The purpose of this report is to analyze two companies in the coffee industry that could be our potential investment. Starbucks and Dunkin’ Donuts are the companies that many foresee as good profitable companies that can give us the necessary return on investments.
Investments must be made after carefully researching each potential investment. Different factors that may lead us to a better deal. One must look at the industry, and the coffee industry is, in fact, the second largest commodity in the world. Meaning it’s a great industry, but it comes with many risks. The companies in this sector to be considered for investment should have a good foothold in the industry, must be profitable, good market position, can compete, and have a good
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Their store in the beginning years only sold coffee to restaurants and bars. The stores that are now known to sell to consumers started in 1987 when Howards Schultz acquired the assets and along with investors set up Starbuck Corporation. He was inspired by cafes in Italy and mimicked them here in the U.S. As time passed, Starbucks expanded more and more, they now have over 24,000 stores in more than 75 countries. They now offer a large range of products that include; coffee beans, specialty beverages, fresh foods, and all types of merchandise (“Starbucks Company,” …show more content…
Different analysts display their opinions on the matter, Starbucks is a company that offers a dividend, and according to strategist R.J. Hottovy, they believe Starbucks can sustain a dividend payout over the next decade. Although they warn of the risk that because there are no switching costs, consumers can trade this brand for another alternative (Hottovy, 2017). Though the expansion plan of Starbuck Corporation is ambitious, because of their goals to open Roastery locations and Reserve stores, by 2021. This may be grand, but it is believed that Starbucks will be able to keep evolving for consumer
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Show MoreStarbucks was created in in 1971 when Jerry Baldwin, Zev Siegel, and Gordon Bowher decided to open the first store in Seattle. The trio opened the first store in Pikes Place, which was a popular market area in Seattle. In the beginning the customers were encouraged to learn how to grind beans and make their own freshly brewed coffee at home. At that time the store did not offer fresh-brewed coffee sold by the cup like today, they sold beans and coffee makers. Starbucks was actually named after the first mate
Starbucks is the world’s largest specialty coffee retailer, Starbucks has more than 16,000 retail outlets in more than 35 countries. Starbucks owns more than 8,500 of its outlets, while licensees and franchisees operate more than 6,500 units worldwide, primarily in shopping centers and airports. The outlets offer coffee drinks and food items such as pastries and confections, as well as roasted beans, coffee accessories, teas and a line of compact discs. The company also owns the Seattle's Best Coffee and Torrefazione Italia coffee brands. In addition, Starbucks markets its coffee through grocery stores and licenses its brand for other food and beverage products. Starbucks Corporation was founded in 1985 and is based in Seattle, Washington. (Bramhall)
Get ready, set, GROW!!! That really seemed to be Starbucks mission in life. From 1998 to 2002 they tripled the number of stores that they either operated or licensed. They wanted to penetrate every possible market and they seem to have been pretty successful at achieving this. Starbucks also had defined what they wanted to be when they grow up, in that they wanted to be the third place in a person’s life after their work and home. Starbucks created a unique gather spot for people and for its start targeted mostly affluent shoppers. Starbucks really felt that they were delivering the values of 1) Providing the highest quality coffee, 2) Creating a welcoming and customer focused experience, 3) Priding themselves in their unique ambient atmosphere. So Starbuck’s was not only trying to sell great coffee they were creating a unique experience in doing so.
For one of my selections for buying stock, I invested into Starbucks, this company has attracted me with their wonders of different coffees, and I knew many others were interested in the very popular coffee company. Starbucks all started 1971 in Seattle Washington. With three men which were Jerry Baldwin, Zev Siegel and Gordon Bowker each of them put in one thousand three hundred and fifty dollars along with a barrowed five thousand from the bank to start up there small coffee shop in pick place market, witch is located in down town Seattle. The name for this company was inspired from the character Starbuck from Moby Dick; this character was a coffee lover. There close friend designed there well known logo. These men never thought of this small company to get large they just thought of it as a small coffee shop. Out of all three men Siegel was the only one that work at it full time. The men depened on a man named Alfred Peet for there coffee beans but soon then started there own blends of coffee beans. With in a year opening the first store they were able to open a second store. When the 1980’s rolled around, it was a thriving company, in the Seattle area. However, the co-founders began to have other interests and were involved in other careers simultaneously. Despite that, the company was about to undergo a major turning point. A man by the name of Howard Schultz started to pursue an interest in the company. He noticed that the coffee shop had a wonderful environment. He started asking a questions and becoming more and more interested by every moment. He loved how the founders had so much knowledge on the coffee and each blend. In 1982, Schultz became director of retail operation. This was just the start to a new phase with the company.
It’s a series of excellent products, positive experiences, consistency, great service, affordable prices, location accessibility and more that help Dunkin’ Donuts provide 40 countries with coffee and its side-kick of donuts (Dunkin' Donuts, 2014). As a low-cost consumer good, coffee providers have some strong competition like Starbucks, McDonald’s and Tim Hortons (Hawley, J., 2015). The coffee industry is so diverse that competition for brand-name coffee is a constant battle. Plus there are various producers and styles of coffee around the world, like Cuban coffee, French press coffee, American specialty coffee drinks and more, not to mention local coffee shop competition as well. Competition is
Starbucks Corporation is the world’s leading retailer of specialty coffee beverages and accompanying confectionery items. Starbucks was established in 1971 in Seattle by Jerry Baldwin, Zev Siegal and Gordon Bowker. Currently, Starbucks has over 21,000 stores and operates in more than 63 countries. The company’s mission is to offer an opportunity for people to enjoy a good cup of coffee and engage in a good conversation. The following situational analysis provides a detailed look at the current business situation of Starbucks by providing an in-depth analysis of the company’s current product, market, opportunities, and challenges.
As of November 2016, Starbucks has 23,768 stores worldwide. The chosen leader, former CEO Howard Schultz, founded Starbucks Corporation. (Das, 2017) 2. Harlem Children’s Zone (HCZ) Harlem Children’s Zone (HCZ) is a non-profit organisation.
Gordon Bowker, Jerry Baldwin and Ziv Siegl founded Starbucks in 1971. Their goal was to sell the finest quality whole beans and ground coffees (Starbucks timeline and history, 2004). In 1982, Starbucks had grown to five stores and started serving coffee to restaurants and espresso bars. Harold Schultz was employed as the director of retail operations and marketing. Harold Schultz convinced the founders of Starbucks to open a downtown Seattle coffee bar, which opened in 1984. With the success of Seattle coffee bar, Schultz left Starbucks to start his own company named Il Giornale. In 1987, Il Giornale acquired Starbucks retail operations for 4 million dollars. In addition, Il Giornale changed its name to Starbucks Corporation and opened locations in Chicago and Vancouver, B.C. (Starbucks timeline and history, 2004).
Starbucks is known for the extraordinary coffee that they have provided over decades. Although the coffee is great and the business is successful, other aspects can put a treat on the company just as any other business. When it comes to the downfalls “higher commodity cost, intense competition, and legal proceedings can have an adverse impact over the business” (Lemus, E.). Per Lemus in the article “Starbucks Corporation: Leading Innovation in the 21st Century” Starbucks current SWOT analysis is as follows:
Koehn, N.F., Besharov, M.A., & Miller, K. (2008). Starbucks Coffee Company in the 21st Century. [Case study]. Boston, MA: Harvard Business School Publishing.
Starbucks is an international coffee house and it was created in 1971 when they opened the first store in Seattle, Newcastle. Currently, they own 21,000 stores in 65 different countries of the world, and their passion for the great coffee, excellent service and community interaction exceeds cultures and languages (Starbucks, 2014). This company is the number 1 brand coffeehouse chain in the world due to the best roaster, marketer and seller of speciality coffee. Its main slogan: “Our mission: to inspire and nurture the human spirit – one person, one cup and one neighbourhood at a time” (Jurevicius, 2013).
Many people would assume that Starbucks has reached, or is fairly close to its saturation point. In just about any city, suburb, transportation hub, or college campus, there’s a Starbucks location to meet coffee drinkers needs. A likely investment for Starbucks would be to continue its expansion worldwide. Not only should Starbucks concentrate on expanding its footprint, but also continue to alter its stores. Rather than opening more dine-in restaurants, Starbucks should concentrate heavily on drive-thrus in urban and suburban areas. In addition, Starbucks is opening up express stores which are essentially walk-thrus in New York, Boston, and Seattle. This strategy is aimed at increasing the company’s store penetration into the coffee market.
In 1971, Starbucks opened its doors to society to become one of the most well known coffee chains. The first store is located in Seattle as part of the Pike’s Place Market and a huge tourist attraction. I have personally been there several times when I was stated in Washington State from 2011-2013. “In 1981, Howard Schultz (Starbucks chairman, president, and chief executive officer) had first walked into a Starbucks store. From his first cup of Sumatra, Howard was drawn into Starbucks and joined a year later 2014).” Forty-two years later you can still go into this chain and get a pleasant ye expensive cup of coffee, but I believe in you get what you paid for. “Toda, with more than 18,000 stores in 62 countries, Starbucks is the premier roaster and retailer of specialty coffee in the world (2014).”
With clear core values towards providing quality coffee, the best service, and atmosphere, Starbucks has enjoyed great success since it was founded 30 years ago. The company has being doing very well for last 11 years with 5% or more store sales increase, even with the rest economy still reeling from the post-9/11 recession. However recent research, conducted to Starbucks, have showed some concerns regarding company’s problem meeting customers’ expectations.
In 1971, three young entrepreneurs began the Starbucks Corporation in Seattle Washington. Their key goal was to sell whole coffee beans. Soon after, Starbucks began experiencing huge growth, opening five stores all of which had roasting facilities, sold coffee beans and room for local restaurants. In 1987, Howard Schultz bought Starbucks from its original owners for $4 million after expanding Starbucks by opening three coffee bars. These coffee bars were based on an idea that was originally proposed to the owner who recruited him into the corporation as manager of retail and marketing. Overall, Schultz strategy for Starbucks was to grow slow. Starbucks went on to suffer financial losses and overhead operating expenses rose as Starbucks continued its slow expansion process. Despite the initial financial troubles, Starbucks went on to expand to 870 stores by 1996. Sales increased 84%, which brought the corporation out of debt. With the growing success, Starbucks planned to open 2000 stores by year 2000.