Assignment #1

 

Starbucks Coffee was founded in Seattle in 1971, which had become an international company and global coffee-house chain. In the industry of retail coffee-house sales, Starbucks had more than 15,000 stores all over the world by 2007. According to the Starbucks’ materials and cases, a SWOT analysis for mis-1990s will be given. In addition, a strategy will be recommended to Starbucks and be evaluated realized from mid-1990s to 2007. 星巴克咖啡公司成立于1971年，在西雅圖，這已成為一個國際性的公司，全球咖啡房子鏈。星巴克咖啡零售行業的房屋銷售，由2007年在世界各地擁有超過15,000家門店。據星巴克的材料和案例，誤20世紀90年代將一個SWOT分析。此外，策略將被推薦到星巴克，并予以評價，實現了從20世紀90年代中期到2007年。

 

From the internal perspective, strength and weakness of Starbucks are considered. The first strength of Starbucks in 1990s was its high quality. Starbucks selected the finest Arabica beans to make sure the highest standards of quality coffee offered to customers. Starbucks bought its own coffee direct from producing countries rather than relying on wholesalers. The second strength was human resources corporate culture. Starbucks hired the talented people and training them. Starbucks offered the health-care coverage to all employees who worked 20 hours or more a week. It attracted strong, committed candidates to work and to provide better services. In addition, excellent employees enhanced the relationship between Starbucks brand and customers. The third strength was Starbucks’ expansion of specialty coffee market. Larger number of customer started drinking Starbucks coffee on a regular basis in the early 1990s in LA, San Francisco, Chicago and other cities. Furthermore, Starbucks boomed revenues and earned a lot of good reputation. One of Starbucks weakness in the 1990s was the financial problem caused by its aggressive expansion. In North America, Starbucks owned all of its retail outlets instead of licensing arrangement. However, Starbucks depended heavily on equity and debt financing to expand. Its competitor like Seattle’s Best Coffee and the Second Cup all chose franchising and thus need less internal financing to expansion. Furthermore, the other weakness was brand dilution. Due to the diversification of the products such as providing Starbucks coffee in restaurant and airplane, it made the image of Starbucks products boundary indistinct. 從內部的角度來看，被認為是強弱星巴克。 20世紀90年代的星巴克在第一強度是它的高品質。星巴克選擇了最好的阿拉比卡咖啡豆，以確保向客戶提供最高標準的高品質的咖啡。星巴克購買了直接從自家的咖啡生產國，而不是依賴于批發商。第二強度是人力資源的企業文化。星巴克聘請人才和培養他們。星巴克提供的醫療保險工作20個小時，一個星期或更給所有員工。它吸引了強大的工作，提供更好的服務，承諾的候選人。此外，優秀的員工提升星巴克的品牌和客戶之間的關系。第三強度的特種咖啡市場是星巴克的擴張。客戶開始大量飲用星巴克咖啡在20世紀90年代初在洛杉磯，舊金山，芝加哥等城市定期。此外，星巴克蓬勃發展的收入和良好的信譽贏得了很多。星巴克在20世紀90年代的弱點之一是其激進的擴張所造成的金融問題。在北美，星巴克擁有所有的零售店，而不是發牌安排。然而，星巴克股權和債務融資，以擴大在很大程度上取決于。西雅圖最佳咖啡第二杯像其競爭對手都選擇了特許經營，因此需要較少的內部融資擴張。此外，其他的弱點是品牌稀釋。由于多樣化的產品，如餐廳和飛機提供星巴克咖啡，星巴克的產品邊界似有似無的形象。

 

From the external perspective, the opportunities and threats existed simultaneously. One opportunity of Starbucks in the 1990s was the growth demand for specialty coffee. Besides, new distribution channel provided opportunity to get more customers. For example, the shopping mall, grocery, and international market were an area of opportunity for locating coffee house and it had high rate of coffee consumption. Coffee house in these place not only provided coffee drinks but also was a break place. Starbucks also launched a new American online cafe store to become a global company. However, the threat of Starbucks in the 1990s mainly came from the growth of major coffee-shop competitors, which were franchisers and operating risk at the store level, like Second Cup. Substitutes such as tea, juice, soft dri #p#分頁標題#e#http://www.400190.com/scxzy/  nks, and other coffee and non- coffee-related drinks, compete with the Starbucks as well. Nevertheless, the consumption of specialty coffee was not declining significantly due to these substitutes. 

 

By synthesizing the OT and SW factors, strategic options that help Starbucks create and capture value are suggested in the SWOT synthesis table below.

 

Strengths:

•High quality

•Human resources corporate culture

•Market expansion and good reputation Weaknesses:

•financial problems caused by aggressive expansion

•brand dilution

Opportunities:

•Growing demand for specialty coffee

•Different distribution channels

•Coffee house provide coffee and rest place SO Strategies:

•Diversify product

•Acquisition and merger

•Expansion to International market WO Strategies:

•National advertising campaigns 

•Franchising or licensing to lower risk

Threats:

•Growth of major competitors 

•Substitute drinks ST Strategies:

•Localization or customization

•Deeper differentiated roasting technique

•special atmosphere WT Strategies:

•Core business to make it more competitive

•Expanding the business model

Most of the existing strategies of Starbucks in the 1990s fitted with the SWOT synthesis table according to the case ‘Trouble Brews at Starbucks’. For example, in terms of different distribution channels, Starbucks took the grocery market into consideration and succeed in testing market in Portland area. Starbucks also began to do some national advertising. In addition, to maintain the service and atmosphere competitive, Starbucks tailored special logo and vision to provide coffee bars with Italian culture, romance and mystery. Starbucks also expanded their business model which was a stronger connection with customers as the Third Place. Seasonal offering, such as cream Frappuccino in the summer and gingerbread latte at Christmas in certain stores, were introduced as production localization and diversification. Starbucks lowered the financial risk through licensing with airport retail and partner with Safeway, and Barnes & Noble. It gave Starbucks a way of entering new markets without affording to build company- own stores.#p#分頁標題#e#

 

To some extent, partnering with McDonald was not contribution to the image of Starbucks brand. Mc Donald is a fast food restaurant where the environment is noisy. Thus it is paradox of the Starbucks’ marketing culture. It may cause the brand dilution for Starbucks and it is actually a negative way of promotion of Starbucks.cks coffee in restaurant and airplane, it made the image of Starbucks products boundary indistinct.