Starbuck VS Old Town White Coffee


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Starbuck VS Old Town White Coffee

  1. 1. TECHNOLOGY COLLEGE SARAWAK1.0 INTRODUCTION 1.1 Starbuck is a coffee Shop and a largest coffee shop in the worlds based in Seattle, Washington, USA. Starbucks starts in Seattle in 1971. Three friends, Jerry Baldwin, Zev Siegl, and Gordon Bowker, who all had a passion for fresh coffee, opened a small shop and began selling fresh-roasted, gourmet coffee beans and brewing and roasting accessories. Starbucks is the leading specialty coffee retailer in the nation, with over 5,000 locations in 22 international markets. The Starbucks ensuring the extraordinary potential of coffee is discovered , revealed and delivered- helping to bring great pleasure to millions of people each day. 1.2 Old Town White Coffee, founded in 1999, made history when the company became the first, the pioneer white coffee producer to manufacture and launch the famous Malaysia Ipoh White coffee as a 3in1 instant Blend. Old town White Coffee 3in1 classic together with the original recipe from 1958 spearheaded a breakthrough in the coffee industry. The company single-handedly captured the original authentic taste of an otherwise localized white coffee, turning in into a mobile commodity a fast moving consumer good (FMCG), capturing the South East Asia market. 1
  2. 2. TECHNOLOGY COLLEGE SARAWAK2.0STARBUCK 2.1 LOGO, VISION & MISSIONStarbucks logo designed by Terry Heckler of Heckler Associates .New Starbucks logo will bedisplayed on the product starting in March, predominantly green logo of Starbucks andshowed pictures of women, a symbol of the seducer in ancient mythology that made thesailors were killed. Starbucks new logo is removing the words "Starbucks Coffee" is circular.VISIONThe company’s vision is to ‘establish Starbucks as the most recognized and respected brandin the world.MISSIONThe mission of Starbucks is to establish Starbucks as the premier purveyor of the finestcoffee in the world while maintaining our uncompromising principles while we growStarbucks is committed to a role of environmental leadership in all facets of our business.Provide a great work environment and treat each other with respect and dignity.Recognize that profitability is essential to our future success. 2
  3. 3. TECHNOLOGY COLLEGE SARAWAKApply the highest standards of excellence to the purchasing roasting and fresh delivery ofour coffee.Develop enthusiastically satisfied customers all of the time.2.2 SWOT ANALYSIS STRENGTHS WEAKNESS - Starbucks Corporation is a very profitable - Starbucks has a reputation for new organization, earning in excess of $600 million product development and creativity. in 2004.The company generated revenue of However, they remain vulnerable to the more than $5000 million in the same year. possibility that their innovation may falter - It is a global coffee brand built upon a over time. reputation for fine products and services. It has - The organization has a strong presence almost 9000 cafes in almost 40 countries. in the United States of America with - Starbucks was one of the Fortune Top 100 more than three quarters of their cafes Companies to Work For in 2005. The company located in the home market. It is often is a respected employer that values its argued that they need to look for a workforce. portfolio of countries, in order to spread - The organization has strong ethical values business risk. and an ethical mission statement as follows, - The organization is dependent on a Starbucks is committed to a role of main competitive advantage, the retail of environmental leadership in all facets of our coffee. This could make them slow to business. diversify into other sectors should the need arise. OPPORTUNITIES THREATS - Starbucks are very good at taking advantage - Who knows if the market for coffee will of opportunities. In 2004 the company created a grow and stay in favour with customers, CD-burning service in their Santa Monica or whether another type of beverage or (California USA) cafe with Hewlett Packard, leisure activity will replace coffee in the where customers create their own music CD. future. - New products and services that can be - Starbucks are exposed to rises in the retailed in their cafes, such as Fair Trade cost of coffee and dairy products. products. - Since its conception in Pike Place - The company has the opportunity to expand Market, Seattle in 1971, Starbucks its global operations. New markets for coffee success has lead to the market entry of such as India and the Pacific Rim nations are 3
  4. 4. TECHNOLOGY COLLEGE SARAWAK beginning to emerge. many competitors and copy cat brands that pose potential threats.2.3 STRATEGY2.3.1 BUSINESS STRATEGYEvery business can learn from another especially if a particular business is one that hasdisplayed tremendous success over the years. The Starbucks corporation and its successfulmarketing strategies are definitely something that anyone interested in business can learnabout.The best strategies of Starbucks company is Smart partnership, Starbucks coffee companyhas been known to create strategic partnerships that demonstrate the fact that another wayto grow your business is to partner smart, over the years the Starbucks corporation hasgreatly increased sales just by using this strategy.Customer satisfaction is a very important issue with Starbuck, from entrance to the store tothe very last drop to their coffee, it is a must that customers feel the uniqueness of enjoyingtheir Starbuck coffee experience.Innovation. To think up creative and innovative ideas to add to their product or services.They have added different flavours to their coffee, more food on their menu and evenbecame one of the first to offer internet capability in their stores.“Third Place” – From the very beginning, the Starbucks marketing strategy has focused oncreating the “third place” for everyone to go to between home and work. Creating this uniqueand relaxing “experience” and “atmosphere” for people has been very important for thecompany as they have realized that this is one of the strongest concepts attached to thecompany, to which customers have been strongly attracted. 4
  5. 5. TECHNOLOGY COLLEGE SARAWAK2.3.2 COMPETITIVE STRATEGYProvide a perfect Cup of Coffee – Starbucks history has shown that they place a hugeemphasis on product quality. Their coffee, even if priced slightly more expensive thanexpected, is notorious for satisfying customers with its rich, delicious taste and aroma. Creating a Starbucks Community. Expanded to create a community around theirbrand. On their website, individuals are encouraged to express their experiences withStarbucks history, and the company strives to “personally” join in the discussions. Brand marketing. Always focused on “word-of-mouth” advertising and letting the highquality of their products and services speak for themselves. For years, this has beenuniquely Starbucks, and it has played a huge part in making Starbucks Coffee Company asuccess. Starbucks should not flood new markets to drive out threats of smaller competition. Ifcannibalization occurs, and Starbucks is forced to close some of its operations, this couldseriously damage their reputation. Starbucks image is too important an asset in thecompanys international expansion efforts to let reputation tarnish it. Starbucks shouldcontinue to locate their operations in high traffic areas, high visibility areas. The companyshould continue to take excellent care in picking locations. It is extremely important thatStarbucks international stores reflect a uniqueness in their location and layout. Havinglocations in a variety of locations will ensure large market exposure. The main point is Starbucks reputation precedes itself. It has shown to be successfulin every new market penetration, and to move into smaller city markets would be nodifferent. 5
  6. 6. TECHNOLOGY COLLEGE SARAWAK2.3.3 OPERATION STRATEGYRESEARCH AND DEVELOPMENTStarbuckss organizational culture is one of innovation and creativity. This is evident throughthe continuous developments of new and exciting products. Whether its the new 4-cupthermal coffeemaker recently introduced to the market, or the Starbucks Double ShotEspresso beverage, Starbucks seems to be the market leader when it comes to newproducts and ideas. In November 2001, the Company introduced the Starbucks Card, whichis a stored-value card that can be loaded and re-loaded in denominations up to $500. TheStarbucks Card is a wonderful convenience tool for customers that can serve as great gifts,and reduces time spent at the cash register. This contributes to the overall enhancement ofthe customers experience. Starbucks is extremely pleased with the ongoing positivecustomer response to the Starbucks Card. It is through the introduction of new products andthe development of new distribution channels that Starbucks focuses on their Companysgoal of becoming the most recognized and respected brand in the world.PRICINGStarbucks has been able to accomplish with its pricing strategy focus on profit, not on saleand low pricing would erode the perception of quality. Starbucks represents an attractivecombination of price features, high quality, good service and other attributes customers findattractive.PROMOTIONStarbucks usually picks one or two charities or event that reach the community it serves. Forexample is Free tall cup of brewed coffee to anyone who votes on election day.FIRM INFASTRUCTURE 6
  7. 7. TECHNOLOGY COLLEGE SARAWAKStarbucks has proved to be a leader in identifying market trends and positioning themselvesaccordingly. For example, before the recent economic slowdown, management noticed adecrease in traffic. Rather than pull back from their expansion strategy, Starbucks launcheda series of small adjustments to improve efficiency, and continue with their plans.CUSTOMER SERVICEOne of Starbucks primary objectives is to provide a superior level of customer service. Oneof their guiding principles in their mission statement states, "Develop enthusiasticallysatisfied customers all of the time". In building customer loyalty, not only does Starbucksoffer high levels of customer service, but they also strive to educate customers about coffeequality. There is an information section in each store that provides customers a goodresource for becoming more knowledgeable about the world of coffee. Starbucks alsopublishes and distributes a mail order catalog and a catalog of business gifts that offercoffees, certain food items and select coffee-making equipment and accessories. Thecompany has several other initiatives to enhance the customers experience at Starbucksretail stores.MARKETINGStarbucks is the leading specialty coffee retailer in the nation, with over 5,000 locations in 22international markets. Starbucks positions their products on a relatively simple plane. Theyfocus on quality and experience, rather than price. A comparison of specialty drinks with itscompetitors reveals very minor differences. Starbucks image is one of the key elements totheir success. The company has realized that people dont only come for the coffee; theycome for the atmosphere. People socialize, read, study, or just enjoy the music whiledrinking their coffee. Knowing this, Coffee shops try to make their stores unique in some wayor another that will create an appealing atmosphere. Starbucks has less of a distinct settingfor their locations; instead, they focus on having plenty of comfortable seating so that peoplefeel welcome to stay longer than they might have planned. Starbucks also positions eachstore individually according to the specific location it is in. This flexibility has attributed to thegreat success of the Company in the past decade. Another important part of Starbuckspositioning is that they are environmentally friendly. While other retailers position themselvesin similar ways, no one focuses to the extent that Starbucks has. 7
  8. 8. TECHNOLOGY COLLEGE SARAWAK3.0 OLD TOWN WHITE COFFEE 3.1 LOGO, VISION & MISSIONThe Old Town White Coffee goal is to let everyone enjoy every sip authentic Malaysian Ipohwhite coffee anytime and anywhere.VISIONTo be Asian Pacific’s Leading White coffee producer providing high quality products tocustomers globally.MISSIONTo promote our unique Malaysian taste- the authentic Ipoh White Coffee and continue WhiteCoffee Legacy the rough continuous improvement and innovation that exceeds customerexpectations.By setting precedence Old Town White Coffee have made a standard that equalsexcellence, pushing other brands to do the same. 8
  9. 9. TECHNOLOGY COLLEGE SARAWAKStrive for continuous improvement, incorporate innovations and technology in ourcommitment to create customer value in our both product services.These continuing efforts maintain and reinforce our market leader status and more usforward to become a leading White coffee producer in Asia pacific.3.2 SWOT ANALYSIS STRENGTHS WEAKNESS-The profits obtained by Old Town is quite -Old town coffee also depends an the coffeehigh compared to other coffee shop in and makes them difficult to diversify theirMalaysia. product.-Offer other foods, such as “heavy food” -Innovation is slow because depend on one-Has many branches throughout Malaysia, product only.Singapore and Hong Kong. OPPORTUNITIES THREATS-Able to expend its operation to the global -Consequences from increasing of price ofmarket to be introduction throughout ASEAN. materials which they have use will be make-Able to re-brands and to compete with other the price product is also using the same material. -Product imitation is a very higher because they are using coffee which is very common. 9
  10. 10. TECHNOLOGY COLLEGE SARAWAK3.3 STRATEGY3.3.1 BUSINESS STRATEGYAll the store of Old Town Coffee White were located at high traffic, high visible location ineach Asia market. That the market entry strategies have found to be used by Old TownWhite Coffee in managing their foreign franchisees when expanding into Asia include masterfranchising and company owner-stores. The marketing approach is essential to gain a competitive advantage for Old TownWhite Coffee in the foreign market the construct included market entry, site location, andmarket positioning. Reason for Old Town White Coffee to choose master franchise as itsfrom of franchising is because of that the master franchising was the most popular made ofentry into distant and cultural dissimilar market Asia.3.3.2 COMPETITIVE STRATEGYTargeting Old Town white coffee: While evaluating their consumer market the conclusionwas that the ideal consumer’s economic profile will be Upper Middle Class, privileged Class.While the age demographics will be Students and Youngsters, Professionals, families,Mature Consumers. Gender and Ethnic or Religious Background was researched to haveminimal or no effect on the choices concerning coffee made by consumers and theirpatronage of coffee houses. To maximize on brand name (signature) Costa signifies luxury,excellence in Coffee, all over the world, along with the theme of Costa. The marketing communication strategy for Old Town White Coffee is raisingawareness of your product in your target market is where sales begin, and this is wheremarketing communications activities begin the selling process. With todays multiplechannels for content to reach potential customers, the art and science of marketingcommunications has become increasingly important. However, no company can be surethey are using the most efficient media mix without creating a marcom strategy that isaligned with their overall strategic marketing direction. 10
  11. 11. TECHNOLOGY COLLEGE SARAWAK3.3.3 OPERATION STRATEGYRESEARCH AND DEVELOPMENTIn 2005, it expanded vertically into the food services sector by opening a chain of caféoutlets based on the traditional Ipoh coffee shop setting and ambience under the ‘OldTownWhite Coffee’ brand name. Since the opening of its first café outlet in Ipoh in 2005, its chainof café outlets has expanded to around 160 café outlets in Malaysia and Singapore. Thisincludes fully and partially owned, and franchised café outlets. The management hassuccessfully mixed tradition with modern conveniences, revamped and revived the traditionalcafé concept into a successful working model with outlets conveniently located and easilyaccessible to customers.PRICINGPrice does affect customers’ choice on products or services. Customers are willing todaymore because they higher price means higher quality one brand offers. In brand competition,the best price any brand can offer is important yet they have to be careful not to create badconsequences for long-term.BRANDINGThe Malaysian coffee culture also being improvises by re-branding to enhance experienceand increasing sales by multiple transactions from regular customer. From small spaces andonly selling few selections of foods, Malaysian coffee culture has expanded by upgradingservices, more variety in food and beverage, and creating nostalgia as well as being chicand contemporary. The role of branding in local coffee culture not only providing space butmight be escapism for consumer and local society from different hierarchy, not to mentionthat this is kind of lifestyle and culture that they embrace. As a new life style and trend,Malaysian coffee culture is very popular for all public audience. It has grown along withsocial change needs and demand. 11
  12. 12. TECHNOLOGY COLLEGE SARAWAK4.0 CONCLUTIONThe Starbuck should make a variety of Old Town White Coffee must be diversify usecoffee flavour and diversify such as selling of coffee product that mention does not tooothers food to attract the more people. slow. Because of Old Town White Coffee isBeside that, Starbuck give discount price for one coffee shop famous in Malaysia, theythe regular costumers, this can make more should open branches throughout theypeople to attract going in Starbuck. Starbuck country to compete with other company. Inalso should create new flavour of coffee other way Old Town White Coffee shouldevery year. provide a various service such as shipping orders to customers house.0.5 REFERENCE 12
  13. 13. TECHNOLOGY COLLEGE SARAWAK1. Starbuck Corporation, Retrieved 20 August, on the World Wide Web: Starbucks International, 13