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Starbucks Flavor Recognition Paper

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Running head: TEAM ÐŽoDÐŽ±: STARBUCKS Coffee Flavor Recognition

Starbucks Coffee Flavor Recognition

Learning Team ÐŽoDÐŽ±

University of Phoenix

MBA510

Managerial Decision Making

Wawa Ngenge, Ph.D.

July 21, 2007

Problem Solution: Starbucks

Starbucks focuses on providing the consumer with a large selection of coffee flavors and a comfortable atmosphere to socialize in. Customers enjoy the vast array of coffees and teas, which has established the company as the front-runner in the coffee industry. From the companyЎЇs modest beginning in SeattleЎЇs historic Pike Pace market in the early 1970s to the present, Starbucks continues to push the edge of innovation in the coffee industry through the introduction of frappuccinos, lattes, mochas, and other flavored teas. In the companyЎЇs 30 plus years of coffee industry experience, the company has increased to more than 6,000 locations in over 30 countries. The creation of new coffee flavor combinations will increase the brand recognition of the Starbuck coffee line and promote the companies vision of rapid company expansion. Through the use of correlation, correlation analysis, linear regression, time series analysis, and forecasting Starbucks management staff will be able to predict what types of coffee flavors will attract the largest number of consumers in each geographic location that Starbucks has made plans for expansion.

Situation Analysis

Issue and Opportunity Identification

StarbucksЎЇ desire to improve the brand recognition of the companyЎЇs coffee has prompted the executives of the company to consider increasing rate of opening new stores and developing new coffee flavors. To be able to achieve this goal, Starbucks will need to adhere to the mission statement and guiding principles that the company has set to measure the appropriateness of their decisions. The mission statement of Starbucks is to ÐŽoestablish Starbucks as the purveyor of the finest coffee in the world, while maintaining our uncompromising principles while we growÐŽ± (Starbucks Corporation, 2007).

The issue with rapid expansion of the company is over exposure of the StarbuckЎЇs brand name in the coffee industry. By Starbucks using time series analysis the researchers for the company will be able to determine what rate the company should expand to increase coffee brand recognition without over exposure to the consumer. The introduction of new coffee flavors in each geographic location will need to have multiple regression analysis performed to make sure that each coffee flavor used in each store matches the coffee flavor interest of the consumers that patron those stores. It will be essential for the Starbucks executives to measure the correlation of coffee flavor to consumerЎЇs preferences to be able to make appropriate decisions about which coffee flavors should be used in each store to maximize profits.

Stakeholder Perspectives/Ethical Dilemmas

There are many stakeholders in this situation Diana Reid from Skoll foundation states that stakeholders such as the employees connect the Starbuck vision to the consumers. The shareholders provide informative investment ideas for the efficient use of the financial resources of the company. (Partner organizations such as licensed stores and food service accounts provide the means for Starbucks to market the companies coffee lines in new industries. Government organizations (such as USAID, as well as national governments in coffee growing countries such as Costa Rica, Guatemala, Kenya, Nicaragua and Tanzania) (Reid, 2006). These organizations are very important for Starbucks because they provide the quality coffee beans that the company uses to create coffee. The media and marketing techniques used by the company will be instrumental in ensuring that the Starbuck brand image is effectively marketed to all consumer groups.

In addition, many ethical dilemmas will arise because of the rapid expansion of the company. Should staffing levels be decreased to increase shareholder value? Stockholders interests revolve around the value of the stock. So the increase in brand image should increase the value of the stock but could lead to decrease in stock value due to over exposure of the StarbuckЎЇs coffee lines. Stockholders determine what measures should be made to increase share value. This could lead to added pressure to institute unethical practices to drive stock value. The need for job security is one of the main concerns of the employees of the company. The company vision of increased market share and profitability could lead to streamlined business processes and reduction in staff to increase profitability. This would make employee job security questionable.

Consumers value the quality of the products sold and the availability of store locations. Do the customers value the company enough to purchase products? Is there a strong competitor in the coffee industry that can offer the same products that would take some of StarbuckЎЇs market share? Because of competition Starbucks could use unethical means such as trying to recruit the competitions employees to weaken the competitorЎЇs.

Problem Statement

Start problem statement here.

End-State vision

Starbucks achieves progressive product developments and substantial market growth by region with the launch of new products and services to maintain and expand the current client base by building a larger customer base. Starbucks produces new coffee flavors to meet the evolving wants of the consumersЎЇ brand recognition.

Alternative Solutions

- An alternative for Starbucks to improve the companyЎЇs brand image would be to develop the companyЎЇs Internet business. By Starbucks improving its internet business they will be able to further promote new and old coffee flavors to the consumer.

- For years Starbucks has relied on word of mouth to help build the companyЎЇs customer base. The use of a marketing campaign will help give the company expose to consumers in locations that have not heard of Starbucks or the flavors of coffee the company has to offer.

Analysis

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