busn 412 week 6 assignment

* The company cash flow is unreliable especially in the early stages of a new product development

The “Coffee Wars – The Big Three: Starbucks, McDonald’s and Dunkin’ Donuts” article focuses on the company analysis of the Starbucks brand and how its main competitors, McDonald’s and Dunkin Donuts, has affected their brand and driven competition higher. Even though there are many companies trying to enter the specialty coffee market, these three companies own the majority of the market share. With Starbucks’ top quality and above average prices they hold a different market than the fast coffee/food market of Dunkin’ Donuts and Starbucks; yet the competitive moves Dunkin’ Donuts has made over the years in order to compete with Starbucks and surpass McDonald’s has driven competition up between all three companies. The competition has stiffened ever more in the past ten years due to the changing economy. This led to “the big three” to come up with different techniques to gain competitive advantage over the other. Although the competition between these companies is to gain most of the market share, consumers are still loyal to a certain brand; this makes it difficult to gain each other’s clientele. McDonald’s continues to appeal to customers who want value and speed, Dunkin’ Donuts focuses on the middle-class, while Starbucks a customer who desires a higher quality product along with being recognized for using the brand.

* It is a global coffee brand built upon a reputation for fine products and services. It has almost 16,000 cafes in almost 40 countries.

Becoming the division that will create its own surplus in budget separate from Samsungs overall budget

G.G. Dess, G.T. Lumpkin, M.L. Taylor, A.A. Thompson, and A.J. Strickland III, Strategic Management (Boston, McGraw Hill, 2004) pp. 141-148.

Pearce, J. A., II, Robinson, R. B. (2011). Strategic management: Formulation, implementation, and control (12th ed.). Boston, MA: McGraw-Hill/Irwin

This document and all of the materials contained within are strictly for study assignment purposes to fulfill MBA course BUSN 620 Strategic Management on August 01, 2011-September 25, 2011 requirements.

As Starbucks' strategic vision evolved over the years, so did its strategy. Starbucks current strategy in comparison to its original competitive strategy are: to continue the focus on growth; to establish a leadership with company owned stores in key markets such as USA, Japan, Australia, and UK; to pre-emptively enter and aggressively grow in all targeted markets; to leverage the brand into new product categories and channels; to continue operations improvement; to growth through innovation; to develop and maintain leadership talent; and to maintain their values, culture, and guiding principles. The key elements of Starbucks current strategy is to expand Starbucks globally, and to further develop its internet business. The strategy has changed over time as the business has grown exceptionally well in North America, and now they want to take that success over sea.

They have focused on building brand recognition and profitability by growing the business gaining assets to grow the company and products for greater customer satisfaction (About GMCR, 2004-2009). GMCR’s strategy to incorporate current large brands, such as Tully’s, Diedrich, and Keurig has helped to expand their customer base and satisfaction as well as the markets for their products (Phillips, 2011). Their focus on increasing their market shares in other companies will facilitate their expansion into new geographical markets and promote the brand. GMCR’s partnership with Keurig creates a larger consumer choice and the addition of agreements to create portion packs for the Keurig with companies such as Starbucks, Dunkin Donuts, and Newman’s Own helps set them apart from the competition (Invest in the Markets, 2011).

Hitt, M., Ireland, R., Hoskisson, R. (2013) Strategic Management: Competitiveness & Globalisation, 10th edition, Cengage Learning

Hence, even without the two cup system that would have introduced a physical fence, the “products” offered to the two markets are not equivalent. Therefore, we do not believe that the new Keurig-Cup is a necessary fence to price discriminate between commercial and residential markets.

McDonald’s, in addition to several other fast food vendors like Burger King, Dunkin’ Donuts, Panera Bread and independent coffee houses remain Starbuck’s toughest competition (Adamy). McDonald’s began introducing its espresso beverage products in 2001, and offers its product at a price between two and three dollars to compete with Starbucks between three and four dollars a cup coffee (Adamy). Similarly, Dunkin’ Donuts has recently implemented a plan to expand nationally (Adamy). On average, Dunkin’ Donuts coffee products cost approximately 20 percent less than Starbucks’ (Ball and Leung). In response, Starbucks has announced recent

rable general economic conditions in the markets in which they operate that adversely affect consumer spending;

With this being said they must find ways successfully spread out some the overheads costs that are in dire need of attention or raise more money. The VC’s are saying that they will not receive any more money until they have proven track of strong sales. A successful negotiation would help alleviate their economics burdens they are currently incurring this is why it is important so they do not end up in the worst situation where they cannot get money from the VC’s, angels investors or investments banks and have to go out of business. Keruig has 2 BATNA’s the first is they can each other try to find other roasters to contract with like Starbucks, Swiss Miss, Folgers or more regional companies like Van Houtte of Canada and Diedrich of South California. Their second BATNA was to revert back to the old plan and produce their own branded line True North Coffee. Under this plan they would have to raise a lot more capital from angels and private investors. This approach would come with a lot of obstacles such as higher costs, possibility of a lower valuation

A. The company has the opportunity to expand its global operations. Some new markets for coffee such as India and the Pacific Rim nations are beginning to emerge.