Nabob is Canada’s leading premium coffee, offering a variety of different types and flavours, initially they should offer their highest volume products in pods before adding more selections later on. They should follow their U.S. price points for Maxwell House, and undercut rival brands to gain consumers. Kraft can afford to offer lower prices due to their low production costs. The lower price than competitors would not significantly affect brand image, consumers know the quality that they are getting. Kraft should choose its traditional distribution method to deliver its product to retailers.
Starbucks is a major customer for most suppliers, which in turn lessens the bargaining power of the suppliers. Although Starbucks has the upperhand on negotiating with suppliers, they have not been taking advantage of their suppliers. Starbucks undertook a fair trade practice, coffee and farmer equity (C.A.F.E) program, which provides suppliers with a partnership with the coffee giants. (Investopedia. 2015, December
Including farmer loans and forest conservation programs. When customers buy coffee, farmers can have a better future and more stable climate for the planet, and it helps create a long-term supply of the high-quality beans. Since, Starbuck paid a premium price to purchase farmers coffee beans, it is ensured fair transaction and safeguard farmer benefit. Regarding the principles for ethical sourcing, Conservation International has formulated a buying guidelines to address the issues. Called Coffee and Farmer Equity (C.A.F.E.)
The constant global economic recession has hurt the current economic environment by diminishing the general public’s purchasing power, which, in turn can have a detrimental effect for Starbucks as part of the consumer goods industry. However, recent market research has shown that, despite any signs of recession, consumers are yet to diminish their coffee consumption, however, they are looking for cheaper alternatives, which means that Starbucks is still able to influence buyers by offering less costly products. Consumers are generally becoming more conscious of ethics and fair trade, which means that they are interested in buying from brands that are both socially and environmentally conscious, and that can be a challenge for a large organization such as Starbucks. A PESTLE analysis is a tool used by companies to track the environment they’re operating in or are planning to launch a new project, product or service. PESTLE is a mnemonic which in its expanded form denotes P for Political, E for Economic, S for Social, T for Technological, L for Legal and E for Environmental.
While the natural circumstances of weather, rainfall and sunshine quantity, and altitude generally affect the taste of the finally-processed coffee, National Coffee Association USA (2015) also notes that the way in which the picked cherries are processed also contributes a lot to the quality of the beverage. Colombia, one of the largest suppliers of coffee to Fair Trade, has upped its game in the growing, processing, and the entire production of coffee to ensure that it remains one of the best producers of this coveted bean. National Coffee Association USA (2015) identifies that its highest grade, which is referred to as Colombian Supremo, provides a delicate and aromatic sweetness. This could be one of the reasons that explain why most of Fair Trade Coffee comes from the Latin America and Caribbean. It should also be noted that the Brazilian coffee provides one of the best flavor and quality in terms of low acidity, which satisfies its choice as one of the modern producers of Fair Trade Coffee.
This strategy will bring more revenue to the company and will put the Starbucks on the map with other great small shops. The brand has also positioned itself best coffee brand in the market by providing attractive store design, unique environment, elegant taste and high quality coffee beans (Kotler & Keller, 2009). Risk management in Starbucks organization is very important and the company takes them very seriously. The company cannot afford mistakes or failures, so they hire the best of the best to managers and employees. The company has a very tough hiring process, because they want to be sure that the person they are hiring is a perfect fit for its position.
Whereas, Starbucks has the biggest strength of its brand name value in the world coffee industry. It is not comparable with the others. It helps to boost the customer’s credibility for the brand. Therefore, the company is started from the United State, but they would be able to have had lots of coffee chains across the globe. Besides, as mentioned above, Starbucks give star points depending on your purchasing price and the result of the reward events.
More importantly, I will discuss the different perspectives from the article and determine the proper stance on corporate social responsibility that is best for Starbucks in order to thrive in the food and beverage industry. Background Capitalism is widely seen as a mistrusted system centered on greed and selfishness. This is why it is important for businesses to have a sense of
Emphasizing on the messages “fair trade as a substitute example to charity” (Argenti, 2004) apply compulsion on coffee multinationals companies such as Starbucks to acquire fair trade coffee in order to grant morally on customers and parallel their organization philosophy with fair trade practices. Therefore, in order to convince consumers to repeatedly support their cause by using Fair Trade licensed coffee to be one of the rapidly rising section of the US specialty coffee market, Transfair USA enlightened mixture of rhetorics in strategic communication (Fair Trade USA, 2014).Strategic communication in third sector is greatly important as it permits corporation to progress on effective discourses through evolving significant involvement with its key publics through convincing value driven communicationsHence, this is primarily in reuniting the dissimilarity intrinsic in the society-modifying nature of the third sector and its achievement-based placement that contests for community scrutiny and subsidy (Radtke,
The company is very keen on ensuring that its coffee is different from the rest of the competitors. The process starts by bean procurement where it selects the highest quality beans that are firmly specialty varieties of Arabica beans. The company inspects the brews to ensure that it matches the flavor, taste, and aroma that it needs. This consistent way of giving customers the same taste of quality coffee has served a competitive advantage to this company. Further, the company places its cafes and restaurants in strategic places where customers can see it.