University of Phoenix
Week 4- LT Project Plan
The goal for Team A in week two was the continuation of the team project proposal. This next phase in the evaluation includes an outline of the project scope, project risk management plans, and contingency plans. Also included in this project plan is the project budget and strategies to execute this plan. The learning team will not only highlight these areas but include specific details around these outlined topics. Project Scope
Company Mission, Values, and Objectives
Starbucks mission is a visionary statement that outlines the company’s objectives as follows: “to inspire and nurture the human spirit – one person, one cup and one neighborhood at a time” (Starbucks, 2013). The company’s values include quality, passion, fully engaging customers, humanity and enjoyment of life, setting the standard for being good neighbors, and accountability (Starbucks, 2013). Starbucks currently sets the standard in one market sector: whole bean coffee distribution within the United States. However, as Team A consultants identified, the company jeopardizes its frontrunner industry position by not expanding. Team A consultants discussed two primary expansion opportunities, specifically expansion of the company’s product portfolio and expansion of the company’s primary product, coffee, into foreign markets. Although both expansion options provide great competitive advantage for Starbucks, expansion into strategic foreign markets provides the most opportunity for competitive advantage and is most aligned with the company’s values as it enables the company to set standards in new industry sectors and broaden the neighborhoods in which it serves. Strategic Positioning
Starbucks is classified within six industries, specifically snack and nonalcoholic beverage bars, tea and coffee, eating places, grocery stores, miscellaneous food stores, and beverage serving activities. Of these markets, coffee distribution primarily falls within three markets: snack and nonalcoholic beverage bars, tea and coffee industry, and eating places (Morning Star, 2013). Currently, Starbucks limits its distribution potential by conducting 75% of its coffee distribution and sales within the United States (Marketing Teacher, 2013). Although the increased distribution saturates American coffee markets, narrow distribution hinders long-term competitive advantage. By increasing the company’s distribution within foreign markets, Starbucks achieves a larger neighborhood to serve, strategically aligning itself with its mission, vision, and values. Starbucks currently operates within two countries in Europe: Hungry and Germany; however many of its products capture the essence of France and Italy among other European countries. As the company continues to gain momentum from its single-cup technology and branding, expansion of the company’s coffee products into Italian and English markets maximizes its potential for competitive advantage (Morning Star, 2013).
Michael Porter introduced an industry-based model using five forces of Industry rivalry, Potential for new entrance, Substitute products, bargaining power of suppliers and bargaining power of buyers (Porter, 1998) to examine the dynamics within an industry. These forces introduced industry's relative level of competition, how competitors enter the field, the suppliers' and buyers' power within the industry and the extent of substitute products or services influence the industry. Porter's strategic models provide decision makers a visual frame of reference of threats and opportunities facing the business (Porter, 1998).
Porter's five variables responsible for the five forces analyze using the model through Starbuck's buyers, industry suppliers, potential new entrants, competitive among existing firms, and substitute products. These forces focus on the...