Starbucks Final Presentation

Starbucks Final Presentation - JaSam Consulting 11/17/08...

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Mike Amalfe, Alex Groneman, Josh Kahn, Shannon Kehl JaSam Consulting 11/17/08
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Firm description Chief rivals: Dunkin Donuts, local coffee shops, Caribou Coffee, etc. Rapid expansion in 1990’s Customer traffic declined for first time since company went public in 2006 Industry $20 billion specialty beverage industry is bad industry Below economic average ROA of -2.3% High rivalry and threat of substitutes Starbucks drastically outperforms the industry average (ROA= 8.5%) Firm Level Analysis Narrow and differentiated positioning Competitive advantage is unique atmosphere/customer experience Background Firm Scope Inter-Organizational Social Responsibility Strategic Issues
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Horizontal Diversification Starbucks ice cream, Starbucks CDs Resource-Based View Logic Increased customer WTP through cross-selling Greater market power because of economies of scope Some cost savings because of shared facilities and distribution channels Background Firm Scope Inter-Organizational Social Responsibility Strategic Issues Advantages Certain products have helped add to unique atmosphere i.e., music offerings Disadvantages Lost focus on core competency
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Minimally vertically integrated Contracts with small coffee producers Contracts with distribution channels Recent acquisition of Seattle-based coffee equipment maker Advantages Ability to switch suppliers Incentive of suppliers to perform well since there is considerable competition Quick technological improvement Costs Higher costs to outsource distribution channels than if internal Transaction acquisition costs Background Firm Scope Inter-Organizational Social Responsibility Strategic Issues
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Advantages Increased revenue due to higher sales Synergies because of shared costs Disadvantages Loss of brand value Greater chance of market saturation
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This document was uploaded on 11/04/2011 for the course BUSI 471 at UNC.

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Starbucks Final Presentation - JaSam Consulting 11/17/08...

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