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作业问题-中国有句俗语“当有威胁时，也有机会”，这意味着几乎所有行业都有战略机遇，包括衰退的行业。如果你同意这样的观点，就用说明性的例子来讨论。
1. ESSAY QUESTION - CHINESE HAS A SAYING “WHEN THERE ARE THREATS, THERE ARE ALSO OPPORTUNITIES” WHICH SUGGESTS STRATEGIC OPPORTUNITIES ARE AVAILABLE IN ALMOST ANY INDUSTRY, INCLUDING DECLINING ONES. DISCUSS WITH ILLUSTRATIVE EXAMPLES IF YOU AGREE WITH SUCH A VIEW.
SWOT分析通常用于战略规划。“S”和“W”是指“优势”和“劣势”，主要关注公司的内部环境。另一方面，“O”和“T”指的是“机遇”和“威胁”，它们关注外部环境。外部环境趋势分为两大类：一类代表威胁，另一类代表机遇。威胁是指环境中不利的发展趋势所带来的挑战，如果不采取果断的战略行动，将削弱公司的竞争地位。机会是一个对公司行为有吸引力的领域，公司在这方面具有竞争优势，在外部环境扫描中，通过采用有害生物分析（政治、经济、社会和技术），公司可以识别业务的“全局”。SS环境容易，包括威胁，从而创造机会。下面两个例子将用来解释如何利用机会克服威胁的想法。
SWOT analysis usually uses in strategy planning. “S” and “W” mean “Strength” and “Weakness” which are mainly focusing on the company's internal environment. On the other hand, “O” and “T” mean “Opportunities” and “Threats” which focus on the external environment. External environmental trends fall into two broad categories:One represents the threat, the otherrepresents the opportunity. The threat refers to the challenge posed by an unfavorable development trend in the environment, which will weaken the competitive position of the company if we does not take decisive strategic actions. The opportunity is an area that is attractive to the company's behavior, where the company will have a competitive advantage.During the external environment scanning, by adopting PEST analysis (political, economic, social and technology), companies can identify the “whole picture” of the business environment easily, including threats and thus to create opportunities. The below two examples will be used to explain the idea on how to overcome threats with opportunities.
Example 1: 例子
传统的有偿报业近10年来正处于落日状态，主要是由于2000年初以来免费发行日报。免费日报不仅分布在一些固定的地点，而且可以在线获取。这改变了报纸阅读的趋势，使得传统的报业有偿销售逐年下降。
根据年度报告，香港最受欢迎的本地报纸每天的销售平均额（每天由Next Digital Limes，0282。香港出版的报纸）从2009-10日的302673份减少到2016－17份的130230份。另一份受欢迎的香港本地报纸《东方日报》（东方报业集团有限公司，0018。香港）的一份报纸上，报纸出版业的收入从2009-10年的HK15834 41000下降到2016－17年间的1082500万。The traditional paid newspaper industry is sun setting in the recent 10 years mainly due to the distribution of free daily newspapers since early 2000. Free daily newspapers are not only distributed in some fixed locations, but also available online. This changes the trend of reading newspapers and makes the sales of traditional paid newspaper industry declining years by years.
According to the annual reports, the sales average per day of the most popular local newspaper in Hong Kong - Apply Daily (one of the newspapers published by Next Digital Limited, 0282.HK) decreased from 302,673 copies per day in 2009-10 to 130,230 copies in 2016-17. For another popular Hong Kong local newspaper - Oriental Daily News (one of the newspapers published by Oriental Press Group Limited, 0018.HK), the revenue on newspapers publishing is declining from HKD1,583,441,000 in 2009-10 to HKD1,082,500,000 in 2016-17.
However, on one hand, the depressed market conditions and the property cooling measures taken by the government also have negative affects to the advertising revenue of the local traditional paid newspaper industry, especially the revenue on the properties advertisements.
To analyze the external environment of traditional paid newspaper industry by using PEST analysis, the political environment (P) affects the property transaction rates due to the property cooling measures announced by the Hong Kong government and brings negative impacts on the advertising revenue of the traditional paid newspaper industry. For the economic (E), the depressed market conditions decrease the sales of newspaper and related magazine. The traditional paid newspaper has shrunk completely, and the circulation of paper media has dropped sharply, which leads to people losing confidence in the newspaper. Most newspaper groups are turning to the Internet, and some are starting to distribute free newspapers. The social culture (S) of reading local traditional paid newspaper was affected by the delivery of free daily newspapers. The emergence of free newspapers has brought a strong impact on the traditional newspapers, and many paid newspaper groups have launched free newspapers one after another. While paid newspaper sales have fallen, free newspapers have retained a large number of readers.The trends on reading newspapers were affected by the Technology development (T). An e-reader is a device dedicated to displaying digital versions of written material from books, magazines, newspapers and other print sources.Some e-readers also provide access to e-documents such as blogs, websites, news feeds, etc.In most cases, devices with other major functions, such as netbooks and cellphones, are also used as e-readers.The emergence of e-readers also brings a strong impact on the traditional paid newspaper industry.
In order to turn the threats into opportunities, traditional paid newspaper publishers applied different strategies to tackle and turn into opportunity. For example, Oriental Press Group Limited has set up two 24-hours online television channels in order to draw people’s attention back on traditional newspapers publishers. The two 24-hours online television channels are “Ontv” and “Money 18”. “Ontv” is a 24-hours online television channel which provides real time news and produces different kinds of programmes around some specific topics. It also invites KOLs (Key opinion leaders) to share lots of hop topics to pop up the viewing rates. “Money 18” provides 24-hours financial news and real time stock quote.Next Digital Limited did similar online platform to raise people’s attention to the productions of traditional newspapers publishers. “Apple Action News” is the online platform created by the Next Digital Limited for reporting real time news.
These changes successfully help Oriental Daily News to overcome threats with opportunities. Free daily newspapers and Technology development seems to be big threats for the traditional paid newspaper industry. However, the publishers take use of free E-channels to increase their revenue. In the annual reports of 2016-17, Oriental Daily News proudly announced that the income from the electronic media increased 40% compare with 2015-16. The online platforms help traditional newspapers publishers to keep consistent revenue while the revenue of traditional newspapers was decreasing.
Sometimes when people step backward and they will see opportunities from threats. The online media has a great success while the traditional paid newspaper industry is sun setting. Most Kwai Chung Limited starts up its business while the traditional paid newspaper industry is sun setting. The company published “Blackpaper Magazine” in 2010. Following Blackpaper Magazine’s great success, Most Kwai Chung Limited published “100 Most Magazine” in 2013.Most Kwai Chung Limited has its online media platform named “TV Most” and successfully attracts young generation which gains approximately 60% of the total revenue of the company.Environmental scanning plays an important role on developing the company strategy. Firstly, it is quite difficult to have a TV license issued by the Government; however, due to the technological progress, video website becomes a new trend which was gradually accepted by more and more people. Secondly, fast-paced life makes people want to get access to latest events easily and conveniently. Therefore TV Most aims to upload sarcastic videos and let people know the latest events in an entertaining way. Furthermore, TV Most also creates advertorial videos and promote the products in a humorous way, which makes the company earn abundant profits.
Example 2: Retail Industry in China
Same as traditional paid newspaper industry in Hong Kong, the retail industry in China also affected by the Technology development. Technology development changes the trend of lots of industry, including the retail industry. People change their shopping habit and tend to shop online instead of visiting a shopping mall or a retail stores. Shopping online is convenience and people can buy things from anywhere. However, it turns to be a threat to traditional retail industry in China. Many big department stores are facing declining on sales due to the competition though online trading. However, this is always opportunities come up with threats.
To analyze the external environment of traditional retail industry in China by using PEST analysis, the political environment (P) is that the China government encourage people to use “internet plus” which push the development of online trading. For the economic (E), the GDP and household income of China are increasing and people are willing to buy more luxury products. The social culture (S) of shopping in a fast and convenience way is a tread. The Technology development makes people tend to shop online instead of shopping in malls and department stores.With the Internet, social networks and big data increasingly empowering consumers, the dominant power of Chinese business has undergone major changes, truly entering the era of consumer sovereignty,. The traditional business-centric and the era of monopoly of commerce by geographical location is gone. A new generation of digital consumers not only has a lot of online migration, but also has been highly empowered by new technologies, and fundamental changes have taken place in consumer behavior and consumer attitudes.#p#分页标题#e#
While facing the same threats, GOME (493.HK) and Parkson (3368.HK), both retail companies aware the changes of consumer behaviors years ago and they used two different strategies to turn threats into business opportunities.
Parkson announced profit warning in 2016. From that time, Parkson was looking for solution to solve the declining on sales by open a new concept store called “Parkson Supermarket” and selling high-quality and imported goods. Parkson also set up “Hogan Bakery” which is selling baked foods from Taiwan.
During environmental scanning, Parkson realized, in China and lots of other countries and regions, online shopping is a historical trend which is encouraged by government. Parkson developed an app for online shopping called “Parkson Plaza”. This strategy copes with the rapidly change in the market. In data marketing, Parkson tries to find more business opportunities from consumers' buying behavior. To strengthen cost control, Parkson takes full advantages of data analysis. Parkson also studies on consumer behaviors. Data analysis shows that the age of the main consumer group tends to be post-85s. For example, the 30-year-old or so women will considercolor cosmetics instead of skin care as the main consumption, so Parkson enhanced the sales of color cosmetics. It also found the result in the analysis of the customers’related purchase and walking route, people who bought cosmetics on the first floor usually went to the ground floor to buy imported fruit. Companies can make relevant marketing recommendations based on data.
However, Gome used different strategies from Parkson thought they are facing the same threats.GOME introduces “GOME ecosystem” to their customers which can offer 24-7 service (service available at any time and every day) for online purchases. GOME also provides new experience to customers by launching a virtual reality (VR) decoration platform which focus on home decoration and furniture experience. Furthermore, GOME offers e-commerce to the customers. Customers can buy products from different countries nearby through internet. GOME upgraded its supply chain which allows a wide range of products available for their customers. They aim at selling new products and providing “one-step-pricing process” which offers overall plans or tips for home renovation for their customers like “smart home” instead of selling individual household products.
In conclude, threats are unavoidable for every industry. However, it’s always true that when there are threats, it always comes with opportunities, even for the declining industries. For the two industries above, if those companies stick with the old strategies, they will finally be obsoleted. While to come over the threats and sometimes can create new business opportunities and let the companies growth again.
2a. USING PORTER’S FIVE FORCES AND MACRO-ENVIRONMENTAL ANALYSIS TO ANALYZE THE SPECIALTY COFFEE CAFE INDUSTRY
Porter’s Five Forces framework describes factors that affect bargaining power of various parties and intensity of competition. (Refer to course material - Topic 2 External Environment and Industry Evolution) Under the logic of the Porter’s Five Forces framework, there are 5 factors, they are “Bargaining Power of Buyers”, “Threat of Substitute Products and Services”, “Intensity of Rivalry”, “Bargaining Power of Complementary Product”, “Bargaining Power of Supplies”, and “Potential Rivals“.
(Refer to course material - Topic 2 External Environment and Industry Evolution)
The Porter’s Five Forces framework can help to analyze different parties which may affects the industrial profitability.
2.a.i. Bargaining Power of Buyers / Customers
In the Porter’s five force model, this force refers to how strong the bargaining power of Buyers is. Bargaining Power of Buyers is high when buyers have powers to high product quality with lower price from industry producers.
In the case of Starbucks, the bargaining powers of buyers are moderate to low. From abundance of competition and choice, Starbucks customers have a high level of price sensitivity in coffee chain industry. In 2012, the emerging markets of unroasted coffee in US were exhibiting strong growth, local specialty coffee competitors like Caribou Coffee and Peet’s Coffee & Tea, quick service restaurant like McDonald’s and world’s leading doughnut chain like Dunkin’s Donut started offering high-quality coffee and the competition was entrenched. Buyers, who share the preference of upscale, convenient food experience in a comfortable environment, could easily switch to another coffee shops and bands without switching costs, by having abundant and detailed information about products and services the coffee shops offered. On the other hand, the distribution networks, such as supermarkets, specialty retailers and grocery store, also have moderate bargaining power. They would negotiate a discount on Starbucks’ coffee and teas if they are not selling well in certain location.As a brand of leisure culture, Starbucks has its own price system, and the price is fixed and inelastic, that’s another reason why customers have low bargaining power.
2.a.ii. Threat of Substitute Products and Services
Substitute means goods and services that can satisfy the same needs but in different way. (Refer to course material - Topic 2 External Environment and Industry Evolution) The threat of substitute products and services is about how easy a product and services be replaced by its substitute.
For the specialty coffee cafe industry, the threat of substitute products and services is quite low. It means that other kinds of drinks, such as tea and Coca-Cola. According to the case of Starbucks, coffee is not only a drink for American nowadays, it is all about quality of life. Starbucks creates “American coffee enthusiasts”. Starbucks tries to ensure they will only use the highest-quality coffee beans and Starbucks breaks the traditional that only Japanese and Europeans will buy and use high-quality coffee beans. Besides the quality of the beans, Starbucks also extremely cares the process of roasting. In the case, it mentions “Roasting is close to an art form at Starbucks”. In Figure 1 of the Starbucks case, Starbucks plays an important role in the specialty coffee cafe industry. Starbucks brings high-quality coffee to the specialty coffee cafe industry makes it not easy to be replaced by its substitute.Besides, tea and soft drink shops lack the global influence of chain store brands. From the point of view of sales location, most of tea and soft drink are sold in supermarkets and stores, while a few are sold in stores. Starbucks through the store atmosphere, theme design, commodity display and so on to create a sufficiently dynamic environment, it can not be replaced. Also, Starbucks increases the range of products, including soy milk, beverages, tea, delicacy snacks, and even customized drinks according to customers’ needs. Starbucks takes advantage of brand advantages to enter the supermarket and launch competitions with tea and soft drinks. It founds joint ventures with ice cream stores, hotels, Pepsi Cola and other companies, and gain excellent sales volume. To sum up, in supermarkets, stores and other retail markets, there is a threat of substitute products, but in the chain store market, the threat of substitute product and service is low.
2.a.iii. Intensity of Rivalry
The intensity of rivalry is really high in the specialty coffee cafe industry. Starbucks case makes a very good example to show how high the intensity of rivalry is in the specialty coffee cafe industry. For Starbucks, there are quite a lot of experienced competitors, such as McDonald’s (McCafe), Caribou Coffee, Peet’s Coffee & Tea and Costa Coffee, just to name a few. The competitive is really high in the specialty coffee cafe industry and there are lots of different choices for the customers. Starbucks well-understand this problem and starts to build brand loyalty. According to the Starbucks case, Starbucks changes its logo and train its staffs to help customers. Staffs in Starbucks even teach their customers on home brewing to create long-term relationship with customers. Adding such service can increase the brand loyalty and can increase the customers’ switching cost. Specifically, Starbucks takes below measures to build brand loyalty. Firstly, Starbucks ensures the customer’s brand loyalty through store design, in-store atmosphere, product design and brand operation. Secondly, Starbucks increases the cost of customer transfer by membership card. If the customer transfers, he/she will not get the reward of Starbucks. Besides, Starbucks forms absolute cost advantage, the supplier system, centralized purchasing, standardized contract, operating level and capital cost of Starbucks all form its absolute cost advantage. All these measures make Starbucks success even though the intensity of rivalry is really high in the specialty coffee cafe industry.
2.a.iv. Importance and availabilityof Complementary Product
The complementary product means goods or services that enhance the value of another product or service and so increase demand. (Refer to course material - Topic 2 External Environment and Industry Evolution) However, Starbucks makes the bargaining power of complementary product higher in the specialty coffee cafe industry. Starbucks understands coffee cannot be treated only as a drink for customers, but also an “experience” or “enjoyment” for customers. Starbucks provides a comfortable environment for customers to enjoy their cup of coffee. Coffee makers of Starbucks are like bartenders and the stores are well lighted with jazz as background music. To enhance the needs of customers, Starbucks also offers light lunch for customers, such as sandwiches, cakes, scones and muffins. Starbucks makes the bargaining power of complementary product higher in the specialty coffee cafe industry by enhancing the needs of customers. Starbucks lets their customers to enjoy their coffee.#p#分页标题#e#
2.a.v. Bargaining Power of Suppliers
The bargaining power of buyers and suppliers are two sides of the same coin. (Refer to course material - Topic 2 External Environment and Industry Evolution) The bargaining power of supplies directly influences the gain or loss of the buyers. In the specialty coffee cafe industry, the bargaining power of suppliers is cost and quality driven. For suppliers who are selling high-quality coffee beans, the bargaining power is relatively high as the specialty coffee cafe industry has to stick on using high-quality coffee beans if they would like to maintain the quality of their coffee. However, on the other hand, if the suppliers are selling low-quality coffee beans, it is totally the competition on the selling price. The lower the selling price of the coffee beans, the more buyers are willing to buy its beans. The bargaining power of suppliers who are selling low-quality coffee beans are low. Nevertheless, some leading cafes in the industry like Starbucks, they purchase a large amount of coffee beans from plenty of suppliers. The large supply and the diversification of supply chain make them having plenty of rooms to exercise coffee bean choices. Therefore, single suppliers do not have much impact on those leading cafes. Starbucks even purchases the entire yield to keep the cost and supply of Narino Supremo bean (one of the high-end coffee beans) stable. In the specialty coffee cafe industry, the bargaining power of suppliers is totally cost and quality driven. In this case, the bargaining power of suppliers is low.Starbucks's main suppliers are coffee bean suppliers and milk suppliers, and the quality of coffee beans is very important for Starbucks coffee. About 50% of the coffee beans come from Latin America, 35% from the Pacific Rim, and 15% from East Africa.Starbucks usually works directly with suppliers and provides training to them, so Starbucks and suppliersalways had a close relationship.Starbucks is an important customer for suppliers.40% of the Starbucks contract is about 3-5 years. Besides, Starbucks works directly with farmers and collaborators so that people living on the fringes of poverty receive income from coffee sales, this not only compensate for the cost of planting but also support their families.Under Starbucks' global sourcing strategy, Starbucks’ suppliers do not have strong bargaining power.
2.a.vi. Potential Rivals - Threat of New Entrants
In the Porter’s five force model, this force determines how easy the potential new players enter the industry. Threat of new entrants is high when the industry is profitable and few barriers to enter.
In the case of Starbucks, the threat of new entrants is moderate as there are numerous entry barriers in coffee chain industry. In the aspect of government control, there is no big barriers.New entrances can serve a coffee or cake pops easily because of the moderate costs of doing business and supply chain development. However, it is difficult for them to develop a strong band and compete against established bands like Starbucks unless they develop unique coffee or products, trends and new business attacking customers and grows exponentially like Starbucks do over 21,100 locations. Starbucks, on the other hand, have established a strong fashionable image and made their coffee as a part of customers’ routine, making it an unattractive market for new entrants. Moreover, economies of scales are barriers for new entrants. Newly entered coffee producers are seriously lacking in cost advantages.With more funding resources and bargaining power with suppliers, Starbucks can negotiate favorable interest rates and have higher profit margins from bringing the cost down compared with new players. Altogether, it is hard for new entrants to make an impact.
This analysis shows that by providing high-quality products and customer services, building brand loyalty and having economies of scales, Starbucks have a competitive advantage in the specialty coffee cafe industry. On the strength of five forces, Starbucks has acquired competencies and has been able to against competitive threats.
2.a.vii. Macro-Environmental Analysis (PESTLE Analysis)
Macro-environmental analysis addresses external factors, namely political, economic, social/cultural, technological, legal and environmental issues linked to the company.
For political factors, Starbucks have the needs of following laws and regulations in the countries. Any price regulations, political stability, tax policy, employment law, environmental regulation, trade restriction and property protection acts have their impacts on Starbucks’s business. For those countries improving infrastructure and promoting regional integration, opportunity is provided for Starbucks to access more markets and suppliers and expand globally. However, for those developing countries persisting bureaucratic, it is difficult for Starbucks to expand its business.
For economic factors, type of economic system, regional economic growth rate, interest rates, discretionary income, local currency exchange rates, taxation level and the inflation rate have major impacts on Starbucks’s profitability, operation and decision making process. Starbucks gain revenues in those developing counties which have high economic growth with low unemployment rate. At the same time, the expense is also increase as another threat due to coffee bean farms’ labour cost increment in the developing countries.
Apart from economic factors, socio-cultural factors play an important role when Starbucks launches a product in global market. Some factors may affect customers need and market size, namely age, population, education, class structure, family pattern, health consciousness, working environment, lifestyle and local culture. For example, Starbucks invests in Italian-style beverage and provides a seductive atmosphere, biscotti on the counter and soft jazz or opera in order to comfort Italian counterparts.
For technological factors, factors like research and development, system automation, technology incentives may influence a business and its products. For Starbucks, it uses new technology and equipment among countries and increases the productivity. Take Innovative technology and Biotechnological developments as examples. Innovation technology allow Starbucks’s customers enjoying the free Wi-Fi at store, apps based discount coupons and mobile payments. Meanwhile, biotechnological developments allow Starbucks diversifying its drink menu by selection of coffee bean combination and flavored coffee.
For legal factors, laws and regulations in markets and origin of raw material affect food and beverage industry. Starbucks should stay alert about health related policies, especially for those caffeine products, and ensure that it does not violate any law and regulation. Apart from health related policies, an introduction of new employment regulation, trade regulation, customs requirement or licensing regulation among counties may also have impact on Starbucks’s business. These external factors give Starbucks opportunities to improve its performance or threaten to enter into local markets respectively.
Lastly, for environmental factors, it identifies the effects of environmental conditions and changes on business. Such trends of business sustainability, environmentally friendly and responsible sourcing emphasizes corporate social responsibility in the supply chain. Yet, Starbucks has enhanced its performance and created responsible sourcing policies like recyclable packaging.
To sum up, this analysis shows the external factors in Starbucks’s macro-environment. Overall, it proves that Starbucks has a quite stable external environment. The analysis indicates that it has plenty of room for further global growth as it presents the opportunities and works to address the identified threats.
2b. KEY SUCCESS FACTORS IN THE SPECIALTY COFFEE CAFE INDUSTRY
To be success in an industry, a company should have its own strategy which can produce competitive advantages and make itself irreplaceable in the industry. Running a business in the specialty coffee cafe industry is just the same, here are some key success factors in the specialty coffee cafe industry:
First of all, to be success in the specialty coffee cafe industry, a cafe should offer high-quality coffee. Coffee is the main product offers in the specialty coffee cafe. In order to win the customers’ hearts and hold a leading position in the specialty coffee cafe industry, a cafe must offers high-quality coffee. Starbucks did a great job on winning customers’ hearts in the specialty coffee cafe industry by offering a cup of high-quality coffee. Coffee beans are the base and the “soul” of a cup of coffee. Starbucks breaks the traditional that only Japanese and Europeans will buy high-quality coffee beans but also American does. Starbucks even roast the coffee beans itself to keep the quality. As mentioned in the Starbucks case, “roasting is close to an art form at Starbucks.” It shows how serious Starbucks is on producing a cup of coffee and it takes Starbucks to the leading position in the specialty coffee cafe industry. A cup of high-quality coffee with irreplaceable taste is obviously a key success factor in the specialty coffee cafe industry.
Secondly, building long-term relationship with customers is also one of the key factors to success in specialty coffee cafe industry. Develop and maintain good relationship with customers is increasing the brand loyalty of the customers. Not only the coffee should hit the taste of the customers, but also let the customers to enjoy the cup of coffee. As a leading specialty coffee cafe in the industry, Starbucks’s objective is to create long-term relationship with customers. Starbucks builds good relationship with customers through its employees. Starbucks’s employees are well-trained to help customer on trailer made their own “coffee experience”. Building long-term relationship with customers helps to get higher brand loyalty from customers and to lead a cafe to the road of success in the industry.#p#分页标题#e#
Thirdly, high employee loyalty is also a key factor to success in specialty coffee cafe industry. Employees are the asset of a company under the accounting theory. Employees help on every day operation of the cafe, their working attitude directly impact the impression given to the customers and also affect the company’s image. In 1991, Schlesinger and Heskett added employee loyalty to the basic customer loyalty model, and developed the concept of “cycle of success”. That is, a virtuous circle could be got if the company invests in their employees’ ability to provide superior service to customers. Starbucks understands well on how important the low employee turnover is. In the Starbuck case, it mentioned “Schultz believes that happy employees are the key competiveness and growth.” Starbucks offers the industry-leading benefits packages to the employees, even those part-timers. Starbucks believes “If we treat them (employees) right, we feel they will treat (the customers) well.” Starbucks also trust their employees by giving them freedoms on making decision and Starbucks will stand behind their staffs. Undoubtedly, high employee loyalty leads to low employees turnover and benefits the business in long run. It is a key factor to success in specialty coffee cafe industry.
Furthermore, brand building is one of the strategies to success in specialty coffee cafe industry. The brand building assignment including the design of logo, the works on corporate social responsibility (CSR) help on distinguishes a cafe from others in the industry. Building a good and modern image may attack more customers. Starbucks evolved its logo for building a modern image for the company. Starbucks also work on lots of CSR for building a good image by supporting gay marriage and against gun carrying law. Brand building improves the image of the company and attracts customers’ support is also one of the strategies to success in specialty coffee cafe industry.
At last, innovation is also a key factor to success in specialty coffee cafe industry. Changing the menu from time to time and introducing new dishes to customers are both impressing to the customers. Being success in specialty coffee cafe industry should follow the trend of the industry, bringing new concepts and flavors to the customers can impressed and maintain customers in long-run.Starbucks has about 20 thousands stores all over the world, its innovative location selection strategy also provides a strong support to Starbucks’ rapid expanding. Starbucks normally considers location selection strategy from several aspects. First, it will analyze the target population. Starbucks’ target population is medium and high income community with good education background. Secondly, Starbucks will divide the whole city into several sub-regions, which is called mini-market; in each mini-market, Starbucks subdivides into several business circle and then further divides into several functional areas. Finally it will select location according to priority.
In conclude, offering high-quality coffee, building long-term relationship with customers, high employee loyalty, brand building and innovation are the key success factors to success in specialty coffee cafe industry.
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