Starbucks Project Management
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kmgt_685-4b.docx
KMGT-685-201440-1: SUSTAIN PROG & PORTFOLIO MGMT
ASSIGNMENT QUESTION (4)
H00031911
STARBUCKS.
Coffee and Snack Shops Industry
The Coffee and Snack Shops industry has been a victim of the weakened economy, the rapid rise in unemployment and, to a lesser extent, society’s rising awareness of the health risks associated with diets high in fat, salt and sugar. Despite these obstacles, the industry has responded to changes in consumer preferences, which has helped revenue, grow. In 2009, industry revenue declined 6.6% to $25.9 billion, but since 2010, the industry’s revenue growth has been positive.
The Coffee and Snack Shops industry’s recent growth is expected to continue over the five years to 2018. Coffee and snack shops will benefit from the improving economy, the declining unemployment rate and the increasing rate in which consumers spend money on luxuries like eating out. Furthermore, during the five years to 2018, consumer spending is expected to increase. The US economy’s continued recovery during the next five years will play a large role in boosting demand for coffee and other snacks. As consumer spending continues to rebound, consumers will increasingly parlay their pocketbook flexibility into quick, satisfying edible fixes provided by industry operators. In addition, operators will continue to stimulate renewed interest in their products by expanding their menu options that appeal to health-conscious consumers.
Mission and Strategy Overview
Starbucks stores vary in size and format, and are typically situated in high-traffic, high-visibility locations. Store settings include downtown or suburban retail centers, university campuses, office buildings and off-highway locations. Starbucks has also started offering drive-through locations to further leverage the chain’s convenience factor.
The Starbucks brand was built on coffee, and the company still offers a broad range of regular and decaffeinated coffee beverages, along with espresso drinks. The company has also expanded into a number of product lines, and it now serves a large assortment of food items, fresh juice and packaged goods. In the five years to 2013, Starbucks has sought to further diversify its product offerings with a number of multimillion-dollar strategic acquisitions. In November 2011, Starbucks acquired Evolution Fresh, a natural fruit and vegetable juice maker. A year later, in November 2012, the company acquired Teavana. Most recently, in June 2013, Starbucks purchased bakery chain La Boulange with the aim of integrating the company’s baked goods into its menu.
Mission and Strategy of SBU
Cooking Distribution has designed an SBU with the objective to create the top quality coffee easily obtainable no matter the time or place while keeping quality and interest in mind. The Cooking Distribution SBU wants to be able to provide a item to our client in a rapid method while not dropping the excellent flavour and personal connection that has been designed within our shop. The Cooking Distribution SBU wants to carry everything excellent that Coffee shop has established within its shop to our clients door (Starbucks, 2011).
The Cooking Distribution SBU technique has been designed around the strategy that Coffee shop as a company already maintains. We want to be able to take this technique from a stand still place and create the excellent items that Coffee shop provides into a more mobile type atmosphere. We want to be able to carry the excellent items that Coffee shop provides to the clients rather than having the client come to Coffee shop. When dealing with Coffee shop current business technique there are couple of points that can be taken out of the design. We will still be involved with our Coffee, Associates, Customers, Community, and Investors, but shops in a sense of atmosphere will no longer be an issue with this new item. The shops will be the designer and the one offering the delivery of this service. With the item list that Coffee shop currently provides clients will now have the ability to order our items and have them sent to a place of their choice. This will allow for Coffee shop to get the client on the go and achieve a more ideal application of their item into the important category part of community.
Proposed Portfolio Process
Cooking Distribution Project Profile concept is to offer delivery services of Starbucks drinks (coffees, teas) and specialised foods to their client's office or home. This support will offer a single walk on demand to the clients desired delivery point. Our portfolio provides the development of an application (App) through the Groupon internet marketing company/service as well as through Starbucks website to access the delivery support. The App will be designed to connect Starbucks clients with the click of a mouse or the touch of a smart-phone. The client will be persuaded to select one or several of our products from the applications selection, enter the details and provide address along with other information to ensure we provide their coffee and special treats promptly. The Starbucks cafe closest to the client's place would receive notice of the client's purchase. The Starbucks place receiving the transaction will be persuaded to validate invoice of the client's purchase via test texting showing the store place. Starbucks will then continue to complete the transaction. The support provided by Starbucks continue to build on their client relationship, increase their client areas, offer a convenient support by reducing the need for “on the go customers” having to stop on the way to work to purchase their Starbucks drinks, losing time standing in long lines. This ideal approach gives Starbucks a competitive advantage over its competitors.
Proposed Selection Criteria, Methods & Justification
The suggested choice requirements is not only an ideal one but also designed upon the same requirements in which Coffee house was designed. The initial suggested choice requirements was based on ‘feeding to the spirits of people’ through our suggested on-demand distribution solutions. Within the present employees are people in an ‘on the go market,’ with quick moving working surroundings along with e-commerce customers, Coffee house distribution support is a natural fit for corporate and institutional client worksites, house based businesses, unique occasions and conferences as well as house clients, reducing and not wasting here we are at the ‘on the go and quick moving client market’. The ideal requirements were also based on the maximum density of Starbuck shops located within the town centre area for the city of Chicago; a total of 48 places were designed within the town centre business region areas. (Starbucks in Illinois/Chicagoland May 21, 2011) The technique for applying Coffee house distribution support concept to clients will be through in-store discounts, email advertising, on-line applications for smart-phone customers, television advertisements, paper ads as well as through Coffee house website and Facebook social networking network. Customers will be able to register their on-line information of perform and house details to locate the providing Coffee house shops near them.
Lastly, the assessment and efficiency of this suggested venture would be every quarter to avoid any accumulative failures and to take quick remedial activities. The best assessment methods for this venture would be through financial assessments by calculating the following criteria: 1) ROI for any new investment made against the old investment strategies as well and 2) Net benefit for each lead store to individual between productivity and non-successful shops. The validation for this suggested venture is that it adjusts with the Starbucks’ Organization technique and objectives, it is reliable with the business's principles and lifestyle, the suggested venture plays a role in the income, sources as well as the long run success of the organization.
Organizational Structure
Starbucks has been developed on the concept of providing quality coffees and a pleasant environment since its beginning in 1971. Lately, with the ideal promotion of President Howard Schultz and CEO Orin Cruz, the matrix business framework of Starbucks has been re-designed. To better offer for their clients, Starbucks has made the decision to go from two to four U.S. sections including Western/Pacific, Northwest/Mountain, Southeast/Plains, and Northeast/Atlantic (Schultz, 2008).
The merging of the groups allows Starbucks to make a framework that is able to improve issue recognition reaction time in part to the straight and horizontally direction for the circulation of information (Gido & Clements, 2009). Schultz’s objective is to more carefully arrange the business with the clients and being able to easily react to their needs and wants. This is clearly seen through the combined projects with PepsiCo, Hairdryers ice lotion, US Airways, Tzao Tea Company, and various markets across the nation and the world (Schultz, 2008).
References
· Coffee Statistics. (2011). Retrieved May 15, 2011, from Coffee-Statistics.com: http://www.coffee-statistics.com
· Griffin, M. (1999). Coffee. Retrieved May 15, 2011, from Coffee Search: http://www.coffee search.org
· Starbucks. (2011, May 15). Retrieved May 15, 2011, from Starbucks: http://www.starbucks.com
· Gido, J & Clements, J.P. (2009). Successful Project Management. Cengage Learning. Mason, Ohio.
· Hiegel, J., James, R. Cesario, F. (2006). Projects, Programs and Project Teams. Advance Program Management. Wiley & Sons, Hoboken, N.J.
· Schultz, H. (2008). Howard Schultz Transformation Agenda Communication. Retrieved May, 16, 2011 from: http://news.starbucks.com/article_display.cfm?article_id=67
· Keurig. (2011). The Keurig Story. Retrieved May, 16, 2011 from: http://www.keurig.com/the-keurig-story
· Starbucks Store Density Locations. Retrieved May 20, 2011 from Starbucks in Illinois/Chicagoland from: http://www.starbuckseverywhere.net/Chicagoland.htm
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