Strama
I. Background of the Problem
Starbucks Corporation is an American global coffee company and coffeehouse chain based in Seattle, Washington. Operating with 20,366 stores in 61 countries, Starbucks serves hot and cold beverages, whole-bean coffee, micro ground instant coffee, full-leaf teas, pastries, and snacks. The company leads the industry offering comfort to complement products and has proved to be effective as more and more customers choose the company inculcating loyalty.
The 2008 recession struck Starbucks off guard as customers veer from their company to options far cheaper for coffee. This response led to a decrease in net income while service costs remain constant leading to closed underperforming stores to cut costs.
II. Statement of the Problem
* Starbucks continuously experiences a decline in net operating income.
III. Objective
* To increase net operating income to 8% by the fiscal year 2010.
IV. Industry Analysis
A. Macro-environment Analysis
1. Demographic
* Those who finished college bought 49% more gourmet coffee on average and those with some postgraduate education bought 71% more.
* Households with children and two working parents bought 28% more gourmet coffee.
* 16% of the U.S. adult population consumed specialty coffee on a daily basis whereas 63% indulged occasionally.
* Iced coffee has become a very popular drink in the United States, especially among women and teenage girls.
2. Social
* Lack of customer acceptance of new products or price increases necessary to cover costs of new products and/or higher input costs.
* The consuming public is concerned about the nutritional value of products offered by the specialty coffee sector and they challenged the correctness of labelling and calorie information posted on the products.
3. Economic
* Unfavourable general economic conditions in the market in which Starbucks operates that adversely affect consumer spending.
* Favourable foreign
Starbucks Corporation is an American global coffee company and coffeehouse chain based in Seattle, Washington. Operating with 20,366 stores in 61 countries, Starbucks serves hot and cold beverages, whole-bean coffee, micro ground instant coffee, full-leaf teas, pastries, and snacks. The company leads the industry offering comfort to complement products and has proved to be effective as more and more customers choose the company inculcating loyalty.
The 2008 recession struck Starbucks off guard as customers veer from their company to options far cheaper for coffee. This response led to a decrease in net income while service costs remain constant leading to closed underperforming stores to cut costs.
II. Statement of the Problem
* Starbucks continuously experiences a decline in net operating income.
III. Objective
* To increase net operating income to 8% by the fiscal year 2010.
IV. Industry Analysis
A. Macro-environment Analysis
1. Demographic
* Those who finished college bought 49% more gourmet coffee on average and those with some postgraduate education bought 71% more.
* Households with children and two working parents bought 28% more gourmet coffee.
* 16% of the U.S. adult population consumed specialty coffee on a daily basis whereas 63% indulged occasionally.
* Iced coffee has become a very popular drink in the United States, especially among women and teenage girls.
2. Social
* Lack of customer acceptance of new products or price increases necessary to cover costs of new products and/or higher input costs.
* The consuming public is concerned about the nutritional value of products offered by the specialty coffee sector and they challenged the correctness of labelling and calorie information posted on the products.
3. Economic
* Unfavourable general economic conditions in the market in which Starbucks operates that adversely affect consumer spending.
* Favourable foreign