Starbucks's Schultz on Growth Strategy, Asian Markets

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Customer | Buying power of consumers is affected by the financial crisis. (3)| Higher unemployment resulting in less money to spend is one of the highest risks to the sector. (4)| Customers will set new priorities on value. Convenience became the new differentiator within the industry and price/quality importance is winning grounds as well. It means a shift from ‘price war’ to ‘value war’. (5)| Customers in the F&B industry are not as much affected as in other sectors. They will still have a primary need for food. (2)| | | Supplier | Higher cost of debt capital due to limitations on traditional equity markets. (4)| A higher food price index and uncertainty on agricultural development will force suppliers to think of ways to innovative and use technology to boost sustainable food production. (3)| Need for more variety in product offerings leads to more complexity, in which it becomes more important to eliminate the non-performing supplies. (2)| Stripping out non-performing SKUs and figuring out how to offer choice without creating unmanageable complexity have become key capabilities for leading F&B companies.(4)| Suppliers have to innovate their offer along with F&B facilities. Slow response could be fatal. (3)| Reduced entrepreneurial spirit due to lack of attractiveness for starting specialty and smaller supply firms with current economic outlook. (3)| Competitors| Rising food prices could make price competitiveness less important, because an environment of rising prices could dull consumer sensitivity. (3) | More F&B companies are expected to be involved in mergers and acquisitions in the next two years. (2)| Competition on brand management becomes more important within a financial crisis and first mover advantages can be gained (4) | More F&B companies will see the need of consolidation through centralization of staff and middle management which leads to competitive disadvantage. (3)| Structural unemployment could lead...
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