báo cáo học thuật bài tập nhóm starbucks

The company has a strong brand, products and services around coffee, handcrafted beverages, freshfood, non-food items, packaged goods, mugs and accessories, and gifts.There are several s

Group V

Semester: SUMMER - Class: MKT1805 - Year 2023

Members of group

STARBUCKS

ACADEMIC REPORT GROUP ASSIGNMENT – MGT 103

BÁO CÁO HỌC THUẬT BÀI TẬP NHÓM – MÔN MGT 103

Table of Contents

I EXECUTIVE SUMMARY: 3

II INTRODUCTION 3

A Company’s Introduction 3

B SWOT Analysis 3,4

III MARKET ANALYSIS: 4

1 Industry Overview4

2 PESTLE Analysis 5

3 Competitor Analysis 5,6,7

IV ANALYSIS OF INVESTMENT DECISIONS 7

A Alternative supply from local supply source : 7,8

B Developing new products and menu adjustment 8

C Invest in facility 9

IV CONCLUSION 10

VI APPENDIX 10

I EXECUTIVE SUMMARY:

Starbucks Corporation is a global leader in the coffeehouse and roastery industry with a mission to "inspire and nurture the human spirit" The company has a strong brand, products and services around coffee, handcrafted beverages, fresh food, non-food items, packaged goods, mugs and accessories, and gifts

There are several strengths, weaknesses, opportunities, and threats (SWOT) that impact its business, including high prices, intense competition, and limited international expansion Starbucks also faces stiff competition from other major players in the Vietnamese coffee market, such as Dunkin and McCafé, as well as from local businesses To improve its business in the Vietnamese market, we have identified three potential investment types, including sourcing alternative supply from local suppliers, developing new products and menu adjustments, and investing in facilities By taking advantage of these opportunities and addressing its weaknesses, Starbucks can create a more engaging and rewarding experience for its customers and drive value for the company

II INTRODUCTION

A Company’s Introduction

The Starbucks Corporation is a global leader in the coffeehouse and roastery industry with over 402,000 employees worldwide Founded in 1971, Starbucks has built a strong brand, products and services around coffee, handcrafted beverages, fresh food, non-food items, packaged goods, mugs and accessories, and gifts With a mission to "inspire and nurture the human spirit", Starbucks has

a vision to "establish Starbucks as the premier purveyor of the finest coffee in the world" and upholds five core values to ensure their customers feel welcome and appreciated

B SWOT Analysis

STRENGTHS:

The Starbucks Corporation is one of the world’s leading coffee companies, with a global presence, a renowned brand, strong customer loyalty, a commitment to sustainability, an innovative business model, efficiency, strategic planning and reinvestment strategies, a strong digital presence, and

strong financial performance These strengths have helped Starbucks achieve success and become one of the world’s leading coffee companies

WEAKNESSES:

The weaknesses of Starbucks, a major player in the coffee industry These weaknesses include high prices compared to some competitors, intense competition, imitability of products, generalized standards for most products, major dependence on a single product line, limited international expansion in some markets, potential negative impact of commodity price fluctuations, dependence on a large number of company-operated stores, and limited menu options for customers with dietary restrictions or preferences The report provides insight into how these weaknesses could potentially impact the company's performance and provides recommendations on how to address them

OPPORTUNITIES:

In summary, Starbucks has a number of opportunities to explore in order to continue to grow and diversify its business These include expanding into new markets, forming partnerships and collaborations with other companies or brands, adopting price differentiation, diversifying its product offerings, introducing a coffee subscription service, expanding its loyalty program, acquiring complementary businesses or brands, and exploring new coffee trends and technologies By taking advantage of these opportunities, Starbucks can create a more engaging and rewarding experience for its customers and drive value for the company

THREAT:

The five key threats that Starbucks faces, including competition from other coffee chains and independent coffee shops, changes in consumer preferences

or trends, economic downturns or market instability, supply chain disruptions or sourcing challenges, and labor disputes or employee turnover These threats can have a significant impact on the company’s market share, profitability, customer traffic, and more, and as such, Starbucks must be prepared to respond to these threats in order to remain competitive and successful in the future

III MARKET ANALYSIS

1 Industry Overview

Vietnamese coffee is well-known around the world The volume and value of exports are rapidly increasing Vietnam's coffee bean planting area is constantly expanding As a result, the volume of output increases, promoting coffee bean processing, sales, and export In Vietnam, coffee has developed into a whole industry chain that is an essential part of the Vietnamese economy offering millions of job opportunities

"In the 2021-2022 crop year, Vietnam mainly exported Robusta coffee with 1.5 million tons, worth $2.97 billion; while Arabica coffee was only exported with 60,000 tons, worth $260 million; and decaffeinated coffee with 26,000 tons,

worth $76.9 million." (Mr Nguyen Nam Hai, Chairman of the Vietnam Coffee-Cocoa

2 PESTLE Analysis:

Political Factor:

Globalisation changes have forced businesses to adapt, and Starbucks has been successful in expanding globally by considering each country's political context and conducting thorough research

Economic Factor:

Starbucks is sensitive to economic factors, and an increase in interest rates can directly impact the company's sales and its suppliers' investment plans, potentially leading to a decline in sales and hindering expansion

Social Factor:

To increase customer engagement and frequency of visits, Starbucks should implement policies or strategies that enable them to identify potential local customers and encourage them to visit their stores more often

Technological Factor:

In today's world, technology is ubiquitous, and companies are striving to incorporate it into their operations wherever possible Starbucks has leveraged the advantages of technology by launching its website in 1998, utilizing the latest coffee machines in its stores, and providing internet access in some of its locations

Legal Factors:

Because Starbucks operates in various countries, it is important for the company

to have an understanding of the different laws and regulations related to product restrictions, trade, health, employment, safety, and religion Starbucks must ensure that it adheres to all relevant laws, rules, and regulations in every country

in which it conducts business

Environmental Factors:

Starbucks must be environmentally conscious by adopting eco-friendly techniques and using recyclable materials It values its employees as business partners and attributes its success to its marketing strategies that prioritize customer satisfaction

3 Competitive Analysis:

3.1 Competitors In the Market

Starbucks faces competition from major players such as Dunkin, McCafé, Tim Hortons, and Caffè Nero, as well as smaller, locally-owned businesses like Peet’s Coffee When expanding into Vietnam, Starbucks struggled to compete with small and brand-less businesses due to their failure in menu engineering They

faced challenges in competing with the traditional coffee flavor, which is strong and rich, while their focus is on drinks like flat whites and lattes

Starbucks Main Competitors

in Vietnam (Direct Competitors) Starbucks Indirect Competitors in Vietnam Trung Nguyen Legend

The Coffee House

Phuc Long

Highlands Coffee

• Costa Coffee

• Dunkin' Donuts

• McDonald's McCafe

• Cafe Coffee Day

3.2 Porter’s Five Force Model:.

New entrant’s threats:

Starbucks faces stiff competition in its operating environment from other established brands such as Trung Nguyen Legend, The Coffee House, Highlands Coffee Compared to other businesses, Starbucks has a lower entry barrier to the coffee market as it requires less capital investment to rent or purchase a store In addition to its physical stores, Starbucks also reaches its potential customers through various distribution channels such as supermarkets, grocery stores, mail delivery, and online platforms The market also has many new entrants who operate in a single store

Customer’s bargaining power:

The profitability of Starbucks is linked to the number of customers it has In the past, customers had little bargaining power due to the lack of competition, but now there are many brands and new companies in the market, which has changed the situation In addition, the coffee market used to be dominated by Starbucks, so customers had less bargaining power However, as the number of coffee suppliers has increased, customers have more power to choose among companies offering lower prices Therefore, Starbucks needs to maintain its uniqueness to reduce the bargaining power of customers

Supplier’s bargaining power:

Suppliers of raw materials like coffee beans and advanced machines used in Starbucks stores have a higher bargaining power, which the company manages

by negotiating prices, due to the crucial nature of these items to its operations and limited suppliers in the industry Howerver, suppliers of items such as napkins and coffee cups have lower bargaining power, and Starbucks' contractual agreements with most of its suppliers further reduces their bargaining power

Threat created by substitutes:

Starbucks faces a threat from other non-coffee products such as energy drinks, beer, smoothies, soft drinks, fruit juices, etc., which can potentially replace coffee Additionally, there are numerous pubs, lounges, and bars in the market that offer a similar environment as Starbucks, making it a challenge for the company

to compete effectively with these alternatives

Competitive rivalry in industry:

Starbucks is globally renowned as a brand name, but it faces tough competition from other well-known brands that are actually dominating Vietnam’s coffee market such as Trung Nguyen Legend, The Coffee House, Highlands Coffee Additionally, there are other major players in the coffee market such as McCafe, Burger King and Dunkin' Donuts that intend to extend their market to Vietnam These competitors offer similar products, intensifying the competition between them and Starbucks

IV ANALYSIS OF INVESTMENT DECISIONS

1 Alternative supply from local supply source

- Reason:

Coffee beans that are being used at the moment had been proved as no longer suitable for demand in Viet Nam, some South East Asia countries Looking for local sources of Robusta beans in order to compete with local coffee chains such

as Trung Nguyen, The Coffee House,… which provide cafe made from Robusta beans planted in local highland ( Đăklăk, Lâm Đồng, Gia Lai,…) Another reason

is that in Europe, world largest coffee market, Robusta and roasted coffee beans are now having a important position in consumer demand Therefore, selling alternative coffee beans, Robusta, will create opportunity to increase sales, market share, …

- Advantages:

In world market, Robusta beans usually have price equal half of Arabica beans

It could be an huge cutdown in cost by choosing an alternative supply from Robusta’s farms

Another benefit, Robusta have already prove it potential position in market demand not only in Asia but also Europe By acquire new supply from directed local source such as Viet Nam (world second largest coffee export country) Starbuck will have an undeniable advantage upon other competitors in Europe, when there are few access of coffee chains come from Robusta beans planting country

- Disadvantages:

It can be hard to compete with the quality of coffee bean, because local chains store such as Trung Nguyen, origin was a brand come from the city of Coffee (Buon Ma Thuot), have dominated a huge quantity of top quality Robusta coffee bean sources

Lacking of experience and knowledge about Robusta, Starbuck would suffer from difficulties in exploit and delivery the best product make from Robusta’s bean

to customer, which have been a familiar product to Asian people Therefore, local

consumer and those who have try lot of coffee origin was Robusta coffee would immediately recognise the difference

- Evaluate:

Due to the trend of more caffeine inside coffee, Robusta can be a potential alternative of Arabica This might lead to sales improvement in countries with the hobby of drinking coffee from Robusta’s bean Furthermore, the price of Robusta

is just as half of Arabica which is likely to cut down cost for material but still develop the quality of products It might violate the pride of Starbuck's original coffee bean, Arabica, but the combination of both would increase the market share of Starbuck by widening the target customers

2 Developing new products and menu adjustment

- Reason:

In America, Starbuck seem to be a middle-class coffee chains, with target customer is middle and upper-middle classes as well as educated But in Viet Nam, and some South East countries, Starbuck have brand recognition as a luxury coffee brand due to it high price in compare to local coffee Furthermore, I

ts product still stick to the original menu in US which might be not appropriate for different cuisine and local trends Therefore, a replacement of some existing product come from America but not suitable with local demand by on trend product, seasonal specialties and price adjustment would increase revenue and acquire customer loyalty

- Advantages:

Due to it global chains, Starbuck already have a huge customer testing market When a new product come up, Starbuck can test the attribute of their products in similar market before write it on the menu

Starbuck have an massive profit from the North US market, which can be use to testing and generating new product ideas with minimum of risk if the product fail

to reach the customer

They can sell their new product at an profitable price at the beginning, because

of the brand awareness as a luxury brand in some South East Asian countries So they would not need to sacrifice new product profit at first

- Disadvantages:

The new product would face extreme judgment because it come from a brand that was consider to be luxury Therefore, if the product is not perfectly prepare,

do not catching the trend and not satisfy customer want, new products will fail in attempt to encounter customer

- Evaluate:

This is an promised improvement in attempt to increase customer hospitality, revenue of the stores Starbuck have strong resources to start research and develop new product Moreover, it business ecosystem provide best environment

for testing and preparing for the establishment of new product But coming with good condition for develop new product is the challenge and high expectation of customer for the perfect product can provide satisfaction

3 Invest in facility

- Reason:

At the moment, many coffee store have their facility structure follow creative topics Which can accidentally gain customer interest and make them paid more

As a luxury brand awareness, as mention before in this report, consumer put high expectation when they pay their money and when their expectation are meet, their willingness to return will increase

- Advantages:

Starbuck have huge allowance due to successful economic activity back in North America, leading to more easily for them to start constructing their stores following the trends

They have many store in all the world from many culture Therefore, the idea and the inspiration come from them is a lot They can mix and apply decorated topic from one nation to other regions

- Disadvantages:

Starbuck is a chains coffee Therefore applying reconstructed must be apply for all stores and each store in order to be creative must have different decoration style but following the core value that the decors want to embrace This will required a lot of time to maintain the idea, screening its, and starting to construct,…

When it start to construct, a store must stop its operation in order to protect the customer and employees This will lead to lost of revenue in an specific time

- Evaluate:

In monopolistic competition market, this is a way to charge higher price and increase revenue of business In consider of Starbuck, their strength is that they have store all over the world Therefore, the multi culture variation in decors, structure will give them plenty of ideas But doing this investment, is also agree

to stop the operate a store in order to start construct for a while This will lead to an decrease in revenue and if the decoration is not accepted by customers, also mean that it will not bring back any value Then, Starbuck will waste their money for nothing This is also a high risk investment

After evaluated all three options, we believe in the recently of situation and lost

of revenue in Asia segment The most possible investment is finding an alternative supply source in local supplier This will as first reduce cost of our company due

to the long-term dept increase and an shortage in overall revenue in compare to other years Secondly, have proven open a new door to our customer segment who are interesting in Robusta coffee bean

V CONCLUSION

Based on the aforementioned data, Starbucks may decide to take a specific approach to increase sales and customer loyalty, such as creating new products

or changing menus Starbucks is able to test new product features in comparable markets before adding them to the menu due to its sizable customer test market In some Southeast Asian countries, the brand is considered a premium brand, so they can offer new products at a discounted price instantly Starbucks should consider investing in facilities to attract more customers But the most effective way for Starbucks to thrive and invest is by using the Alternative Supplies from Local Supply method, specifically by substituting Robusta coffee beans for Arabica beans, Starbucks can reduce investment costs for raw materials while also expanding into the Asian market, where Robusta beans are well-liked, and potentially opening up a significant market in Europe, where this coffee bean is not widely available While this approach can reduce investment costs for raw materials and expand into new markets, Starbucks must also address immediate challenges, including maintaining quality and gaining experience in producing Robusta beans By carefully considering these factors, Starbucks can position itself for long-term success in a highly competitive industry

VI APPENDIX

Figure 1 Starbucks logo