Expert answer:Business implementation plan in 5 parts.
Solved by verified expert:Starbucks introducing protein shakes in all of its location across the world is the business Idea. there are 5 milestones due, also attached is the summary of the business plan.
business_plan.docx
milestone_1_guidelines_and_rubric.pdf
milestone_2_guidelines_and_rubric.pdf
milestone_3_guidelines_and_rubric.pdf
milestone_4_guidelines_and_rubric.pdf
milestone_5_guidelines_and_rubric.pdf
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Executive summary.
Starbucks mission statement reads “to inspire and nurture the human spirit- one person,
one cup, and one neighborhood at a time” (Starbucks, 2017). Unlike most other companies, and
more so amongst the multinational corporations, Starbucks Coffee has a mission statement that
least defines its operations or relevance to the coffee industry. Although Starbucks mission
statement fails to elaborately mention the customers, the market, and the products, it has an
indication that the company bases its philosophy around the unity of its customers.
Unfortunately, it also fails to spell out the market, which is one of the key components of a
mission statement as a brief definition of a company and its operations. In its mission statement,
Starbucks indicates that the nurturing of the human spirit through its products is one of the key
focus areas for the company. Despite the failure to address a few business areas, the mission
statement stresses the importance of the customers and the need to supply the customers with
quality products. This is indicated in the “one person, one cup” principle as per the company’s
statement.
The above mission statement is a remodeling of the previous vision statement by the
company and that read “to establish Starbucks as the most recognized and respected brand in the
world and become a national company with values and guiding principles that employees could
be proud of” (Starbucks, 2008). Notably, the vision statement stressed on the growth
expectations of the company by becoming “the most recognized and respected” coffee brand in
the market. This statement integrated the importance of both the customers and the employees in
one by insisting on the pride that would accompany the employees upon the growth of the
business and satisfaction among that the people that they serve.
In order to further advance these statements, Starbucks should incorporate healthier diets
in its foods and drinks. Notably, healthy diets in the United States, as well as the global level, is
one of the primary concerns among the public. For instance, Coulston, Boushey & Ferruzzi,
(2013) note unhealthy foods and those that have a poor balance between the different nutrients
are responsible for major health issues such as diabetes, heart diseases, and obesity, among
others. In addition to creating raising the living costs among the people, these health challenges
may also be a put off especially when there is widespread news on adherence failure amongst the
customers of a particular business. This mainly occurs in foods and beverages companies where
only a few people understand the content proportions of a particular product especially since they
are not well defined while being served unlike in industrial products.
These statements are significant in the use of healthy foods in revenue generation.
Notably, healthy foods are a subset of the quality in foods and beverages companies. In this case,
Starbucks should consider introducing protein shakes in all of its location across the world.
Notably, the best way to get proteins required in our diets is by consuming solid foods rich in
proteins. However, it is not always easy to acquire all the required proteins by consuming solids
especially among individuals having full time jobs and lack time to prepare their own meals
(Bodybuilding.com, 2017). By adopting protein shakes in its menu, the company would be
further advancing its mission of nurturing the human spirit by ensuring their health well-being is
observed in addition to their needs. The “one cup, one neighborhood” indicates cohesion and
togetherness among the people. In this case, togetherness among the people would not be
possible in poor health.
Context
Starbucks brews and sells a wide assortment of coffee brands (Cooke, 2016). By so
doing, the company is able to differentiate its products, increase the product portfolio, and
enhance the available choices. The company also sells other products like milk products and
snacks. This differentiation is necessary to cover a wide range of customer needs and thus create
an all-inclusive environment and customer satisfaction, which are necessary for increasing the
number of customers and the covered customer niches. However, one area that is little covered is
the healthy products section within the company’s operations. Notably, there is an increase in the
number of customers seeking healthy products and those that address their different health needs
as well as enabling them to maintain their health. In this case, the number of people suffering
from diet-related health issues like blood sugar and blood pressure is on the increase (Coulston,
Boushey & Ferruzzi, 2013). On the same note, campaigns to sensitize the community on the
need to adopt healthy living standards are on the increase and this is raising the demand for these
products. In order to increase the satisfaction of the customers and address these new needs,
Starbucks needs to incorporate protein shakes in its menu. Proteins have been scientifically
proven to enhance muscle production. In addition, they are used to manufacture cellular
messengers, hormones, enzymes, nucleic acids and boost immunity among individuals.
Availability of adequate proteins in our bodies ensures that our bodies can are able to put
together structures that create every organ, tissue, and cells. In addition, proteins enable our
bodies to produce biochemical substances required for muscle contraction, cardiovascular
function, healing, and growth (Bodybuilding.com, 2017).
Most of the Starbucks rivals in the United States mainly offer fast foods and high calorie
drinks. Inclusion of healthy drinks such as protein shakes in its menu would give Starbucks a
competitive advantage over its closest rivals by attracting new customers who are diet conscious.
•
Marketing
In order to increase the popularity of protein shakes in the United States as well as other
outlets across the world and also ensure that they are marketable, Starbucks will need to
advertise this product. One of the most significant areas that it can use to advertise protein shakes
is through the internal environments that majorly constitute the in-store adverts. According to
Percy (2016), this is one of the most successful approaches towards advertising consumer goods
such as foods and drinks. Further, this is one of the cheapest methods of advertising. This is
because the advert addresses the specific target market and thus can be crafted to match the
needs of the target group. In this case, advertising through posters and inclusion of the products
in the menus would be highly efficient.
Starbucks has other alternatives for internal environment other than posters within its
outlets. One notable platform is the company’s app. In fact, this app is highly popular among the
company’s customers and has been used previously in delivering particular content to the
customers (Behar, 2011). In this case, the Starbucks would use the app to advertise the inclusion
of protein shakes in its menu as well as its availability. The company may also include a small
description of health benefits associated with the consumption of protein shakes. The product can
further be popularized by the inclusion of discounts for a duration of time, say a year, after their
introduction. Although the company has an assortment of foods and drink products already
available in its outlets, this phase would be a thorough introduction of a large number of
available options to solve the available concerns such as the calories, caffeine, and fat content of
the current products. Consequently, this would create a sense of loyalty and care among its
customers and result in increased sales.
The company would also benefit heavily from the use of social media. Many people
access social media platforms every day. This would make it easier for the company to reach
many people in various geographic locations within a short time. Notably, it makes extensive use
of Twitter and, in a number of past occasions; the platform has been used during the launching of
products so as to cover a wider number of customers and potential customers (Reinhard, 2016).
An approach such as that previously used on free gifts and discount cards for friends upon one’s
referral of the product would work well for these products in not only reaching a wider number
of people but also increasing sales of the particular products as these people seek to redeem their
discount offers and gifts. This would be highly boosted by the use of mainstream media such as
banners and adverts on television and other mainstream advertising agencies.
•
Differentiation
Even with the introduction of the protein shakes in its menu, the company will need to
differentiate them from the competitors in order to achieve uniqueness and popularity while
locking out competition. One of the available ways of differentiation is personalization and
customization of the products as per the customers’ needs. In this case, the company will need to
create a wide variety of protein shakes for the customers to choose from and that will be
prepared to match their tastes. Notably, Starbucks should include egg protein shakes, whey
protein shakes, and casein protein shakes for individuals who like animal proteins. However,
there are individuals who either dislike or allergic to animal proteins such as vegetarians.
Consequently, the company should introduce soy protein shakes that are exclusively prepared
from soy beans (Women Trib, 2017). Nonetheless, this will first need the provision of samples
for some time so as to ensure that the customers are acquainted with the new products, their
tastes, and their composition. The company would also need to adopt a different pricing policy
so as to create a difference between its products and that of its competitors. In any way, Reinhard
(2016) notes that having two different pricing policies while maintaining similar quality and
quantity of a product between two competitors will likely win for the company with the lower
pricing policy.
•
Alignment to pricing with market position and corporate mission
In the company’s mission statement, one of the basic targets is the maintenance and
advancement of quality with regard to the customer needs. In this case, the company’s mission
statement obliges it to maintain high quality healthy products. Coupled with the suggested
customization, this approach will likely be accompanied by a demand for the high production
cost of the healthy products and thus a higher selling price. However, the slightly higher price of
these products in relation to the other products will still be tenable considering their addressing
of the customer needs. In line with the market position of Starbucks, and in addition to the
suggested differentiation of products, the company will have different tastes and product types
that will have different pricing. As such, it is expected that these will help in achieving a wider
market.
These approaches towards the healthy products would be highly effective. The
satisfaction of customers’ needs is one of the virtues that govern Starbucks operations, and that
can be achieved through the expansion of available products. Additionally, the pricing policy
would ensure that more customers’ financial aspects are addressed by the company.
Need
The demographics and behavior of the target consumers need to be understood before a
strategy can be formulated. In this case, healthy products will seek to address the various health
concerns among the consumers and the unhealthy population whose needs are not addressed in
the existing products. Diabetes prevalence in the world population has risen from 4.7% to 8.5%
percent with at least 422 million living with diabetes as of 2012 (DeFronzo, 2015). This health
issue resulted in more than 1.5 million deaths in that particular year. On the same note, 39% of
the world population was categorized as overweight, and with 14% of the total population being
obese as of 2014 (Morris & In Lancey, 2015). This is after a significant increase in the
prevalence and particularly during the last two decades. As such, many people are slowly drifting
towards consumer goods that address their health conditions and that do not threaten to increase
their chances of getting further complications. In this case, this is an opportunity for the company
to explore the new market. The inclusion of protein shakes in Starbucks menu will seek to
address both those affected by these conditions as well as the healthy people who seek to
maintain their health by presenting them with an alternative to the available products. Moreover,
everyone has different requirements, and that should guide the products that they consume.
Consumers of healthy products tend to seek the information of the products that suit them
by looking at the product’s label so as to obtain information on the available contents such as
nutrients, fat, and energy content. This means that the company will extensively define these
compositions on the product packaging for the products to be carried away and on the menu for
in-store consumption.
Protein shakes will be purchased at the outlets through the traditional purchasing or the
in-app purchasing methods. In this case, the customers will have two purchasing options: buying
the predefined and readily available products or specifying what they need. Notably, some
customers may prefer to consume protein shakes mixed with vegetables, fruits, and other natural
minerals. Starbucks needs to offer both purchasing options to its customers. This will ensure
convenience on addressing the needs of the customers as well as their preferences.
This is an ideal target market. In fact, statistics show that the demand for healthy products
in both the US and the world are on the increase. This is due to the increased awareness of the
importance of maintaining healthy lifestyles by consuming foods with high nutritional value and
low calories. Less healthy foods such as fast foods and sweet beverages have been associated
with adverse health effects such as hypertension and diabetes.
Strengths and weaknesses
❖ strengths
1. Brand value
Starbucks is recognized worldwide. In fact, its operations are available in more than 70
countries spread throughout the world and covering all the continents. The popularity of the
company has ensured its success in every market that it engages its operations (Behar, 2009).
The company has never closed any of its operations in whichever company as a result of poor
performance. The only instance that the company ever abandoned its operations is its former
Israel outlets that were closed down as a result of the political instability and constant destruction
and vandalism by rioters during the Israel-Palestine conflicts (Bussing-Burks, 2009). However,
all the other operations have been functioning impeccably.
2. Ability to provide free benefits and incentives.
Not only does the company develop and create high-quality and premium coffee products
and services but it also provides the wide number of customers with products that match its years
of experience. The services are excellent, the stores and neat and clean, and the company strives
to maintain a comfortable setting. Starbucks collaborates with a large number of companies to
improve its customer experience and comfort. In this case, the company was among the first to
introduce free wireless internet connections for their customer. Additionally, it frequently
provides offers and gifts to the customers (Bussing-Burks, 2009). Loyal customers also benefit
from the company’s loyalty program that enables them to accumulate redeemable loyalty points.
On another note, the company was also the first in the industry to provide comprehensive health
insurance for all the employees, a model that the majority owner, Schultz, based heavily on his
life experience. The company also has a dedicated application for its employees that simplify the
order placement and payment program, a factor that eliminates the need for queuing and waiting
for a long time before one is served.
3. High financial might and large company size
Starbucks currently possesses more than 46,400, a figure that is subject to rising
drastically in the recent future owing to the current trend and business strategy. Additionally, the
company’s equity stands at more than US$ 5 billion and with an annual net income amounting to
US$ 2.75 billion as of 2016. Unlike most other companies, Starbucks adopts a global perspective
through its establishment in more than 70 countries in all the continents of the world and more
than 238,000 employees as at the end of 2016 (Starbucks Coffee Company, 2017). Currently,
most of Starbuck’s operations and achievements in the coffee industry are unmatched.
4. Extensive global supply chain
Starbucks is a multinational corporation. Its operations are not centralized. Rather, they
are spread across the world. Its supply chain is one of the most complex and effective in ensuring
service delivery and cost management. For example, the company purchases most of its
European coffee in the Netherlands where prices are significantly lower. However, these
purchases are distributed to the other markets such as the UK where operations, on the other
hand, are excellent. In the UK, the taxes on coffee make the product expensive, and the extensive
supply chain enables the company to outsource the raw materials from markets that would save
its costs. After making purchases in various farming economies, Starbucks distributes these
products to all its respective regional markets and individual outlets without relying on
subcontracting services.
❖ weaknesses
1. Imitable product
Coffee, tea, and related products are among the basic consumer products and that are
universal. In this case, Starbucks faces the challenge of product duplication since they are
unified. As a result, the company fails to have a wide variety of unique products in its operations.
According to Fellner (2009), this necessitates competition from both large and small companies
that venture in the same field.
2. Poor market target
Starbucks targets the high and middle-income groups by its premium coffee brands. As a
result, this creates a challenge through the omission of small and working groups that focus on
economy products due to their low economic spending. In this case, the low spenders end up
seeking services and products from the sellers. This is dangerous to the company especially by
the selective nature of the available products.
3. Undiversified services
Starbucks operations focus on the specialization of coffee and coffee products. It relies
primarily on the availability of coffee beans and the popularity of coffee for its operations.
Although the company has on a number of occasions considered expanding its operations and
diversifying its products, these plans ended up being abandoned prematurely. In addition, it has
acquired a large number of companies, and all in the coffee industry and whose operations it
remodeled to suit its business operations and principles. Although specialization is important in
perfecting one’s operations, it also creates a challenge especially when that particular product is
hit by challenges such as diseases and adverse weather that would limit their production.
Inflation of prices on the product would also hit the company hard since loss made from the
coffee industry would not have an alternative for recovery.
4. Higher pricing and price margins
As had been indicated earlier, the company offers premium brands and at equally
premium prices, which is responsible for locking out of the low earners and spenders. As such,
the high prices that the company applies are a turn off to a large number of potential customers.
In addition to the premium produc …
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