Categories for Coffee

Benefits of Drinking Coffee and the Benefits of Green Tea Essay

Benefits of Drinking Coffee and the Benefits of Green Tea Essay

Compare and contrast the benefits of drinking coffee with the benefits of green tea? It is nice to have a cup of hot drink in the morning, there are many options which to choose, such as coffee and green tea, two famous drinks in the world. They have different effects on body, and could prevent different kind of diseases, one similarity thing is both of them contain Caffeine. Coffee could effects on body, prevent diseases and contain vast caffeine. Your muscle strength will be stronger after you drink coffee because of caffeine, coffee couldn’t make you fatter, but if you put sugar into your coffee, it will make your stature fatter, and almost everyone put sugar in theirs coffee.

According to Brian Fung (2012, July 3rd), “We are learned that coffee can protect your heart, reduce the risk of prostate and breast cancer, and curb the risk of fibrosis among those with fatty liver disease.” Drink coffee is not a preferred option before you go to bed, because of the caffeine, it could stronger refresh you, so it better to drink it in the morning.

Green tea could make you body slim, prevent diseases and contain caffeine. An antioxidants called catechins was found in green tea, it could inhibits the cholesterol produce, decrease the cholesterol content could make you body healthy.

According to Leslie Beck (2011, July 5th), “It’s a beverage that’s touted to boost metabolism, prevent cancer, ease arthritis pain, even fight dental cavities. Now, new study findings suggest there’s one more reason to drink green tea: It lowers blood cholesterol.” If somebody was drunk, green tea could help you get out of that bad condition because the caffeine that in green tea could boost metabolism. In conclusion, different people have different opinions, both coffee and tea is benefit for us. So what drinks is not important, the important thing is to understand yourself and find an appropriate drink.

References
Fung, Brian. (2012, July 3rd). The Case for Coffee: All the latest research to defend your caffeine addiction, in one place. The Atlantic . Retrieved from http://www.theatlantic.com/health/archive/2012/07/the-case-for-coffee-all-the-latest-research-to-defend-your-caffeine-addiction-in-one-place/259404/#.UGODjDyjSBw.email Beck, Leslie. (2011, July 5th). Why green should be your cup of tea. The Globe and Mail. Retrieved from

http://www.theglobeandmail.com/life/health-and-fitness/why-green-should-be-your-cup-of-tea/article4210709/

Coffee and Tea Essay

Coffee and Tea Essay

Coffee and tea have existed in the world for a long time. Hundreds of years ago, people who lived in South America started to produce coffee, but the earliest drink likes coffee was made by ancient Arabian. They thought it was a kind of medicine used for stomach. After the 15th century, coffee was spread to other countries such as Egypt and Ottoman Empire by Muslims who were back from Hajj, while in ancient China, Chinese people started to make tea about 3000 years ago.

Because of nice environment and weather, the first part of tea plants was discovered in southwest China.

After, drink tea became an important culture of Chinese people, and tea began to spread into countries near China. Coffee and tea are similar, but different in some specific area. First, coffee and tea are similar but different in population. People from all around the world like them. For example, British people used to drink a cup of tea with some snacks when they have a rest in the afternoon.

Western people enjoy drinking black tea, and some of them mix it with milk to make milky tea. Likewise, most people like drinking coffee, for it often tastes good.

In China, more and more people began to drink coffee, and some of whom want to taste better coffee like blue mountain coffee. However, although these two drinks are both popular around the world, coffee is still drunk most by western people, while the most quantity of tea is used in East Asia. People lived in China, Japan, and Korea regarded tea as the main drink. Second, coffee and tea are similar but different in function. Both coffee and tea can refresh people because there is a kind of chemical matter, which is caffeine in both of them.

This chemical matter can be used for nerves to make a person feel awake and lively. Also, some experts said that black coffee and green tea can help a person lose weight. But, in contrast, tea has some more functions due to another kind of chemical matter which can’t be found in coffee. This chemical matter that named tea polyphenol whose ability is to relieve the effect that is made by poison. Finally, coffee and tea have similarity and difference in origination. Both of them are made from plants.

Thousands of years ago, people lived in Africa planted coffee trees in succeed, and now, Brazil has the most coffee trees in the world. In south of China, there are a lot of terraced fields that grow tea trees. On the other hand, people use leaves from tea to make tea, while they use fruits from coffee plants to make coffee. To sum up, coffee and tea are similar in their population, function, and origination, while they are different of their use in different place, their different chemical matter, and their different material. I suggest that people should drink both coffee and tea so that they can be healthier.

Coffee and Starbucks Essay

Coffee and Starbucks Essay

Starbucks is a premium coffee wholesaler which has strayed from its original service of coffee. The advent of newer technology has diminished the Starbucks experience. Howard Schultz, Starbucks chairmen, sent a memo on February 14, 2007 addressing this problem to the president and chief executive officer of Starbucks, Jim Donald. In the memo, Schultz voiced his opinion on how the rapid expansion of Starbucks is causing him to revaluate the company’s values between how it operated when it began and where it is heading in the future.

Starbucks isn’t the same neighborhood store as it was when it was established and no longer shows the passion for coffee that they had in the beginning. “I have said for 20 years that our success is not an entitlement and now it’s proving to be a reality. Let’s be smarter about how we are spending our time, money and resources. Let’s get back to the core” (Schultz). Along with its expansion, Starbucks has been trying to utilize new technologies to improve the product they sell to consumers.

Starbucks changed their espresso machines from manual to automatic to speed up service and efficiency. These machines “blocked the visual sight line the customer previously had to watch the drink being made, and for the intimate experience with the barista” (Schultz). People no longer have that intimate connection with the people making their coffee, or to the finished product. The employees are also more disassociated from their work because of these new machines that speed up production.

Starbucks also incorporated flavor-locked packaging to supply the demand for fresh roasted coffee. This is a great service to the customer because it keeps coffee grounds or beans fresher longer, yet the effectiveness of the flavor-locked bags contributed to the loss of aroma, “perhaps the most powerful non-verbal signal”, in Starbucks (Schultz). The romance of Starbucks is lost with these improvements and the unforgettable scent is lessened along with its heritage.

Starbucks is still a coffee-loving company, and consumers are still receiving the coffee delicacies they want, but at what cost to tradition. https://sites. google. com/site/hollymadalyn/writing/Starbucks-Research-paper SYNOPSIS Starbucks Corporation, originally founded in 1971, but purchased by Howard Schultz in 1987, is the market leader in selling gourmet coffee (Starbucks, 2008). Starbuck’s main objective is to establish itself as the most respected and recognized coffee brand in the world (Fact Sheet, 2008).

Starbucks has accomplished this objective and experienced much success through their competitive strategy of clustering several stores within the same community and through their distinctive competencies of roasting and selling the quality coffee while providing high quality customer service. The question is, can Starbucks continue their market share growth with rising competitors? Should they focus more on their international operations? Can they continually reinvent themselves to maintain their strong brand image in the long run? PROBLEMS.

• Overall economic downturn can affect Starbucks’ market share if management neglects to address competitors’ strategies with lower priced offerings as consumers are becoming more conservative in spending their discretionary income. • Loss of identity and authenticity focused upon the foundational Starbucks experience, which, if unaddressed by management, can result in dissatisfied customers, loss of sales, and decreased market share. • Considering the economy and increasing domestic competition within the U. S. , Starbucks must address their less profitable international operations.

SWOT ANALYSIS[1] INDUSTRY EVALUATION In the past two decades, the coffee industry has experienced a significant increase in the demand for premium coffee. Today, about one in five Americans drinks some type of espresso-based coffee drink each day. The average yearly coffee consumption per capita in the U. S. is around 4. 4Kg. Among these coffee drinkers, the average consumption is 3. 1 cups of coffee per day, with men drinking approximately 1. 9 cups per day, and women drinking an average of 1. 4 cups per day (Coffee Research… [continues].

Coffee and Starbucks Essay

Coffee and Starbucks Essay

Then..
 First Starbucks opened in Seattle
Washington.
 March 30, 1971
 Jerry Baldwin – English teacher
 Gordon Bowker-Writer
 Zev Seigl-History teacher

Then…
 Entrepreneur Howard Schultz
joined the company in 1982.
 Director of retail operations and
marketing.
 Ideas of selling beverages.

Then…
 April, 1984 first store to sell
beverages was opened.
 Served 400 customer- over the 250
customer average at their best score.
 II Giornale Acquires Starbucks.
 Howard Schultz- Starbucks president
and CEO.

Now…
 World’s premier roaster and retailer
of specialty coffee.
 8,812 company-owned stores.
 7,812 licensed stores in more than
50 countries.

Now…
 Annual sales of about US$14.89
Billion.
 Sell: Whole bean coffee, Ground
Coffee, pastries, beverages and
coffee related products.

Mission Statement
1990- October 2008
Establish Starbucks as the premier
purveyor of the finest coffee in the
world while maintaining our
uncompromising principles as we
grow.

Vision…
Starbucks Digital Network, in
partnership with Yahoo!
Its vision is to provide best cup of
coffee to include providing the best
digital experience. They are now
offering music among choices from
their digital network.

Opened with Tata global beverages.
(50-50)% partners
First In Mumbai, October 19, 2012
Now 54 stores in Four cities (in 17
months)
 CEO of TATA Starbucks is Avani
Saglani Davda.
 Starbucks also get source to coffee
beans from Kodagu (Karnataka)
 Opened with investment of US$66
Million.



Ethics…
Starbucks and Shared Planet is committed
to doing business responsibly. A better
way to help each other and planet.

SWOT
Analysis

Strengths…
 Leading retailer and roaster for
brand specialty coffee in the world.
 Known for providing superior
products and services.
 Number 7 on Fortune Magazine’s
“100 best companies to work for”.
 Consistent high quality of service.
 Limited no. of strong competitors.
 High market share and market
growth.

Weaknesses…
 High prices because of quality
ingredients used.
 Starbucks refuses to guarantee
that milk, beverages, chocolate,
ice cream and baked goods sold in
the company’s stores are free of
genetically- modified ingredients.
 Strong presence in U.S. more than
three quarters of its cafes located
in the domestic market.
 In order to reduce business risk,
expansion is needed.

Opportunities…
 High growth of economy and
market in Indonesia, especially in
urban areas.
 Could diverse their product not
only in coffee.
 The potential employees are
educated peoples which make it
easier to train them.
 Strong financial support.

Threats…
 Competitors and copycat could
pose potential threats.
 Sentimental issues to the bad
effect of coffee from society.
 Global financial crisis-make
people tend not to spend.
 Exposed to rises in the cost of
coffee and dairy products.

Competition…

Company Financial
Report
 Revenue: US$14.89 Billion
 Operating Income: US$325.4
Million
 Net Income: US$8.8 Million
 Total assets: US$11.5167 Billion
 Total Equity: US$4.48 Billion

Conclusion…
 Summary Strengths Opportunities
Threats Conclusion Weaknesses
Overpriced coffee.
 Health concerns regarding caffeine and
caloric intake.
 Main focus on expansion rather than
internal improvement.
 Total revenue of $10.7 billion in 2010.
 Starbucks has added an average of two
stores on a daily basis since 1987.

Coffee and Starbucks Essay

Coffee and Starbucks Essay

The overall goal of Starbucks Management was to create an American version of the Italian coffee bars that Howard Schultz had experienced first-hand in Milan. He believed that Starbucks should function as an important part of the community, as a meeting place for its customers. He wanted Starbucks to become an experience that would differentiate itself from its competitors. One of their key strategies in meeting this goal is a focus on customer service in order to create an experience for its consumers.

Another one of their strategies is to ignite their emotional attachment with consumers.

They also have a commitment to improving their business through better training, tools, and products and to give attention to store-level economics and operating efficiency. All of these are prongs to their strategy that will allow Starbucks management to turn Starbucks into a location where people don’t just go to grab coffee, but to experience the atmosphere of an Italian coffee shop. Another prong to their strategy is to offer many different products and to distribute them among a variety of distribution methods.

Which one of the five generic competitive strategies discussed in Chapter 5 most closely approximates the competitive approach that Starbucks is employing? There are five generic competitive strategies that can be employed and they are low-cost provider strategy, broad differentiation strategy, focused low-cost strategy, focused differentiation strategy, and best-cost provider strategy. The strategy that Starbucks uses is broad differentiation where they seek to differentiate their product offerings from rivals’ with attributes that will appeal to a large variety of consumers.

The key market characteristic for the strategy of differentiation to work is that buyers’ needs and preferences are very diverse and cannot be satisfied with a standardized product offering. This is an evident characteristic of the market because consumers all have different preferences on the way they like their coffee. Which is the reason why Starbucks offers many different product options like lattes, skinny lattes, coffee, iced drinks, blended drinks, etc. They also offer fruit cups, water, and bakery items to provide even more options for their consumers.

If a differentiation strategy is successfully implemented the firm will be able to do one of the following: command a premium price for its products, increase unit sales, and/or gain buyer loyalty to its brand. Starbucks has some of the highest prices for the type of products they offer and people tend to be extremely loyal to whatever coffee they are used to purchasing, because they trust the quality. Methods to enhance differentiation 1. Create superior product features, design, and performance Starbucks has a superior knowledge of coffee and a commitment to providing customers with quality coffees.

Providing top-quality, fresh-roasted whole-bean coffee was the company’s differentiating feature and a core value since the beginning of its founding. Couches, fireplaces, newspapers, drive-through windows, kiosks in supermarkets and other public places were added to locations depending on what would add value to their consumers. Due to their focus on providing a different experience depending on the location of the store, their international strategy is a multi-domestic approach.

The core characteristics of each new store was based on local materials and craftsmanship, a focus on reused and recycled materials and exposure of structural integrity and authentic roots. Most important of all they believed that coffee should be central and that distractions should be removed. They believed that the combination of all these elements should tell a story that would engage the consumer’s five senses and provide them with flexibility to meet the needs of the many different consumers that would be attracted to Starbucks.

2. Improving customer service or adding additional features When Howard Schultz first became part of the company he realized that one key problem Starbucks was having was that first-time consumers often felt uneasy about their absence of knowledge about high-quality coffee. An additional problem was that the employees came off as arrogant and unapproachable. He then worked with employees to teach them about friendly customer service and created a pamphlet to teach new customers about coffee.

He also began to offer part-time employees health insurance and a stock option plan for all employees, because he believed that if a company treated their employees well, then they would in turn treat their consumers well. The additional features that Starbucks offers are fireplaces, couches, music, Wi-Fi access, ability to use paid sites and services like Wall Street Journal’s site, exclusive content and previews, free downloads, local community news, and activities. 3. Pursuing production R&D activities Starbucks is constantly brewing new flavors and blends to offer their consumers a variety of coffee to try.

Flavors are rotated daily or weekly to offer constant variety. They also test new product offerings like Frappuccino’s, Lattes, Skinny Lattes, and seasonal drinks. 4. Striving for innovation and technological advances One way that Starbucks was able to constantly strive for innovation was by controlling the cost of opening and renovating stores by centralizing buying, developing standard contracts and fixed fees for certain items, and consolidating work under those contractors who displayed good cost-control practices. Starbucks retail operations group outlined the minimum amount of equipment each store would need.

This meant that standard items could be ordered from vendors in volume at 20 to 30 percent discounts. The items would then be delivered to the site from a warehouse or from the vendor. A technological advance was that they used computer software to build store layouts that would calculate costs as the design progressed. This cut costs by a significant amount and shortened the process of opening a store to 18 weeks. 5. Increasing intensity of marketing and sales activities Originally, Starbucks didn’t spend a lot of money on advertising, because they relied mostly on word-of-mouth.

In 2008 McDonald’s stepped up their advertising to highlight their McCafe coffee drinks. In order to counter this Starbucks undertook the largest advertising campaign ever. 6. Seeking out high-quality inputs Starbucks promotes environmentally sustainable practices in coffee cultivation methods and have specific guidelines they follow called Coffee and Farmer Equity Practices that help farmers to grow high quality coffees in environmentally beneficial ways. In 2000 they began purchasing their coffee organically and a growing percentage of their coffees were grown organically as well as Fair Trade Certified.

7. Improving employee skill, knowledge, and experience Starbucks has a commitment to training their employees so that they are better able to serve their customers. All partners and baristas receive at least 24 hours of training in their first two to four weeks on topics such as coffee history, drink preparation, coffee knowledge, customer service (for a total of 4 hours), and retail skills. Baristas in particular are required to learn how to grind beans, steam milk, pull perfect shots of espresso, memorize recipes, practicing how to mix drinks, and how to customize drinks.

Sessions also include how to operate the cash register, clean the milk wand, explain the Italian drink names, and making eye contact with customers. Management trainees are required to attend classes for 8-12 weeks and learn about store operations, practices, and procedures. When a new store is opened a Star Team of experienced employees are sent to make sure everything runs smoothly. From time to time, Starbucks conducts special training programs, including a coffee masters program, leadership training program, and career programs for partners in all types of jobs.

When does a differentiation strategy work best? A differentiation strategy works best when buyer needs and uses of the product are diverse, there are many ways to differentiate the product or service that have value to buyers, few rival firms are following a comparable differentiation approach, and technological change is fast paced and competition revolves around rapidly evolving product features. Starbucks’ actions to differentiate their product line They have expanded their product offerings along many different distribution channels by capitalizing on their growing brand name and awareness.

First they were able to market their product to restaurants, airlines, hotels, universities, hospitals, business offices, country clubs, and select retailers. United Airlines, Hyatt, Hilton, Sheraton, Radisson, Westin hotels, and Wells Fargo all began to serve Starbucks coffee. A joint venture with PepsiCo came with the sale of a bottled version of the Frappucino drink and Starbucks Doubleshot espresso drinks. In 2008, they partnered with Suntory to sell ready-to-drink Doubleshot drinks in Japan. In 2010 a partnership with Arla Foods spread Doubleshot products and Starbucks chilled cup coffees into retail stores in the UK.

A 1995 partnership with Dryers created a new line of coffee ice cream under Starbucks names that was later disbanded in 2008. At this time the rights to manufacture, market, and distribute Starbucks ice cream was given to Unilever. In 1998 Kraft Foods began marketing and distributing whole bean and ground coffee to supermarkets in the US. Tazo Tea was acquired by Starbucks in 1999 and in 2005 they acquired Ethos Water. A partnership with Jim Beam Brands created Starbucks Coffee Liqueur in 2004 and Starbucks Cream Liqueur in 2005.

In order to offer healthier options they began offering skinny lattes, banana walnut bread, fruit cups, yogurt parfaits, a farmer’s salad, and smoothies in 2008. Also in 2008, Starbucks responded to customer’s wishes to have a blend of coffee that was always in stores. They created the Pike Place Roast in order to satisfy these customers. 2009 saw the introduction of VIA instant coffee. In 2009 the retail sales mix of Starbucks was 76% beverages, 18% food items, 3 percent coffee-making equipment and other merchandise, and 3% whole bean coffees.

What are the key policies, practices, business principles, and procedures that underlie how Howard Schultz and Starbucks’ management have implemented and executed the company’s strategy? Key Policies, Practices, Business Principles, and Procedures The key policies that have been implemented can be broken down into five groups. First is how the company goes about expanding the number of Starbucks stores. The second is their international expansion practices. The third group is their staff training. The fourth is their principles towards ethical business practices.

Fifth, is their coffee roasting practices. Store Expansion Starbucks management’s approach to store expansion is using a hub city approach. After a suitable demographic area is chosen Starbucks begins to open up stores in a large city that serves as its hub. After about 20 stores are opened in this hub city, they will then move on to the surrounding areas that are the spokes. This expansion strategy serves to create buzz and brand recognition for the company in an area that has a high amount of foot traffic before moving into a location that has less customer traffic.

When a new area was selected for expansion a group of professionals were sent to facilitate the opening. Starbucks also had zone vice presidents who would oversee the expansion process and instill the culture of Starbucks in the new stores. International Expansion When expanding internationally Starbucks has two options; they either open company-owned and operated stores or license to a company that has a good reputation and the knowledge of retailing in that area. Starbucks prefers to license, rather than franchise because licensing provides more assurance of quality control.

When they move into foreign markets one of their practices is to use a partner or license to help recruit individuals for employees, set up relationships with suppliers, find store locations, and learn how to cater to local market conditions. For stores that were licensed Starbucks would receive a license fee and a royalty on sales. Companies that were licensed to supply Starbucks coffee were required to follow their detailed operating procedures. Not only that, but managers and employees were required to attend the same training as employees at company-owned stores. Staff Training.

As mentioned previously, employees are put through an extensive amount of training to learn daily practices and how to treat customers. They are put through this training because customer service is so integral to their organization. Some of the things that baristas learn in their 24 hours of training are coffee history, drink preparation, coffee knowledge, customer service, retail skills, and beverage preparation. Beverage preparation includes grinding the beans, steaming milk, pulling a perfect shot of espresso, memorizing the recipes, practicing the drinks, and learning how to customize drinks.

Finally, partners were trained on cash register operations, how to clean the milk wand, how to explain Italian drink names, how to sell espresso machines, making eye contact, interacting with consumers, and taking responsibility for the cleanliness of the store. Not only that but they had many rules that needed to be learned as well such as: milk needs to be steamed to 150 degrees Fahrenheit but not more than 170 degrees, an espresso shot not pulled within 23 seconds needs to be thrown out, coffee can’t sit in the pot more than 20 minutes, and disgruntled customers were given a coupon for a free drink.

Managers were required to go even more in depth with their training. Ethical Business Principles Starbucks purchases products that are Fair Trade Certified, meaning that farmers make a fair amount of money for their products. They are very involved in Corporate Social Responsibility and take a number of measures to reduce, reuse, and recycle. They are also committed to purchasing from companies that use environmentally sustainable growing practices. Coffee Roasting Practices Coffee recipes are put together by the coffee department once all components have been tested.

In order to be sure of consistency computerized roasters are used. Trained personnel are required to monitor the process by using hearing and their sense of smell to check when the beans are perfectly done. There are extremely exacting standards that must be met and the color of the beans is tested in a blood-cell analyzer and if it doesn’t meet the requirements the batch is discarded. Directly after roasting and cooling coffee is vacuum-sealed into bags that are guaranteed to preserve freshness for 26 weeks. However, policy says that after three months they need to be used.

Once opened the shelf life is seven days. What “values” does Starbucks have? How well do they connect to the strategy and to the manner in which the company conducts its business? Are they successful in implementing to them? The values that Starbucks consider important are included in their mission statement and those are: 1) Coffee: They are committed to providing their consumers with top-quality coffee that is ethically sourced, and to improve the lives of the people who grow the beans. They do this through a variety of methods. First is their Coffee and Farmer Equity Practices (C. A. F. E Practices).

These practices specify product quality, that the price received by farmers/growers is fair, that safe and humane working conditions are being used, and that the methods of growing are environmentally responsible. Second, they do not add artificial flavorings to their coffee beans. Third, they have Farmer Support Centers in Costa Rica and Rwanda. These support centers were staffed with agronomists and experts on environmentally responsible coffee growing methods and worked with coffee farming communities to promote best practices in coffee production They also worked to improve coffee quality and production yields.

2) Partners: In order to better care for their employees Starbucks has a health care plan available for all employees, a stock purchase plan, employee training, and employee recognition. Some of their employee recognition awards include Coffee Master awards, Certified Barista awards, Spirit of Starbucks awards, Manager of the Quarter, Green Apron awards, Green Bean awards, and Bravo! Awards, 3) Customers: They value connecting with customers and uplifting the lives of consumers by providing the perfectly made beverage and going the extra mile for their customers.

Employees are trained to take heroic measures to make customers happy. 4) Stores: Starbucks management’s goal was to create the stores to be a haven where customers belong and meet with friends. They do this by creating a store ambience, having interesting music playing, leather couches to sit and read newspapers in, and they make sure that nothing overpowers the smell of coffee. 5) Neighborhood: Their stores are part of its community and to be a force of positive good in the area. One way they do this is by using local materials and craftsmanship.

They are also extremely involved in Corporate Social Responsibility. The commitment to do the right thing has been a significant part of how Starbucks operates as a company ever since Schultz became CEO. Starbucks has been named to Corporate Responsibility Magazine’s list of “The 100 Best Corporate Citizens” for the 10th time in 2010. 6) Shareholders: Starbucks is committed to getting all of the above values right so that they can help everyone that is involved and affected by Starbucks thrive.

What is your evaluation of Starbucks social responsibility strategy? How much does it help to create their public image? Starbucks CSR strategy has four main parts which are: 1) Ethical sourcing of products: They do this through their C. A. F. E Practices, purchasing Fair Trade Certified products, and buying from manufacturers that have a commitment to environmental and social responsibility. 2) Community involvement: Starbucks has several organizations to foster community involvement.

First, is the Starbucks Youth Action Grants which involves young people in community involvement projects. Second, is their program to give medicine to people suffering from HIV in Africa. Third, is the Ethos Water Fund where they donate 5 cents every time somebody purchases a bottle of Ethos Water. Fourth, they donate money to the Starbucks Foundation which was the fund that was started in 1997 to handle all the Starbucks’ philanthropic actions. 3) Environmental Stewardship: In order to achieve this goal they have several methods.

First, they focus on increasing recycling and reducing waste which they do by giving discounts to people who bring in their own mugs, coffee grounds are donated for use as a soil amendment, they take part in Earth Day activities, they purchase paper products with recycled content and unbleached fiber, and they encourage their suppliers to provide energy-efficient products and eliminate unnecessary packaging. They also have commitments to be more energy efficient, use renewable energy sources, conserve water resources, use green facilities, using environmentally friendly building materials and energy-efficient designs.

They also have plans to achieve LEED certification globally. In 2009 they became part of the Businesses for Innovative Climate Change and Energy Policy coalition. They have also collaborated with the Earthwatch Institute and work on replanting rain forests, mapping water resources, and biodiversity indicators, and sharing sustainable agriculture practices with coffee growers. 4) Farmer loans: They provide funding to organizations that make loans to coffee growers. Their goal for 2015 is to donate $20 million dollars to these funds.

They have also committed money to hurricane Rita and Katrina victims, as well as to help the devastation after the earthquake in Haiti. Having a strong CSR campaign adds to the value of Starbucks’ products if consumers know that they are involved in these activities. It lets consumers know that part of the money they are spending is going to a good cause. By getting on the Corporate Responsibility Magazine’s list of “The 100 Best Corporate Citizens” for the 10th time in 2010, it increases the knowledge that people have about their CSR strategy.

Compare the US and International share of yearly revenue, revenue growth, and operating income/revenue. What do these ratios tell you? What is your overall assessment of Starbucks’ financial performance during fiscal years 2005-2009? Explain the performance of Starbucks stock. Exhibit 1 Comparison of Starbucks’ Financial Performance in the US and Internationally| | | 9/27/2009| 9/27/2008| 9/30/2007| 10/1/2006| 10/2/2005| Yearly Revenue ($ millions)| | | | | | | United States| $ 6,572. 10 | $ 6,997. 70 | $ 6,590. 20 | $ 5,495. 20 | $ 4,359. 50 | | International| $ 1,608.

00 | $ 1,774. 20 | $ 1,437. 40 | $ 1,087. 90 | $ 852. 50 | Revenue Growth ($ millions)| | | | | | | United States| -6. 08%| 6. 18%| 19. 93%| 26. 05%| | | International| -9. 37%| 23. 43%| 32. 13%| 27. 61%| | Operating Income/Revenue ($ millions)| | | | | | | United States| $ 531. 80 | $ 454. 20 | $ 1,005. 20 | $ 955. 20 | $ 818. 50 | | International | $ 92. 90 | $ 110. 00 | $ 137. 70 | $ 108. 50 | $ 82. 30 | These ratios tell us that overall they have been increasing their revenue growth by significant percentages of an average of 20% internationally and 12% domestically.

Domestically the amount of revenue growth per year slowed down in 2008 and went negative in 2009. Revenue growth also went negative in 2008 internationally. This makes sense because 2008 was the beginning of the economic downturn which affected the company’s bottom line. Operating income has fluctuated quite a bit since 2005 and since its peak in 2007 ($1,0005. 20 million) has decreased significantly to $531. 80 million. Internationally it has remained steadier at an average of $106. 28 million.

Again these numbers make sense because it was in 2008-2009 that the economic downturn occurred and Schultz instituted strategic initiatives and revamped strategy execution efforts to fix these financial problems. One reason that the economic downturn affected Starbucks’ bottom line badly is because it was considered a treat to go to Starbucks and to get coffee that wasn’t brewed at the home. Less people were indulging in coffee by the cup. In 2006 and 2007 Starbucks reached its peak growth in the period displayed in exhibit 1. This is represented in the stock chart because it is also when their stock performance reached its peak at 40.

The lowest point on the stock chart was in 2008 which makes sense because this is when the economic downturn occurred so many people were selling stocks. In 2008-2009 Schultz’s measures to institute strategic initiatives and revamp strategy execution efforts began and clearly worked because in the period of time from 2008-2010 stocks returned to almost 30. What are the key elements and your evaluation of Howard Schultz’s transformation agenda for Starbucks during 2008-2010? What do you think of the letters shown on page C-364 and C-365? Has Schultz done a good job since his return as Starbucks’ CEO?

Why or why not? Elements of the Transformation Agenda Howard Schultz’s transformation agenda during 2008-2010 had several key elements. First, he planned on slowing new store openings to 73 internationally. Second, 900 underperformed company-owned stores were closed in the United States. The goal of this action was to raise sales and traffic at nearby sales. Around 75% of these stores that were considered underperforming were within three miles of an existing store which shows that their strategy of having a Starbucks everywhere was cannibalizing their sales.

The third element of the transformation agenda was raising the projected return on capital requirements for proposed new store locations. This is a way for Schultz to be more particular about new store placement and to have a better chance of making a significant amount of profit and not losing traffic to existing stores. Fourth, he planned on revamping the company’s locations in Australia with a focus on Brisbane, Melbourne, and Sydney as the hub cities. He planned on closing 61 under-performing locations in order to do this.

Fifth, it was important to Schultz that there be an emphasis on developing new store designs in order to promote a refreshed customer experience. In order to do this the character of each store would be a reflection of the area it was in to make the customers feel more at home and to make Starbucks the center of that community. Sixth, customer experience would be heightened through a variety of methods. The first method was by removing warmed sandwiches from the menu, because it inhibited the aroma from the coffee.

Second, high-quality baked goods and pastries would be offered at the store along with new menu items for healthy eating on the go. For example, fruit cups, skinny lattes, yogurt parfaits, salads, smoothies, and healthier bakery selections were all a result of this step in Schultz’s transformation agenda. The seventh part of the agenda was to create a program to share best practices in stores globally, this would promote quality control and improve customer service, which was one of the things that Schultz had found lacking when he became CEO again.

Eighth, Schultz thought it was important to provide resources and tools for store employees such as laptops and internet-based software for scheduling. Ninth, there were cost-containment initiatives put in place in order to improve the bottom line that included a reduction of 1,000 people in staffing. Finally, the last part of the agenda was to renew the attention placed on employee training in order to reignite the enthusiasm to please customers that is vital to the mission of Starbucks.

Evaluation The goal for 40,000 stores worldwide as a long-term objective and the rapid expansion that Jim Donald began led to a decrease in customer traffic in the US stores, new store openings that continued at a rate of 6 per day worldwide, and the emphasis on increased store operations efficiency put financial strain on the company and led to a decrease in customer service. Good customer service is one of the cornerstone values of Starbucks and was a central idea during Schultz’ leadership.

Schultz’ return to CEO and his strategic initiatives mentioned above will help to return Starbucks to the values it originally held as very important and to return it to profitability by slowing down on expansion to focus more on the three main themes Schultz saw as important to his strategy. These themes are: strengthening the core, elevating the experience, and investing and growing. Before he can focus on growing the company, they need to have a strong base of employees and a focus on the experience that Starbucks is meant to provide its consumers.

Letters from Schultz The letters that are shown on page C-364 and C-365 of the case show that Schultz is dedicated to his shareholders, which is one of the values in their mission statement. He is being extremely open and upfront the concerns of shareholders and about the actions that will be taken to address those issues. The first letter is addressed to customers and he explains that he has come back to Starbucks as CEO in order to ensure that the customers receive the experience that he believes Starbucks is known for.

This letter shows that he truly cares about the thoughts and concerns of consumers. The second letter is to the employees of Starbucks. In this letter Schultz addresses them as partners in the path to revitalizing Starbucks’ mission. He even says, “I am proud to be your partner…” By treating his employees like this he is able to foster accountability for the actions that everybody can take in helping to turn around Starbucks to what Schultz’ vision for it is. Evaluation of Schultz’ work.

Schultz has done a good job by creating strategic initiatives in order to return Starbucks to where he thinks the company should be. His vision includes becoming the authority on coffee, engaging and inspiring Starbucks’ partners, igniting the emotional attachment with customers, expanding global presence and making each store the neighborhood’s heart, being a leader in ethical sourcing and environmental impact, creating innovative growth platforms, and delivering a sustainable economic model.

Every one of these visions is addressed in some way in his agenda, which shows he has a clear idea of where the company should go and how to get it there. In 2008-2009 the company experiences five quarters of deteriorating sales, but from 2009-2010 had five quarters of improving sales, which shows that Schultz’ transformation agenda has been working. What issues confront the company as of mid-2010? What should Starbucks’ management be worried about? What are the challenges in expanding internationally? Issues as of mid-2010.

1) Oversaturation of the market: With the “A Starbucks Everywhere” approach and the rapid expansion steps taken by Donald, there was a decrease in customer traffic at the stores, resulting in a loss of profit. 2) Lack of emphasis on customer relationships: The emphasis on increased efficiency in store operations led to a decrease in good customer service. 3) Drifting away from the original values of Starbucks: Starbucks was built with an emphasis on high-quality coffee, good customer service, and a commitment to creating an experience for customers.

However, when Schultz became CEO again he noted that this was lacking. 4) Offering high-quality products: As Starbucks moves into new locations in order to draw attention away from local popular spots they will need to offer a product that is of high enough quality to keep consumers coming back. 5) Differentiation: Again, as they move into new markets they will need to do significant research to find out what those consumer’s value. They need to be able to give it to them in order to achieve their goal of being the heart of the neighborhood.

6) Coffee prices: Coffee prices fluctuate significantly due to weather, economic, and political conditions in the countries where they are grown. What should management be worried about? Management should be worried about offering high-quality products. If they cannot prove that their product is better due to quality or differentiating features then locations that sell coffee and consumers are already loyal, they will have issues drawing consumers away.

However, Starbucks does have an extremely strong brand image and hype associated with their name, which is an asset for them in entering new markets. International Challenges Some challenges that Starbucks will face internationally are: 1) Adapting their stores to fit the location they are in 2) Creating partnerships and licensing agreements with reputable companies to offer their products abroad 3) Regulations on foreign businesses moving into their country 4) Having enough control over the quality in the international stores that are licensed.

5) Higher production costs Starbucks has chosen to follow a multi-domestic approach to international expansion, meaning that they customize their product offerings to match the tastes and preferences of local buyers. The main challenge that Starbucks will face in entering international markets is knowing what that group of people wants and prefers. Another problem is that they will need to make partnerships and licensing agreements with reputable companies in order to be sure that the culture of Starbucks is continued to their new stores.

Finally, they will have the issue with tailoring their stores to fit the environment they are in, because they will be unable to use a set design which could raise production costs. What recommendation would you make to Howard Schultz to sustain the company’s growth and support continued strong financial performance in the years ahead? Consider both the US and International strategies. Recommendations * Coordinate with suppliers to address consumers’ needs better: By coordinating with the farmers and growers they source their beans from they will be able to add value to their product.

The Coffee Crisis Essay

The Coffee Crisis Essay

Introduction In 2011, Diego Comin, Associate Professor of Business Administration at Harvard Business School, revised his 2009 case study on the Great Moderation (reproduced by permission for Capella University, 2011). The case explores whether or not the Great Moderation, defined by investopedia. com as “the period of decreased macroeconomic volatility experienced in the United States since the 1980’s [during which] the standard deviation of quarterly real GDP declined by half, and the standard deviation of inflation declined by two-thirds (para.1)” is still in effect.

This paper will use evidence from research in a draft by Pancrazi and Vukotic (2011) that proposes “macroeconomic variables in the last thirty years have not only experienced a reduction in their overall volatility, but also an increase in their persistence (p. 2). ” The 2011 research paper also purports that “by using a New-Keynesian macroeconomic model… the responsiveness of output variance to changes in the monetary policy decreases with an increase in the persistence of technology (p. 2). ”

The result, according to Pancrazi and Vukotic, is an “overestimate” of the monetary influence and authority to “smooth out the real economic dynamics (p.

2). ” The Great Moderation and the The Great Recession. Comin, in “The Great Moderation, Dead or Alive? ” (Capella, 2011), quotes Ben Bernanke, Chairman of the Federal Reserve: “reduced macroeconomic volatility has numerous benefits. Lower volatility of inflation improves market functioning, makes economic planning easier, and reduces the resources devoted to hedging inflation risks.

Lower volatility of output tends to imply more stable employment and a reduction in the extent of economic uncertainty confronting households and firms. The reduction in the volatility of output is also closely associated with the fact that recessions have become less frequent and less severe (p. 17). ” Comin points out that these conditions existed until the Great Recession of 2007 when the U. S. and other countries experienced the longest period of recession and “ the largest GDP contraction in the U. S. since the Great Depression (p. 17).

” In “Overlooking the Great Moderation, Consequences for the Monetary Policy” (2011), the researchers hypothesize that the “Great Moderation might have been fertile ground for the recent recession (p. 3), in that technology caused an “increased persistence in the macroeconomic variables (p. 4). ” Macroeconomic Observations. To summarize Comin’s (2011) account of macroeconomic activity in the U. S between 1930 and 2010, when observing the GDP during this period, he says, “it is clear that since around 1984 it has been harder to observe large deviations from the average growth rate (p.17). ”

When examining other macroeconomic variables, Comin says that hours worked, consumption, investment, labor productivity, and total factor productivity (TFP), have, for the most part, “experienced stabilization by roughly the same magnitude, [where] the stock market has not stabilized significantly. If anything, it has become more volatile over the last few decades (p. 18). ”

Pancrazi and Vukotic focus their research on “studying the behavior of the total factor productivity (TFP) before and after the Great Moderation (p.4)…[by] using a basic New-Keynesian model featuring imperfect completion and price stickiness, [to ascertain] whether a change in the persistence of TFP affects the responsiveness of the real variables to the monetary policy (p. 6). ” Their observations include an examination of the stability of TFP and an assessment that “a higher Microeconomic impact of the coffee crisis. The case study conveys that “coffee was the main source of income for roughly 25 million farmers, mostly small land holders, in Latin America, Africa, and Asia (p.1). ”

The coffee crisis created immense hardship for these small producers; “in some countries, farmers had been forced to take their children out of school and put them to work (p. 1). ” One of the consequences of the coffee crisis that was less publicized was how larger farms and their workers were devastated. Large farms generally do not use non-cash family workers, like many of the smaller farmers do; as a result of the crisis, many workers were laid off, subsequently putting larger farms completely out of business.

(Price, 2003) Where some producers chose to get out of the coffee business and venture into unknown territory with a new crop, others either attempted to break into the coffee “niche” market or decrease their outputs. (Line & Tickell, 2003) In the ICO report on the impact the coffee crisis has had on poverty, the socio-economic impact reported by the respondent countries is filled with narratives that describe families and farmers who worked in the coffee industry unable to pay for medicine, food, and other essentials.

Families are also reported to have migrated to cities, where there is typically no work for skilled farmers; some countries report that workers have migrated leaving their families behind. (Osorio, 2003) Solutions for long term sustainability. The case study presents an outline of solutions recommended by the ICO, Technoserve (as reported to the Inter-American Development Bank) and Oxfam. “The Coffee Crisis” states that, according to Oxfam, “the long run solution…was a commitment to ‘fair trade’… a system in which a buyer in the first world agrees to pay third-world producers enough to support a decent living (p.5). ”

Oxfam says that “the fair trade movement was designed to provide an assured income and other benefits to the farmers associated with it (Line & Tickell, 2003, p. 8). ” Technoserve believes the following “three areas offer the highest potential for sustainable impact: 1. Increasing coffee consumption in producer countries and emerging market countries; 2. Assisting unprofitable producers of high-quality Arabica to move into higher-priced “specialty” coffees; and 3.

Helping regions with a high concentration of “marginal” coffee producers — who cannot differentiate their product or compete on price — to diversify into other products and industries (para. 15 &16). ” In June, 2004, Nestor Osorio of the ICO presented to the United Nations Conference on Trade and Development (UNCTAD) a report titled: “Lessons Learned from the Coffee Crisis: A Serious Problem for Sustainable Development. ” In it he outlines the economic strategies he believed would prevent a future crisis and assist coffee producer toward long-term sustainability.

Two proposed policies address the supply-demand problem: 1. To use the experience of the coffee crisis to create awareness – best achieved through the ICO – in national and international bodies of the danger of embarking on any projects or programmes (sic) which will further increase supply; and 2. Working to increase the benefits accruing from value-added products rather than traditional bulk commodity exports. Osorio recognizes the importance of “the need for market development to increase demand (p. 5)” also.

He says that projects intended to benefit the supply chain should include actions from farmer to consumer, as well as farmer to exporter. These include: 1. “Support for the ICO’s Quality-Improvement Programme as a means of improving consumer appreciation and consumption of coffee; 2. Action to increase consumption in coffee-producing countries themselves, which should have a number of positive effects such as providing an alternative market outlet, increasing producer awareness of consumer preferences, stimulation of small and medium enterprises, etc. as well as acting to increase demand;

3. Action to enhance knowledge and appreciation of coffee in large emerging markets such as Russia and China, following the successful ICO campaigns in the 1990s; and 4. Protecting consumption levels in traditional markets through quality maintenance, development of niche markets and dissemination of positive information on the health benefits of coffee consumption. (p. 5-6). ” Conclusion The coffee market has been described as an “imperfect market; a market that in recent years has failed – both in human and economic terms (Lines & Tickell, 2003, p. 8).

” The coffee crisis illuminated the impact the market had on international trade, national economies, businesses and families – many in underdeveloped, low income countries. Because the regions where coffee can be grown are also many times third-world or repressed countries, coffee production is considered a humanitarian concern as well as an economic issue.

Where an organization like Technoserve may lean toward business partnership solutions for the coffee industry, and Oxfam may concentrate on the humanitarian perspective, the International Coffee Organization appears to have taken a balanced approach in presenting the plight of coffee producers from both altruistic and economic perspectives.

Where it is understood that many depressed areas and nations depend on coffee crops for sustenance, the ICO has taken a stand that the lessons learned from the coffee crisis must be solved with the tenets of economics, coupled with social responsibility, if families, farms, businesses and coffee-producing nations are going to achieve long-term sustainability. References Capella University. (Eds. ). (2011). MBA6008: Global Economic Environment.

New York, NY: McGraw-Hill. Lines, T. , & Tickell, S. (2003, May 1). Walk the Talk, Oxfam International Briefing Paper, May, 2003. Oxfam International | Working together to find lasting solutions to poverty and injustice.

Retrieved May 5, 2012, from www. oxfam. org/sites/www. oxfam. org/files/walk. pdf Osorio, N. (2002). ICO. org Documents/Global Crisis. International Coffee Organization. Retrieved May 4, 2012, from dev. ico. org/documents/globalcrisise. pdf Osorio, N. (2003). ICO. org Documents/G-8.

International Coffee Organization. Retrieved May 4, 2012, from dev. ico. org/documents/g8e. pdf Osorio, N. (2004). ICO. org Documents/UNCTAD. International Coffee Organization.

Retrieved May 4, 2012, from dev. ico. org/documents/UNCTAD. pdf Prince, M. (2003, December 3). CoffeeGeek – Coffee Crisis:TechnoServe Releases Fact-Based Industry Analysis. CoffeeGeek – News, Reviews, Opinion and Community for Coffee and Espresso. Retrieved May 5, 2012, from http://coffeegeek. com/resources/pressreleases/technoservedec42003.

Coffee Drinking Habits Essay

Coffee Drinking Habits Essay

Kantar Media’s Global TGI research (www. globaltgi. com) has explored coffee consumption in different countries, as branches of global coffee house chains become a permanent fixture in even the most far-flung corners of the world. Perhaps surprisingly for a nation once renowned for its tea-drinking, consumers in Great Britain are some of the most likely to visit a cafe for their caffeine fix, report researchers. They share this position with Italians and, among the eight countries analysed, are beaten only by people in Israel, where 75% of respondents visit coffee shops, reports Kantar.

The research also reveals the ongoing debate as to the virtues of instant versus filter coffee is alive and well. Whereas 86% of Italians drink ‘proper’ coffee, only 6% of them will consider using instant. Israelis are the highest consumers of instant coffee at 80%, followed by Russians at 72%. Great Britain and Turkey scored low on the ground coffee scale, with 19% and 15% respectively. This research confirms in GB people tend to go to coffee shops for the ‘real deal’ and are generally content with instant coffee at home, said Kantar.

Drinking coffee, whether at home or in a cafe, instant or filter, is a global pastime,” said Tracy Allnutt, head of commercial development at Global TGI. “Global TGI provides brand owners with a flavour for how their marketing strategies should differ by country in order that they reflect the needs of the target market. ” The research is the first in a series of ‘Factoids’ produced by Kantar Media’s Global TGI. Scheduled bi-monthly and covering topical issues, they will provide bite-size pieces of information for brand managers in between the more in-depth Dispatches reports undertaken by the company.