allows the company to understand what the client expects of the company and makes the necessary changes (Kang & Namkung, 2017). Finally, the company relies on online platforms for the employment of their staff as conventional means are not only expensive but extremely time-consuming.
As stated earlier, the “Starbucks effect” has been influential in the development of various economies through competition. Starbucks as a franchise has created a competitive environment in various markets that has resulted in the company being innovative in its marketing strategies (Kang & Namkung, 2017). This pressure to remain at the top can allow the company to generate above-average returns. Moreover, the brand is recognized by clients globally, this is the only advantage the company has considering that many locals may have other preferences towards other coffee vendors. In the Industrial Organization model, the company already qualifies as being attractive as its management and operation strategies are simple thus giving it room for more modifications to be applied. Moreover, the company applies the strategy of economies of scale whereby, due to its vast size it retails its products at a low and affordable price. This makes the company attractive ...
This strategic analysis report examines Starbucks using various management tools such as SWOT, PESTEL, Porter's Five Forces, and value chain analyses. The report finds that Starbucks has been highly successful, growing from a local Seattle company to over 5000 stores worldwide across four continents. Key to its success has been strong brand equity, excellent customer loyalty, and focus on high quality ingredients. However, it is also overly reliant on U.S. stores and company-operated locations. The report recommends Starbucks further expand internationally, especially in developing markets, and increase licensed stores to mitigate risks.
This report analyzes Starbucks Corporation and issues a buy recommendation. Key points:
- Starbucks is expanding aggressively in China and the Pacific region, which is expected to be a major growth driver. They plan to open half of new stores in this region.
- Starbucks has strong management and leadership that has allowed it to remain dominant through innovative strategies like partnerships and new store formats.
- Valuation models including DCF, DDM, and comparables point to a $63.25 one-year price target, implying 10.5% upside from the current price.
- Risks include economic slowdown in China and increased competition from companies like McDonald's expanding into coffee.
This document analyzes Starbucks and provides an overview of the company, its financials, and a recommendation. It summarizes that Starbucks has grown steadily in recent years but growth slowed in 2016. Financial ratios like ROE are positive but current ratio is low. The document recommends holding the stock if the US economy continues to improve since Starbucks is still expanding globally, but risks remain if the US economy declines as Starbucks products are considered luxury goods.
This report analyzes and compares Green Mountain Coffee Roasters and Starbucks to make an investment recommendation of $40 million. Through financial analysis, it is determined that Starbucks has stronger financial performance and stability. An evaluation of industry trends finds that while both companies are growing, Starbucks is expanding globally and diversifying its product offerings. The marketing strategies of the two companies are also different, with Starbucks focusing on international growth and social media while Green Mountain emphasizes partnerships and the Keurig product. Based on the research, the report recommends a 60/40 split of the $40 million investment between Starbucks and Green Mountain.
Starbucks has steadily grown its beverage revenue over 10 years while expanding its store base. The document analyzes Starbucks' brand strength, adaptability, cost efficiency, and provides a valuation. It finds that Starbucks accurately evaluates trends and executes new initiatives, and allows efficient modification and new endeavors through technology integration. The market slightly overvalues Starbucks, and the group values it at $52 based on conservative projections and a 6.55% WACC.
This document provides a strategic analysis of Starbucks Corporation. It begins with an introduction to the company and overview of the retail coffee and snacks industry. It then analyzes the external environment of the industry using Porter's Five Forces model. Key points are that the threat of new entrants and substitutes are high while bargaining power of buyers and suppliers is moderate. Competitive rivalry is also high to moderate. The document also provides an internal analysis of Starbucks, identifying strengths like its strong brand and locations, and weaknesses like expensive products. Opportunities for growth include expanding into emerging markets and new product offerings. The main threat is increased competition in the mature industry.
Case Study- STARBUCKS: JUST WHO IS THE STARBUCKS CUSTOMER?Rajib Mia
Starbucks initially targeted wealthier, better educated customers who sought the Starbucks experience of hanging out in their stores. As Starbucks rapidly expanded, opening many new stores, their traditional customers declined and were replaced by a new breed of less affluent customers who just wanted coffee on the go. Recognizing the problem, Starbucks cut back store openings and reevaluated their customer segmentation using variables like age, gender, lifestyle, and location. They worked to regain their traditional customers and restore the Starbucks experience. Starbucks is now targeting new customer segments both in the US and abroad, and their profit growth has rebounded as a result of their new segmentation and targeting strategy.
This document analyzes Starbucks' organizational structure and strategies. It discusses Starbucks' mission statement, leadership style, employees and culture, and domestic and international situations. It identifies issues like overexpansion and decreasing demand. Solutions proposed include refocusing on coffee quality, limiting new stores, cultural consultation for international growth, and using technology to improve efficiency. Interviews provide insights from managers and employees. In closing, the document argues Starbucks must recapture average customers, recommit to its mission, and better understand international markets.
Starbucks is a global coffee company and coffeehouse chain headquartered in the US. It generates over $14 billion in annual revenue with over 200,000 employees. Porter's Five Forces analysis indicates rivalry is high in the coffee industry, but the threat of new entrants is low due to market saturation. Starbucks' value chain consists of primary activities like procurement, roasting, and customer service that directly create value, as well as support activities like training and technology that enhance value creation. Starbucks relies on high quality products and excellent customer service for marketing rather than large advertising budgets.
Provide a response to Case 9 The TJX Companies, Inc. (p. 437)—a.docxbriancrawford30935
Provide a response to Case 9: The TJX Companies, Inc. (p. 437)—answer the question at the bottom of text on page 445 (last paragraph). Also, Do not "Design a three year strategic plan..." as outlined in the final statement.
In lieu of this question, you are to answer the following questions:
Develop the projected financial statements that fully assess and evaluate the impact of your proposed strategy. This should include a full balance sheet, income statement, and EPS/EBIT analysis.
Therefore, the 2 items to complete questions/statements are the following:
1. How aggressively should TJX expand globally, and where, and when, to maximize the value of the company for shareholders?
2.Develop Projected Financial Statements that fully assess and evaluate the impact of the proposed strategy. This should include a projected income statement, balance sheet, and EPS/EBIT analysis.
You will need to use information contained in Chapters 7 and 8 in order to successfully complete this assignment.
Write a 2 page paper with 2-3 references discussing supply chain and distribution channels. You may include one or two small graphics to further explain your position.
In your paper explain how you would set up your supply chain and the distribution channel of your product.
Additionally answer the following:
· How would you improve logistics that are commonly used today in order to get your product in the hands of the consumer?
Include a cover sheet and 2-3 references. Please see attached to use as references Please adhere to the Publication Manual of the American Psychological Association (APA), 6th ed., 2nd printing when writing and submitting assignments and papers.
Write
a 2 page paper with 2
-
3 references discussing
supply chain
and
distribution
channels
.
You may include one or two small graphics to further explain your position.
In your paper explain
how you would set up your supply chain and the distribution channel
of
your product.
Additionally answer the following:
·
How would you improve logistics that are commonly used today in order to get your product in the
hands of the consumer?
Include a cover sheet
and 2
-
3 references.
Please see attached to use as references
Please adhere to the Publication Manual of the American Psychological Association
(APA), 6th ed., 2nd printing when writing and submitting assignments and pape
rs.
FORESIGHT Fall 20164
Forecasting PersPectives
INTRODUCTION:
THE SUPPLY CHAIN TRIANGLE
Companies are struggling to balance service to customers, supply chain
costs, and inventory, a balancing act I
depict as the supply chain triangle of Fig-
ure 1.
First, the company needs to deliver service
to customers, the quality of which is af-
fected by the lead time between order and
receipt, the reliability of that lead time,
the breadth of our product portfolio, and
the flexibility of the ordering process.
Second, it tries to deliver that service at
minimal cost. There’s the.
Starbucks Corp. is betting its future on its coffee shops.To do .docxsusanschei
Starbucks Corp. is betting its future on its coffee shops.
To do that, the Seattle-based company has removed a distraction by selling the rights to offer its coffee and tea in grocery and retail stores to Nestle SA for more than $7 billion.
Coffee sellers from Dunkin' Brands Group Inc. to McDonald's Corp. have crowded supermarket shelves with branded bags of ground and roasted beans. Starbucks products will give Switzerland-based Nestle a bigger stake in that fight without having to introduce a new brand to U.S. consumers.
For Starbucks, the consumer packaged-goods business generated $1.8 billion in revenue in fiscal 2017, just 8% of Starbucks's total.
"While consumer packaged goods is an important and highly profitable business, it's small," said Michael Schaefer, head of Euromonitor's global food and beverage practice.
Sales have been slowing at Starbucks coffee shops in the U.S. as mall traffic declines and competition increases. Starbucks has opened higher-end stores under brands called Roastery and Reserve to compete with independent coffee shops and small chains that have grabbed sales from customers willing to pay more for specialty drinks and pastries. There are nearly 33,000 coffee shops in the U.S., according to market-research firm Mintel, up 16% from five years ago.
Starbucks also wants to open more coffee shops in China, a market the Seattle-based company said will eventually overtake the U.S. as its largest. The company recently opened its first Roastery store in Shanghai.
Retail operations in the U.S. and China "are our two big growth engines," Starbucks Chief Executive Kevin Johnson told investors on a call about the deal Monday.
Starbucks has dropped other ancillary businesses recently to focus on its coffee shops. Last fall, Starbucks sold its Tazo tea brand to Unilever for $384 million. The company recently closed its mall-based Teavana tea stores because of weak traffic.
Starbucks shares fell 23 cents to $57.45 on Monday. Nestle stock rose 1.6%.
The deal gives Starbucks an upfront infusion of cash that it plans to return to shareholders through share buybacks. Starbucks said it planned to give $20 billion to shareholders over three years in buybacks and dividends. That might assuage some shareholder concerns as Starbucks works to boost sales growth.
Nestle said it would pay Starbucks $7.15 billion as well as continuing royalties on all sales. Mr. Johnson said the partnership will raise familiarity with the Starbucks brand by getting its ground and whole bean coffee into international markets where it isn't currently sold.
Nestle hopes more coffee sales can offset flagging sales of some of its other packaged-food businesses. As part of the Starbucks deal, Nestle will add Starbucks Reserve, Seattle's Best Coffee and Teavana to a portfolio that includes the Nescafe and Nespresso brands. Nestle will also manage the business of distributing Starbucks K-Cups, the single-serve coffee pods used in Keurig brewers in North America.
.
Starbucks utilizes business intelligence through advanced analytics and data visualization tools to gain insights into customer preferences, market trends, and operational efficiency. The company collects data from various sources like point-of-sale transactions, mobile app usage, and customer feedback. Leveraging predictive modeling and machine learning, Starbucks can forecast demand, optimize inventory, and personalize marketing. This enables Starbucks to anticipate customer needs, streamline operations, enhance the customer experience, innovate offerings, and expand successfully into new markets.
Ähnlich wie Application Of Strategy Dynamics Starbucks Corporation (19)
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إضغ بين إيديكم من أقوى الملازم التي صممتها
ملزمة تشريح الجهاز الهيكلي (نظري 3)
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تتميز هذهِ الملزمة بعِدة مُميزات :
1- مُترجمة ترجمة تُناسب جميع المستويات
2- تحتوي على 78 رسم توضيحي لكل كلمة موجودة بالملزمة (لكل كلمة !!!!)
#فهم_ماكو_درخ
3- دقة الكتابة والصور عالية جداً جداً جداً
4- هُنالك بعض المعلومات تم توضيحها بشكل تفصيلي جداً (تُعتبر لدى الطالب أو الطالبة بإنها معلومات مُبهمة ومع ذلك تم توضيح هذهِ المعلومات المُبهمة بشكل تفصيلي جداً
5- الملزمة تشرح نفسها ب نفسها بس تكلك تعال اقراني
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Information and Communication Technology in EducationMJDuyan
(𝐓𝐋𝐄 𝟏𝟎𝟎) (𝐋𝐞𝐬𝐬𝐨𝐧 2)-𝐏𝐫𝐞𝐥𝐢𝐦𝐬
𝐄𝐱𝐩𝐥𝐚𝐢𝐧 𝐭𝐡𝐞 𝐈𝐂𝐓 𝐢𝐧 𝐞𝐝𝐮𝐜𝐚𝐭𝐢𝐨𝐧:
Students will be able to explain the role and impact of Information and Communication Technology (ICT) in education. They will understand how ICT tools, such as computers, the internet, and educational software, enhance learning and teaching processes. By exploring various ICT applications, students will recognize how these technologies facilitate access to information, improve communication, support collaboration, and enable personalized learning experiences.
𝐃𝐢𝐬𝐜𝐮𝐬𝐬 𝐭𝐡𝐞 𝐫𝐞𝐥𝐢𝐚𝐛𝐥𝐞 𝐬𝐨𝐮𝐫𝐜𝐞𝐬 𝐨𝐧 𝐭𝐡𝐞 𝐢𝐧𝐭𝐞𝐫𝐧𝐞𝐭:
-Students will be able to discuss what constitutes reliable sources on the internet. They will learn to identify key characteristics of trustworthy information, such as credibility, accuracy, and authority. By examining different types of online sources, students will develop skills to evaluate the reliability of websites and content, ensuring they can distinguish between reputable information and misinformation.
How to Manage Reception Report in Odoo 17Celine George
A business may deal with both sales and purchases occasionally. They buy things from vendors and then sell them to their customers. Such dealings can be confusing at times. Because multiple clients may inquire about the same product at the same time, after purchasing those products, customers must be assigned to them. Odoo has a tool called Reception Report that can be used to complete this assignment. By enabling this, a reception report comes automatically after confirming a receipt, from which we can assign products to orders.
Brand Guideline of Bashundhara A4 Paper - 2024khabri85
It outlines the basic identity elements such as symbol, logotype, colors, and typefaces. It provides examples of applying the identity to materials like letterhead, business cards, reports, folders, and websites.
Application Of Strategy Dynamics Starbucks Corporation
1. 1
Pascal Gambardella, Ph.D.
CSC
12708 Chilton Circle
Silver Spring MD, 20904
301-346-5398
pgambard@csc.com
Strategy Dynamics (Warren, 2008) provides a quantitative, resource-based approach
to understanding a firm’s performance over time. This paper describes a strategy
analysis of Starbucks Corporation using Strategy Dynamics. It demonstrates the
usefulness of this approach in addressing business performance issues for a real-
world company. The strategic architecture, a key artifact of the approach, is a model
that captures the interactions of a firm’s tangible resources, management decisions,
and external factors. Starbuck’s strategic architecture for its retail store business
was developed using employee, store, and financial data from Starbuck’s annual
report; and, other public information. The strategic architecture and related models
were used to explore several issues that can influence Starbuck’s strategy: customers
with less discretionary income, expanding too fast, impact of staff layoffs on the
quality of service, getting and maintaining loyal customers, and rivalry with
competitors.
Keywords: strategy dynamics, strategy, strategic architecture, Starbucks
“To inspire and nurture the human spirit— one person, one cup, and one
neighborhood at a time.” Starbucks Mission, Starbucks website
1.1. Background and Scope
Starbucks is a public company that operates a chain of stores that sells high-quality
coffee. Its typical company-owned store has a pleasant, coffee-house atmosphere
replete with couches and Wi-Fi. Starbuck also licenses stores, not to individuals, but
to other businesses. For example, in the US Starbucks licenses stores to Barnes and
Noble booksellers. Some of these establishments provide similar Starbucks
atmospheres; others just have a counter to sell coffee and pastries. Starbuck’s stores
account for about 90% of Starbuck’s revenue.
This paper describes a strategy analysis of Starbucks using Strategy Dynamics
(Warren, 2008). The scope of the analysis was Starbuck’s company-stores. The
2. 2
results are illustrative. Data from Starbucks annual reports and other public sources
were used in the analysis, however many assumptions needed to be made to fill in
gaps in the information. So rather than provide detailed numbers that Starbucks can
use to define their strategy, this report provides a useful approach that Starbucks, if
using the approach, would need to fill in the necessary details to make the analysis
more realistic.
1.2. Starbucks Issues
As illustrated below, Starbucks profit (net earnings) dropped significantly in 2008
and its rate of revenue increase began to slow.
FIGURE 1-1
Starbucks Profit and Revenue
Starbucks lists the average sales growth increase each year in comparable stores,
which are stores that have been opened 13 months or more. To better understand the
meaning of this growth assume a store made one million dollars in 1997, then the
following plot illustrates how much it would make per year over the years based on
the percent growth reported by Starbucks. The percent became negative for the first
time in 2008.
3. 3
FIGURE 1-2
Illustrative Example of Comparative Store Growth
From a profit, revenue, and comparative store view Starbuck’s business appears to be
stalling. No one issue may be responsible for Starbuck’s current problems. Also there
may be no simple cause and effect. For example, Starbucks may have benefited early
in its history by word of mouth (positive feedback): the snowballing effect of
potential customers becoming loyal customers after being told of the great coffee and
atmosphere from loyal customers. On the other hand (negative feedback) if Starbucks
fires many employees or begins having a higher attrition rate, quality of service may
decline, resulting in fewer customers who will tell their friends not to come thus
reducing the number of potential customers.
The following sessions discuss three possible issues confronting Starbucks.
1.2.1. Less Discretionary Income?
Because of current, poor economic conditions, customers may have less discretionary
income to spend. The pool of potential and active Starbucks customers may decrease
based on these conditions.
Yet other companies are doing well despite the poor economy. Lauren Shepherd of
AP reported that McDonald’s same store sales rose 8.5% in October 2008. She
speculated that people were “seeking value” and going to McDonalds. McDonalds
and Starbucks do cater to different market segments with some overlap. However,
perhaps Starbucks can also improve its performance despite the current economic
crisis.
1.2.2. Expanding too Fast?
Has Starbuck’s expanded too fast by opening too many stores each year? In 2008,
Starbucks decided to close 600 stores in the US – that is about 8% of US company-
owned stores. One way to increase the number of customers is too keep opening new
stores. However what is a good rate to do this?
Are there too many Starbucks stores in any given location? I went to the Starbuck’s
website and found the stores within an ever increasing area around my home. The
results were:
4. 4
• 2 miles from home = 2 stores
• 5 miles from home = 12 stores
• 10 miles from home = 60 stores
• 20 miles from home = 253 stores
By increasing the density of stores each year Starbucks may be reaching customer
saturation.
1.2.3. Increased Competition?
Starbucks faces increased competition from fast-food chains. According to
Morningstar, although Starbucks competes with similar coffee shops that have a
coffee-house environment, its major competitors for the coffee itself are the fast-food
firms McDonalds and Dunkin’ Donuts. Starbucks has about 11500 US locations and
its nearest coffee-house rival is Caribou Coffee with 500 US stores.
After a disappointing 4th
quarter in 2008, Morningstar analyst John Owens
(November 11, 2008) said:
“Starbucks still dominates specialty coffee retailing, and fears of from rising
competition from the fast food sector are overblown, in our view.”
Starbucks does face competition from the fast-food industry. Owens goes further and
states:
“We believe McDonalds, Dunkin’ Donuts, and other fast food chains compete
more on price, while Starbucks caters to customers aspiring to a higher-end
experience, with baristas handcrafting and customizing the drinks. Another source
of differentiation is Starbucks’ stylish cafes, offering customers a “third place”
where they can relax and work.”
Starbucks started making breakfast dishes like McDonalds, but stopped after
customers complained that the smell detracted from the coffee house atmosphere.
2.1. Introduction
Part 1 discussed Starbucks current issues of decreasing profit and slowing revenue. It
also indicated some possible factors that may have contributed to these issues. What
approach can Starbucks use to create, implement, and maintain a recovery and
growth strategy?
Strategy Dynamics provides a quantitative, resource-based approach to understanding
a firm’s performance over time:
• Why a firm has reached its current state.
• Where it will go if it retains the same approach.
• How it can set appropriate objectives to improve performance.
Strategy Dynamics provides a language for the quantitative expression of strategy
and enables “what if” scenarios. The approach is taken in a series of steps, which are
documented in detail as worksheets in the Technical Appendix. Each worksheet
describes a model that can illustrate different strategic approaches. The following
discussion summarizes the approach and illustrates results using simulations. The
5. 5
Mystrategy software was used to generate the models and many of the figures in this
paper.
2.2. Performance over Time – Principal Objective
Starbuck’s principal objective is an increase in profits over time. Figure 2-1
represents actual profits through fiscal 2008. The decrease in profits in 2008
represents what Starbucks hopes is a temporary setback. The figure also indicates a
preferred future profit profile and a feared profile if Starbuck’s policies and/or the
current economic climate remain on their current course. Despite current economic
conditions, a presupposition of Strategy Dynamics is that a firm may be able to
greatly improve its performance through a change in its strategies and policies.
FIGURE 2-1
Starbucks Profit (Net Earnings)
2.3. Strategic Architecture
The strategic architecture is a model that captures the interactions of a firm’s tangible
resources, management decisions, and external factors. Starbuck’s strategic
architecture for its retail store business was developed using employee, store, and
financial data from Starbuck’s annual reports.
Figure 2-2 lists the supply side of this architecture. It consists of three major
resources: store staff, specialty staff, and company-owned stores. Specialty staff
supports non-store activities such as dealing with licensed stores and processing
coffee at Starbuck’s coffee plants. Each resource has an inflow and outflow.
Starbucks strategy decisions influence these flows. For example, Starbucks decides
how many stores to increase each year and how many people to hire. Also, its
employee policies influence the rate staff leave. It has had an 80% employee turnover
rate compared with 300% for fast food chains.
7. 7
Figure 2-3 illustrates a major part of the Demand Side of the strategic architecture.
The principal resource is Starbuck’s store customers. Even though this resource is not
“owned” by Starbucks, Starbucks can behave in ways that both increase or decrease
its stock of store customers.
9. 9
2.3.1. Discretionary Income
“Starbucks, a brand that encouraged consumers to trade up, is changing its tack after
discovering that its most faithful customers are saving money in part by making fewer
visits to the chain” – Janet Adamy, Wall Street Journal, December 5, 2008
In section 1.2.1, I mentioned that customers may have less discretionary income to
spend because of current economic conditions (e.g., many have had a 35% drop in
their investment portfolios and others are losing their jobs).
To illustrate the type of “what if” scenarios to run using the Strategic Architecture,
let’s assume that because of economic conditions loyal Starbucks customers visit
Starbucks the same number of times each week, but spend 20% less. The following
diagram shows the results of two runs. I tried to mirror current conditions by
assuming:
• The rate of store expansion was fixed for both runs with a leveling off in 2008 and
2009 and an increase in subsequent years.
• The rate of customer growth drops slightly in 2008 and 2009, but continues to
grown at a faster rate in subsequent years.
The following runs were performed:
• Run 1 - Business as Usual – Customers spend an average of $30 a week from
1998 to 2012. The average number of customer visits per week is 6 and the
amount spent per visit is $5
• Run 2 - Impact of Less Discretionary Income - Customers begin spending less
in 2007, down to an average of $24 per week, and then back to $30 in 2010 as
illustrated in Figure 2-4. The average number of customer visits per week is still
6.
10. 10
FIGURE 2-4
Amount Spent Per Visit
Figure 2-5 illustrates the results. The green lines correspond to Run 1 (business as
usual) and the black lines to Run 2 (customers spend 20% less). The red line was
derived from actual Starbucks data. The red plotted data has the letter “Sk” after the
description in the plot; this means sketched data versus simulated data. The sketched
data is derived from Starbucks fiscal reports.
FIGURE 2-5
Results of a 20% Decrease in Loyal Customer Purchases in 2008 and 2009
A 20% decrease in customer spending significantly impacts the bottom line going
from positive to negative profit. Beverage sales account for 75% of Starbucks
revenue. Perhaps this is the reason why Starbucks does not want to lower the price of
its $4 coffee drinks. However, other alternative may exist to increase profit, e.g.,
winning more customers and cutting costs. Also, through different marketing
campaigns, Starbucks may find a way to effectively lower its beverage prices while
gaining more customers to compensate.
11. 11
Recommendation to Starbucks: Consider the effect of lowering your beverage
prices to deal with the current economic crisis, or cutting costs. Other alternatives
may be to find ways to increase your loyal customer base.
The above model was created in November 2008. On March 18, 2009 Starbucks
announced that it was focusing its attention on increasing profits in existing stores by:
“aligning the company’s cost structure to its current business strategy with a planned
$500 million structural expense reduction in fiscal 2009” It is also “improving
operational efficiencies.” So rather than significantly lower its beverage price, it is
choosing to find ways to cut costs through less structural expansion and improved
operational efficiencies.
2.3.2. Increasing Density of Stores
In section 1.1.2 I mentioned that the number of Starbucks stores per unit of area may
be becoming too dense. In this situation the number of new customers won per new
store may drop. The strategic architecture can be used to see the possible effects of
this issue. Table 2-1 lists plots of the number of customers/year brought in by new
stores each year for two situations. The first situation (Run 1) is more of a hope that
every time a store opens Starbucks gains more customers at an increasing rate. In the
second situation (Run 2) for year 2008 and beyond stores bring in less and less new
customers because the number of stores has become too dense and customers could
easily visit many stores.
12. 12
TABLE 2-1. Runs that Examine the Effect of Store Density
The following figure illustrates the results of these runs. The purple line corresponds
to Run 1 (increasing customers brought in) and the green line to Run 2 (decrease in
customers due to higher store density). The red line illustrates data based on derived
data from Starbucks fiscal reports.
13. 13
FIGURE 2-6
Runs Illustrating the Effect of Having a Higher Store Density
In these runs the effect of increasing the density of stores decreases profits and
revenues. If we compare the profits in 2012 with those in 2008, the change is $347
million.
This model was a rough way to estimate the effect increasing store density.
Recommendation to Starbucks: Consider the effect of store density on gaining new
customers when deciding where to place a new store.
2.4. Staff and Staff Experience
Starbucks has been my home now for a number of years. It has been a fantastic
place to work for, one I wouldn't hesitate to enthusiastically recommend to anyone. I
can't do that anymore. ... Here's the thing, we are as busy as ever. Yet the powers
that be have told us we have to cut labor, be more efficient, sales are down. Less
experienced baristas are having their hours cut to near or below the level of even
making them worth having around. That puts more weight on the experienced
baristas. But they are cutting the margins on the experienced baristas and shift
supervisors as well. And the weight on the managers is intense by this point.
Basically without saying it, they are telling us to work off the clock.” Unknown
Starbucks Barista, December 10, 2008 (http://starbucksgossip.typepad.com/)
Starbucks is changing some polices regarding its staff. It is considering laying-off
people and asking other people to commit to working more hours per week.
Starbucks wants to increase barista hours to at least 32 hrs each week (only managers
get to work 40 hrs). They also want the baristas to commit to be available to work
70% of the available store hours. My local Starbucks is open 110 hours a week, so
for this store a barista would need to be available to work during 77 hrs per week.
Many feel it is unfair to demand so much availability because Starbucks has not
guaranteed that baristas will actually work at least 32 hrs/week. To be fair to
Starbucks, they think that this new approach will result in lower turnover and lower
training costs (Adamy, October 2008). The short term effect, however, could be a
higher turnover as unhappy workers leave or are fired.
14. 14
The figure below implies an experienced staff is needed to make perfect coffee.
Suppose baristas are unhappy and have a higher turnover rate. What could be the
effect of this be on the quality of service?
FIGURE 2-7
Starbucks Ad on Side of Chicago Building
The model illustrated in the figure below examines Starbucks staff and the associated
attribute of total experience. The model can also be used to compute “experience per
store” which can be related to the quality of service: the less “experience the less the
quality of service (and vice versa).”
15. 15
260000.00
0.00
0.00
Store Staff
50.00
0.00
0.00
Store Staff hired per year
30000.00
0.00
0.00
Store Staff leaving per year
2.00
0.00
0.00
Staff Turnover Fraction Run 2
2.00
0.00
0.00
Hiring Fraction Run 2
1000.00
0.00
0.00
Total Experience
100.00
0.00
0.00
Experience added per year
100.00
0.00
0.00
Experience lost per year
28000.00
Total initial staff
10.00
0.00
0.30
Average experience per new person hired in years
10.00
0.00
0.00
Average experience per staff in years per person260000.00
0.00
0.00
[Store Staff]
1.00
0.00
0.00
Workforce firing
10.00
0.00
0.07
fraction fired
1.00
0.00
0.00
Firing Period
10089.97
0.00
0.00
Company Ow ned Stores
10.00
0.00
0.00
Experience per store
10.00
0.00
0.00
Staff per Store
260000.00
0.00
0.00
[Store Staff]
10089.97
0.00
0.00
[Company Ow ned Stores]
2.00
0.00
0.00
Hiring Function Run 1
10.00
0.00
1.00
Run Sw itch
10.00
0.00
1.00
[Run Sw itch]
10.00
0.00
0.00
Staff Turnover Fraction Run 1
FIGURE 2-8
Store Staff and Total Experience
16. 16
Using this model we can conduct an experiment to gauge the affect of a larger staff
turnover due to staff unhappiness. The unknown barista above suggests that “we are
as busy as ever”, so let’s assume roughly the same number of staff per store is
needed. If the turnover is higher, then more staff needs to be hired. This experiment
has the following runs. In both runs hiring was constrained to provide a reasonable
staff per store range from 2007 to 2012.
Run 1 – Maintaining an 80% turnover rate.
Run 2 – Staff turnover increases to 150% beginning in 2008 and in
subsequent years.
The hiring fraction (= hiring rate/100) and turnover fraction (= turnover rate/100)
assumed for both runs are listed in the following figure. Notice that Starbucks has
started to decrease the hiring rate in Run 1 while hopefully still maintaining an 80%
turnover rate. On the other hand in Run 2, Starbucks has had to increase the hiring
rate because of a larger turnover rate.
FIGURE 2-9
Hiring and Turnover Fractions for Run 1 (upper plots, green) and Run 2 (lower plots, blue)
The following figure illustrates the store staff and the staff per store for the two runs.
The red line in the Store Staff plot corresponds to Starbucks staff estimated from
Starbucks employee data. The green lines correspond to Run 1 (80% turnover) and
the blue lines to Run 2 (150% turnover post-2008). The left plot illustrates the results
17. 17
of our goal to be close to our estimate of store staff from 1998 to 2007. The estimate
(i.e., red line) was based on Starbucks fiscal report data. The right plot illustrates the
results of our goal to constrain the staff per store to be close (e.g. within 3 people) for
both runs from 2007 through 2012.
FIGURE 2-10
Store Staff and Staff per Store
The next figure illustrates the “Experience per Store” and “Total (Staff) Experience”
for each run. Notice that the experience drops significantly when turnover is higher
(blue lines). It does not appear that it will get to previous levels any time soon!
Hence, the quality of service per store may drop and many loyal customers may stop
coming to Starbucks. Then, Starbucks may need to close more stores. How “quality
of service” affects other resources such as store customers, staff, and number of
stores can also be incorporated into the models.
!
FIGURE 2-11
Staff Experience
This was a simplified situation to illustrate the approach. A more refined model
would need to change the time scale from years to months to provide better
monitoring and control. The extent of staff training and many other factors may also
18. 18
need to be considered. Starbucks can use this approach to evaluate the effectiveness
of its new policies.
Recommendation to Starbucks: Monitor the effect of staff turnover on staff
experience and quality of service in stores.
2.5. The Customer Pipeline
The customer choice pipeline provides a mechanism for Starbucks to develop one of
its most important resources: its customers. The pipeline looks at the following
mutually exclusive groups. At any give time an individual may belong to only one of
these groups:
• Aware but not Interested. Potential Store Customers aware (of Starbucks) but
not interested
• Interested but not Buying. Potential Store Customers interested but not buying.
• Disloyal (and Buying). Starbucks Store Customers buying but disloyal. Being
disloyal means that customers will frequent both Starbucks and competitor’s
stores.
• Loyal. Loyal Starbucks Store Customers. They just frequent Starbucks. One of
my son’s friends worked at Starbucks. He said 90% of the customers came in 2-3
times a day.
Figure 2-12 illustrates the customer choice pipeline (see the Technical Appendix for
assumptions and details). The goal is to move customers from “Aware but not
Interested” to “Loyal Customers.” The strategy entails deciding how best to do
this. In this pipeline we look at 12 months in the past and plan what to do for 24
months in the future. For the pipeline:
• Customer Movement. Customers can either go up or down the chain.
• Spend. Total Marketing Spend = Value Ad Spend + Trial Promotions + Loyalty
Promotions
• Present. Month 12 is the present.
What is the best way to allocate the advertising dollars? To illustrate the approach, I
considered three situations, which are described in Table 2-2.
20. 20
TABLE 2-2. Starbucks Customer Choice Pipeline Run Descriptions
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The results are given in the following figure. Notice that Run 2 eventually leads to
the same number of customers as Run 1; however Run 3 does provide a decided
advantage.
21. 21
FIGURE 2-13
Starbuck’s Customer Choice Pipeline Run Results
Marketing costs could be broken out in the strategic architecture and its effect on
adding new customers on profit can be assessed
Recommendation to Starbucks: Use a customer choice pipeline to help decide how
to spend marketing dollars to best move customers up along the pipeline.
22. 22
2.6. Rivalry
“Michelle Gass, a Starbucks executive vice president, said the company is paying
keen attention to McDonalds’s Corp. restaurants in Detroit and Kansas City, the first
markets where the fast food chain sold lattes, cappuccinos and other espresso drinks.
She said that Starbucks locations in those markets haven’t seen a change in their
performance trends, a sign that McDonalds may not cut into Starbucks sales.” Janet
Adamy, Wall Street Journal, December 5, 2008
In the US (and maybe internationally), Starbuck’s main competitors are Dunkin’
Donuts and McDonalds. These companies are actively seeking to take Starbucks
coffee business. For example, earlier this year when Starbucks closed all their stores
to retrain baristas, Dunkin’ Donuts offered a $0.99 cup of coffee during the hours of
closure. A recent McDonald’s billboard is featured in the following figure.
FIGURE 2-14
Recent Billboard outside Starbucks’ Seattle Headquarters
In its stores, Starbucks sells “user experience” and not so much a product; so others
like McDonald may find it harder to compete. These competitors don’t have the
coffee house atmosphere of Starbucks. Yet in small college towns like Annapolis
Maryland (St Johns College, US Navy Academy) or Boulder Colorado (University of
Colorado) Starbucks has competition with many other establishments that do provide
a coffeehouse atmosphere.
I provide one example of a model that deals with rivalry by considering the
competition of Starbucks with other coffee-houses in the college town of Boulder
Colorado. Figure 2-15 illustrates the model (with the assumptions and details
discussed in the Technical Appendix).
24. 24
The rivalry is evaluated according to three criteria:
• Price. Starbucks (usually) maintains the high price of its special beverages. On
occasion Starbucks has lowered the price of a regular cup of coffee. During the
US presidential election Starbucks offered a free cup of regular coffee to anyone
who voted
• Product Performance. This includes the many product options.
• Store Atmosphere. Starbucks has WI-FI and comfortable seating in many stores.
Each of the following runs assumes a fictitious Starbucks scenario and is illustrative
of how this model works. In all the runs, month 12 corresponds to the present.
Run 1: Starbucks increases Store Atmosphere and Product Performance. Figure
2-16 illustrates the first run. In the past Starbucks was losing customers to rivals
during the previous 12 months so it decided to improve its product portfolio and
increase special events held at its stores. However, it kept the price of its special
beverages (e.g., Decaf Grande Skim Lattes) fixed. The result is that it managed to
prevent any more losses to rivals; however, it did not make any gains either. This
assumes that its rivals did nothing to respond to Starbuck’s changes.
"
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FIGURE 2-16
Run 1 Results of Starbucks Increasing Atmosphere and Product Performance
Run 2 – In addition to Starbuck’s actions in Run 1, Starbucks drops price by
$0.20 for about six months. Rivals don’t respond. In this run Starbucks also
decided to effectively lower its price for special beverages by giving college students
and faculty discounts for 6 months (month 12 through 18) and discontinue discounts
after that time. Figure 2-17 illustrates the results. Starbucks does gain more
customers from its rivals and maintains that gain after month 18.
25. 25
"
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FIGURE 2-17
Run 2 Results of Starbucks Cutting Effective Price for 6 Months
Run 3 – Starbucks acts as in Runs 1 and 2. However, after the Starbucks price
cut rivals respond a few months later with a $0.40 price cut. In this run, Starbucks
rivals realize that Starbucks is giving discounts and do the same for 6 months
beginning in month 14.
"
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FIGURE 2-18
Run 3 Results of Rivals Responding to Starbucks Price Cut
The following table summarizes the results of these runs. In Run 1 by increasing
Store Atmosphere and Product Performance, Starbucks managed to win some
26. 26
customers from rivals over a 12 month period despite maintaining a higher price for
special beverages. In Run 2, Starbucks decided to also lower its price by $0.20. It still
maintained a higher price than its rivals. It brought in significantly more customers.
In Run 3, rivals respond to Starbuck’s Run 2 strategy by lowering their price by
$0.40. However, that is not enough to get customers back from Starbucks. On the
other hand, Starbucks did much worse than in Run 2 and only ended up slightly
ahead of its rivals.
TABLE 2-3. Type 2 Rivalry Results
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Recommendation to Starbucks: In rivalry with similar coffee houses, consider
monitoring your revenue and customer visits and consider improving store
atmosphere and product performance with respect to these rivals. More importantly,
consider lowering the effective price on special beverages for a short period to win
customers and revenue from rivals.
2.7. Conclusion
Strategy Dynamics is a resource-based approach to understanding and improving a
firm’s performance over time. Its central theme is that resources (whether owned or
not by a firm) drive performance. This paper presented an application of Strategy
Dynamics to the Starbucks Corporation and used several scenarios to illustrate the
approach.
Using public data I created resource-based models and posed and asked questions
about how Starbucks could improve its performance, including:
• How can Starbucks deal with customers having less discretionary income to
spend?
• When is it appropriate to open new stores to bring in new customers and when is
it time to cut back on store expansion?
• What are the consequences of an increased turnover in staff? How will an
increased turnover rate affect overall staff experience (which in turn can affect
quality of service)?
• How can Starbucks spend marketing dollars to best create loyal customers?
• How can Starbucks deal with rivals?
Starbucks could do better than I have with this approach. With the information they
have about their company and customers, they could provide a quantifiable strategic
approach to their business. Furthermore, just going through the process of creating
27. 27
systems dynamics diagrams can help stimulate new ideas about their strategy and
improve their business performance.
Here are some final observations about the Strategy Dynamics approach:
• Not just one model was used, but several related ones; each model addressed a
particular issue.
• Models can be used as a communication and brainstorming vehicles (e.g.,
customer pipeline)
• Strategy Dynamics would be great in creating business school case studies. Even
a financial analyst who follows a particular company would benefit.
28. 28
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