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EXECUTIVE POST GRADUATE PROGRAMME IN MANAGEMENT (NMP-25) ENERGY MANAGEMENT (EM-12) GROUP 09 ANUJ GUPTA KRITAGYA VAIRAGI PAWAN PUROHIT SMITHA HS SHYAM KUMAR SHARMA NIKHIL BHATT :25NMP09 :25NMP20 :25NMP31 :25NMP42 :25NMP53 :12EM09
STARBUCKS - COMPANY
Market Leader in USA Coffee Industry Over 1000 retail locations in 32 markets Over 20000 dedicated partners (employees) Guiding Principles: Develop satisfied customers Apply the highest standards of excellence to the purchasing , roasting and fresh delivery of coffee Embrace diversity as an essential component of the business way Recognise the profitability is essential to future success
*Data provided is as per Companys 1996 annual report
THREATS Fragile state of worldwide production of speciality coffee Cultural and Political issues in foreign countries Other substitute products such as softdrinks, alcoholic beverages
COMPETITION
Market Cap ($mm) as on March 25th, 1997
225.6
440.2 Starbucks Others 100.6 Cara Van Houtte Second Cup 2438.5 137.2
Starbucks is the main coffee player in the United States with no comparable competitor
EXISTING RIVALRY (MEDIUM) Around 3485 competitors exists Competitors such as Second Cup, Caribou, Coffee People etc exists but none has brand image comparable to that of Starbucks
BARGAINING POWER OF CONSUMER (LOW) There is no comparable competitor for consumers to move away from Starbucks The coffee consumption is on rise whereas for other beverages its declining Consumers do not shift back to low quality after specialty coffee
THREAT OF NEW ENTRANTS (MEDIUM) Although, entry & exit barriers are easy, the brand is so established that there is no immediate threat Some market share may be lost, regionally, to new entrants
WAY FORWARD
Concentrate on its core competence:
Continue providing a wholesome environment to its consumers in its retail outlets Speciality Coffee Employee Satisfaction and training
Do not serve coffee in food chains like McDonalds that may not provide the Starbucks experience and dilute its brand
Start offering its franchise in established markets Use its national brand image and penetrate regional markets by advertising extensively
In new international markets, it should start with a joint venture with some established business house