A. Decreasing Sales
Over the past several years, Green Mountain's sales growth has decreased. In 1998, net revenues totaled at 55.8 million dollars. There was an increase in sales over the following years. In 2002, revenue increased by a mere 4.6%.There are several flaws and problems in the company that may decrease revenue sales.
There are six major competitors: Gevalia, Illy Café, Millstone, Peet's Coffee and Tea, Seattle's Best and Starbucks. Starbucks seems to have a strong share in the available market. Starbucks is highly aggressive in the retail market and will have an enormous impact on future sales and profit of Green Mountain Coffee. Starbucks is already the leading retailer, roaster, and brand name coffee in the world. In 2002, sales were at $3.3 billion up 90 million dollars since 2001. With the help of the retail market, Starbucks may soon have a bigger share in the wholesale market. Our market portfolio is narrow in a sense we only supply the wholesale market.
C. International Market
Green Mountain's sales and operations are based mainly on the East coast. The company is expanding domestically, yet needs to consider the international market. The United States accounted for only 20% of the international market, but even our sales are a mere percentage in the market share. Our international market is 0.8% of our total sales in 2002. Starbucks is considering expanding in the international market with ambitions of opening 25,000 retail locations world-wide. They are currently operating 10,000 stores in over 60 countries.
II. Analysis and Evaluation
During my analysis, I've come across many factors that are decreasing Green Mountain's market share. Recent tr...
... middle of paper ...
...needs to adapt to the changing trends.
Green Mountain management made a cautious decision to close its retail locations. Although sales were flat, retail locations can be used as a vehicle for customers to sample Green Mountain coffee. If customers are unfamiliar with the taste of Green Mountain coffee, they will not purchase Green Mountain coffee at supermarkets or other sale locations. Starbucks' success is due to its retail locations. Customers understand the reputation of Starbucks and are familiar to the expensive, social, great tasting coffee. Opening retail locations or advertising and familiarizing customers with the taste of Green Mountain coffee will benefit the supermarket market. The recommendations set forth will increase our potential market share and also improve sales. They will also give Green Mountain a familiar coffee taste to our customers.
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