Coffee and Starbucks

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Table of contents

Abstract…………………………………………………………………….2 Introduction…………………………………………………………...........3 Main discussion
Part (1) Starbucks product’s competitive priorities…………………………3 Part (2) Starbucks critical analysis, services and manufacturing strategies...5 Part (3) Product life cycle………………………………………………….10 Part (4) the flow diagram processes ……………………………………….13 Part (5) Tools and standards applied to keep tracking in the industry…..…15 Recommendations………………………………………………………….17 References……………………………………………………………….…19

Abstract
Starbucks opened its first location in Seattle's Pike Place Market in 1971. Now Chairman Howard Schultz joined Starbucks in 1982 as Director of Marketing. Schultz visited Italy and noticed the popularity of espresso bars there. He thought this would be a great idea in the Seattle area and convinced Starbucks to open a coffee shop in downtown. Schultz founded his own coffee company and acquired Starbucks' name and assets from its founders in 1987. The company had just 17 stores but would soon grow quickly and went public in 1992. Starbucks' popularity soared as it opened coffee shops within Barnes and Noble bookstores. It also provided coffee for United Airlines and shops in Starwood hotels. The company's focus on quality and commitment to social causes and the community have made it one of the world's most admired businesses. Starbucks made the cutting-edge step of having its second Corporate Social Responsibility Annual Report verified by an outside auditor, so readers can be assured the facts and figures it presents are accurate. One of the revealing statistics in the report is that Starbucks purchased 74 percent of its green coffee at outright negotiated prices, independent of depressed commodity prices in 2002, up from just 12 percent in 2001. Starbucks also paid an average of $1.20 per pound at a time when coffee was trading on the commodity market for $.40 to $.50 per pound. The end result: higher income for farmers, which translates to a better quality of life for farmers.

Introduction:

Starbucks began 36 years ago as a single store in Seattle's Pike's Place Market, and today is the world's leading retailer, roaster and brand of specialty coffee. The company has experienced extraordinary growth: its number of stores has more than doubled in the past ten years, with close to 6,000 coffeehouses in over 27 international markets. More than 19 million customers visit a Starbucks coffeehouse each week.

When Starbucks considered its ambitious expansion plans for Europe, the Middle East and Africa, executives knew that the location they chose for their new roasting plant and support centre would be critical to their success. In fact, the decision was so important that the company spent close to three years looking at various sites across Europe and the International market.

Main discussion:

1.Starbucks product’s competitive priorities

As we know the competitive priorities is operating advantages that a firm’s processes must possess to outperform its competitors. In this part, we are going to define each possible competitive priorities of Starbucks for operation process as cost, quality, time and flexibility

Cost: Market indicators show a potential trouble for the entire coffee industry as a whole, namely the rising cost of coffee beans and farmer’s tendency to switch to other profitable crops. First, rising cost means lower profit margins. Second, the fact that farmers are switching to more lucrative crops such as vegetables, fruits, and even illegal crops foreshadows the scarce supply of coffee beans. Hopefully Starbucks’ competitive prices for its coffee subcontractors are lucrative enough to retain and deter its suppliers away from abandoning the coffee production. Economic trends should not influence Starbucks pricing strategy greatly, because gourmet coffee, or any other coffee, is measured on quality and availability, and not so much on price. Furthermore, in times of...
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