Starbucks Case Study : Starbucks Case

The coffee served in Second Cup is also high quality and the drinks available strongly rival those in Starbucks. In the past decade there has been an explosive growth of 157% in the area of coffee shop market. Canadian coffee market share, new companies have limited to no space for growth in North America. Second Cup’s market share at the Canadian market is about 8%.Upon these facts and analysis there is an unlimited growth possibilities in the coffee market in Canada. There are different factors that do influence in the purchase of coffee from these outlets and the the way these coffees are priced. Customers are reluctant to get coffee from these outlets as the prices are too high than the coffees that could be made at home. There is a huge conflict between the pricing of coffees at these places and homemade ones. Coffee shops are determined to serve the best quality coffees which are been imported from South America and Africa, due to the rise in oil prices transportation charges have also been increased. And also due to different global climatic conditions the prices of these gourmet coffee beans have been increased.

Coffee consumption is expected to increase through 2015 at an average annual rate of 2.7%, while tea consumption is expected to increase through 2015 at an average annual rate of 3.1%. Positive expectations for continued growth in coffee sales, despite its “mature” product position in the market, are due to the innovations in premium coffee products (pods, single-serving instants, etc.)

Today, coffee has become the most popular beverage consumed in North America. Many coffee shops have been built, such as Starbucks, Panthers coffee, which are inflating the economy. Coffee is so much

Bargaining power of buyers is comparatively low for high demand and low supply of this variety. In Japan, USA, European Union- these markets show strong rise in demand for gourmet coffee industry.

1- I think the most important management skills for Schultz to have are the conceptual skills. Since Schultz is the chairman of Starbucks, which means he is the top manager of the company, the conceptual skills are the most important for him to have. Mostly because conceptual skills help him see the organization as a whole. It helps the manager understand the relationship among the various subunits, and visualize how the organization fits into its broader environment. In fact the conceptual skills are defined as the ability to think and to conceptualize about abstract and complex situations. But as we can see in the case Schultz proved he had good conceptual skills when he decided to open his own espresso chain after

1. Identify the controllable and uncontrollable elements that Starbucks has encountered in entering global markets.

In general the coffeehouse industry in the United States was experiencing an increase in coffee consumption per capita due to the “Starbucks effect”. At this time Starbucks was operating approximately 20,000 stores in the United States and was living a fast expansion strategy worldwide.

Coffee consumption in the US and Europe equals approximately one-third of the tap water consumed annually, with annual production of approximately seven million tons estimated in 2010 (http://www.coffeefacts.com). Worldwide, nearly 25 million small producers derive their income from coffee; the economies of Africa, Indonesia, and South and Central America are especially dependent on coffee production. The majority of this production takes place in Brazil, where approximately five million people are involved in the cultivation and harvest of over 5 billion coffee plants without the aid of modern machinery. (Rice, 2003, p. 228).

Coffee is considered as being the most favorite hot beverage that is consumed within the United States. Coffee is consumed by over 60% of the U.S. population. The accessibility and expenses of coffee substitutes such as tea, cocoa, and coffee complements (sugar or creamer) in addition plays a major role in which sets the coffee prices. During the 1957-87 era, the cost of coffee had beyond tripled, the per capita of US consumption of coffee declined to 44.3%, and actual disposable personal earning expanded to 246%. With the reduction of per capita US coffee demand could have possibly been associated with the increasing expenses of coffee, modifications within the taste changes that were made due to dietary concerns and the variety of transformations

Along with the second biggest part of the equation are the consumers of the products, not only the countries that import the goods. In the last six months, the European Union fluctuated, but did not falter being the leading importer of coffee with 9,994 units in july 2017, 10,439 units in September 2017, and 9,509 units in December of 2017. The United States imported 2,453 units in July 2017, 2,255 units in September 2017, and 2,328 units in December 2017. Japan imported 580 units in July 2017, 607 units in September 2017, and 460 units in December 2017. The Russian Federation imported 476 units in July 2017, 446 units in September 2017, and 467 units in December 2017. All units in thousand 60 kilogram bags (“Trade Statistics Table”). Within the European Union is the biggest coffee market as well as the oldest coffee market, which are the United Kingdom and the Netherlands. Both countries’ fair trade sales increased by 24% in 2011 and continue to increase as more producers become Fair Trade certified (Ladhari,2015). The United States fair trade sales increased by 12% in that same year. While these statistics were acquired, it was also noted about the consumer’s purchasing trends compared to their personal values. According to Pelsmaker, consumers’ ideal purchasing trends are not completely reflective of their actual buying behavior (Pelsmacker, 2005). Therefore, the

There is an excessive demand and cost for gasoline nowadays, coffee is believed to be the following utmost exchanged product in the global market place succeeding to oil. Coffee is developed way more than fifty nations in a stretch everywhere around the equator and offers an income for more than twenty million growers. Overall, estimation is about one hundred million societies universally that are included in the spreading, releasing, interchanging and selling of the production. During 2001, coffee growers and farms created around fifteen billion pounds of coffee whereas the global market place merely acquired thirteen billion pounds. The overstock in the coffee business is not a typical mechanism and is one of the

No matter where we go, there seems to be a coffee shop around the corner or a shop/diner that provides the option of coffee or tea to their customers. Lets take starbucks as an example, they have many options as from tea to warm coffee drinks or even a nice cold coffee frappuccino. Coffee and tea is a demanded product in the market industry. From coffee or tea product in the market store or businesses buying the product to make coffee for customers, people are willing to buy the beverage to drink mainly to keep them awake. Some people need it as a daily thing.

Statistics show that over half of the American population consumes coffee on a daily basis. You may drink coffee hot, cold, mixed, or even in a frappuccino. Individuals are able to make coffee at home, or buy it on the go. Coffee provides people with caffeine, which ultimately gives energy for hardworking people all around the world. The main focus for this paper will cover the following topics, with coffee as the basis: causes for shifts in supply and demand, how coffee supply and demand influence price, quantity,

Starbucks is undoubtedly dominating the coffee industry, however that does not exclude the entry of new rivals. For example, McDonald’s, Burger

India, like many other Asian countries, has a tea drinking culture, but the coffee market is catching up and growing fast. This case talked about the stories of Café Coffee Day (CCD), the Indian coffee industry market leader, along with its competitor Starbucks from USA. CCD was founded in 1996 and by April 2013 it had around 3,000 stores within the Indian market. CCD had not faced any severe threat up till 2012 when Starbucks made its entry into the Indian market through a joint venture with Tata. As the world’s largest coffee chain company, Starbucks wanted to get a slice of the cake. In 2013, it opened 11 stores in Delhi and Mumbai.