WorkEE

Feasibility Report

April 19, 2018

Executive Summary

The opportunity addressed by the proposal refers to the fast movement of coffee as a product. This offers a great opportunity for coffee companies like Starbucks to come up with more strategies for marketing their product and increasing sales. The options available for exploitation include implementation of a drive-through and complete remodeling of the shops.

Problem Statement

The opportunity addressed by the proposal refers to the fast movement of coffee as a product. This offers a great opportunity for coffee companies like Starbucks to come up with more strategies for marketing their product and increasing sales.

Project Business Requirement

In 2013, Dunkin Donuts, a competitor of Starbucks which is also involved in the coffee business, unveiled plans for remodeling and this excited the customers. Franchises were also required to use the same renovation strategy as indicated in their contract. To get more customers, the company gave franchises four choices to select from including Jazz Brew, Dark Roast, Cappuccino Blend, and Original Blend. The themes featured differences in layouts, lighting, and color schemes. Within three months, the company had renovated one hundred stores.

The new look entailed digital menu boards, electrical sockets for charging PCs and phones. The styles that were to be picked by the franchisees fitted well into the demographics of the target market. The Jazz Brew style’s energy was suitable for a young audience like University students. Majority of these changes represented a culture shift for the company whereby they wanted to move from a culture of wanting the clients to come and leave as quickly as possible to wanting the clients to stay a bit longer in the coffee shop.

Therefore, it will be feasible for Starbucks to make some renovations which are tailored to meeting the needs of the customers and which are also welcoming and have the potential to grow the revenue of the business.

The other issue regarding the proposal was reducing lines by Making Starbucks drive through. There has been a success with some companies like Mudslingers Drive-Through. Sometimes, motorist lacks parking spaces and end up missing their chance to get a good cup of coffee. However, with a drive-through, motorists need not worry about parking spaces and standing long on the line. Drive-through coffee shops provide coffee on the go.

Assessment Options

Option 1

Option one is to remodel all the Starbucks coffee shops with a new look which will satisfy the demographic needs of the target market. Various styles of remodeling will be considered for the different markets since the company serves coffee to millions of customers all over the US. This consideration will depend on the region and for example, Starbucks near or around college Universities will include a theme that is friendly to the younger generation while a theme that is in the city will include a theme that embraces the urban life. Below is the evaluation of the options:

Alignment with the desired business objective

The objective of the business is to deliver coffee to consumers in a unique way that is both professional and friendly while still generating revenue for the company. Remodeling the shops according to the demographics of the target market is perfectly aligned with this goal. It will bring more revenue to the business and make the clients comfortable to spend time at the shops.

Costs

The remodeling will involve various dynamics ranging from painting, new furniture, marble floor, new counter, and various arts.

The painting will cost $200, the furniture will cost $3000, marble floor will cost $1500, a new counter will cost $6000, and arts will cost $ 4000 while labor will be $30,000. This will be a total of $44,700 per shop.

Costs Benefit

Within the first year, the revenue is estimated to increase by $150,000 due to the new look. This will offset the remodeling cost and leave $105,300 as profits.

Legal/Regulatory Fit

No laws or regulations will be broken in the remodeling process. Therefore, the plan is solid.

Impact

The impact of the remodeling plan will be good public relations since the remodeling will create a buzz and send a message that the company is working to meet the needs of the clients. The option will also increase the flow of customers and consequently increase the revenue of the business.

Option 2

This option involves making Starbucks a drive-through coffee shop where clients with motor vehicles will have a chance to buy their favorite coffee while still in their cars.

Alignment with the desired objectives

This option will be aligning with Starbucks’ objective because it will be meeting the needs of a segment of the market that it had previously been neglecting while increasing their revenues.

Cost

The cost of implementing a drive-through will be high due to the procurement of additional space. It might go up to $300,000 due to additional land bought. However, the cost of space will not apply to every region. Also, it will not apply to shops which are in the middle of the city.

Cost-benefit

Within the first year, the shop will increase the revenues by $240,000. This sale will not be able to offset the high cost of buying space

Legal/Regulatory fit

There are no laws hindering this plan, but it will be necessary to get necessary documents while buying more space.

Impact

The plan will increase more clients to the shop due to more motorists in addition to the regular customers. Also, the regular customers who had cars will be more satisfied by the plan and therefore create brand loyalty.

Recommended Options for Further Analysis

It will be best to further analyze the drive-through plan because of the numerous dynamics surrounding it.