Answer the following 5 questions thoroughly, explain it as brief as possible with the provided information. Should be 1 page single space explain well in details. Do not use outside source but instead use your knowledge and analytical skills.
See attachments for details of the 5 Forces Analysis.
Today, coffee is a giant global industry providing a livelihood for some 100 million people around the world. This commodity ranks second only to petroleum in terms of dollars traded worldwide. Over 100 million bags are produced in 50 countries. From humble origins in Africa, coffee cultivation wandered both east and west, eventually forming a coffee belt roughly bounded by the Tropics of Cancer and Capricorn. Many of these countries are heavily dependent on coffee, which can account for over 80% of their total exports earnings. With over 400 billion cups consumed every year, coffee is the world’s most popular beverage with over US$50 billion in retail sales a year. Sales of premium specialty coffees in the United States have reached the multibillion-dollar level, and are increasingly significantly on an annual basis.
Consumer taste and population growth drive demand in the consumer sector and the economic growth of businesses, like restaurants and hotels, drives demand in the commercial sector. The profitability of individual companies depends on effectively managing raw ingredient costs, efficient operations, and effective marketing. Large companies have scale advantages in purchasing, distribution, manufacturing, and marketing. Small companies can compete effectively by offering specialized products or serving a local market. The industry is capital-intensive: average annual revenue per worker is about $600,000. Coffee and tea manufacturers and retailers face fierce opposition from other beverage companies, especially soft drink, bottled water, and juice manufacturers, especially when medical journals are investigating the health hazards of drinking too much coffee.
Starbucks purchases premium coffee beans from growers around the world and insists on paying the growers a fair price. They emphasize the distinctive taste of their coffee, the distinctive atmosphere of their stores, and the training of their baristas who prepare and serve the coffee. Recently they have faced competition from Dunkin Donuts and McDonald’s but they believe they can retain the loyalty of their customers.
· You are the CEO of Starbucks. Conduct a five forces analysis of the coffee industry from the perspective of Starbucks.
· Are you a differentiator or low cost leader?
· From the case, identify each of the five forces (i.e. Who are the buyers, etc.).
· Are these forces strong or weak in their relation to Starbucks? Why?
· How do you address each of the five forces as CEO of Starbucks?
|Due By (Pacific Time)
||02/27/2016 01:00 pm