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David Hayoun Sarah Holt Emese Kardhordo Erin Mahar Marie Poisson

David Hayoun Sarah Holt Emese Kardhordo Erin Mahar Marie Poisson. AGENDA. Emese Company Background Industry New Approach Marie Problem BMI Benefits of Integrating the Community David Sustaining Innovation Breaking Industry/Company Erin Implementation

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David Hayoun Sarah Holt Emese Kardhordo Erin Mahar Marie Poisson

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  1. David Hayoun Sarah Holt Emese Kardhordo Erin Mahar Marie Poisson

  2. AGENDA • Emese • Company Background • Industry • New Approach • Marie • Problem • BMI • Benefits of Integrating the Community • David • Sustaining Innovation • Breaking Industry/Company • Erin • Implementation • Breaking the risk-return ratio • Sarah • Challenges • Risk • Fallout

  3. COMPANY BACKGROUND • 1977 Seattle, WA • 18,600 stores/60 countries • Largest coffee house chain in the world • Founders – Jerry Baldwin, Zev Siegel, Gordon Bowker • President & CEO – Howard Schultz (1981)

  4. THE COMPANY • Competitive Advantage • “The Starbucks Experience” (consistency) • Core Competencies • Customer Service • Continuous Product Involvement • Strategic Assets • Market Share

  5. COFFEE INDUSTRY • #1 in coffee shop market share • Competitors: Dunkin Brands • #3 in coffee production • Competitors: The J.M. Smucker Company, Kraft Foods, Green Mountain Coffee, Nestle

  6. NEW APPROACH • “It is no longer enough to serve customers, employees and shareholders. As corporate citizens of the world, it is our responsibility to serve the communities where we do business by helping to improve the quality of citizen’s education, employment, health care, safety, and overall daily life, plus future prospects” (Forbes, 2011). Howard Schultz

  7. Evolution FreshSeattle, WA

  8. PROBLEM • Gap in their Business Model • Concentration on the food being sold • Goal is to surge sales of the food

  9. BUSINESS MODEL INNOVATION • Integrating the community into local Starbucks locations by introducing local cuisine into the hot food line • Healthy, fresh, nutritious, easily accessible, and on-the-go options • Choosing suppliers

  10. BENEFITS OF INTEGRATING THE COMMUNITY • Make meaning • Increase the community of co-developers • Overcome limiting beliefs • Experimenting the firm

  11. SUSTAINING or DISRUPTIVE INNOVATION?

  12. BREAKING INDUSTRY/COMPANY DOGMAS • Industry dogmas • Fast = unhealthy • Food and smell • Company dogmas • Consistency • Corporate

  13. IMPLEMENTATION 1. Point of entry • Boulder, CO • Yakima, WA 2. Finding local suppliers 3. Experiments • Success rate • If suppliers like it • If customers like it • How much to purchase/day 4. Purchasing plan • Rate of purchase and re-sell • How much to purchase

  14. BREAKING THE RISK RETURN RATIO • Becoming part of the community • Supports Mission Statement • Adds meaning/Betters brand name • Increase number of sales • Convenience • Increased quality of food • Attraction of a new customer base • Increase in Operating Income

  15. ∆ IN OPERATING INCOME

  16. CHALLENGES • Purchasing • Research local suppliers & develop relationships • Purchasing agreements • Barriers to entry • Finding the willing and suitable suppliers

  17. RISK

  18. FALLOUT • Ordering incorrect amount • Orders need to be sold the same day • Products are not successful • Food poisoning

  19. Conclusion • We will be introducing local hot foods to Starbucks in small to mid-sized cities • The material presented is an experiment, it can be scaled upwards

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