Astronomy ASTA01The Sun and PlanetsDepartment of Physic.docx

Astronomy ASTA01:
The Sun and Planets
Department of Physical & Environmental Sciences,
UTSC
Fall 2018
Problem Set 3
DUE: Tuesday November 13, 2018
Where: Hand in your solutions in the mailbox marked for your
tutorial,
on the 5th floor corridor of the Science Wing, near office
SW506C in the
Physics & Astrophysics section.
Reminder: Write your name on your solutions. Also make sure
you
carefully read the entire problem set policy that was distributed
on
Quercus. It will help you avoid standard mistakes and score
higher. We will
assume that you have read this policy document by the time you
return your
solution.
How to write your solutions: Be precise and clear. Explain what
you
are calculating. The method of calculation you adopt and your

reasoning are
the most important. In case of a computational mistake, you will
still get
credits if your method is right, so explain it clearly.
1
1. If the Solar System had formed right after the Big Bang, it
would
have lacked oxygen (O), and therefore water (H2O). Using the
solar
nebula theory, describe what would have been most different
about
the planet formation process and the planets formed in this
alternative
Solar System. [NO MORE than 15 sentences].
2. Halley’s comet is the only-naked eye comet that might appear
twice in
a human lifetime (since it comes back every 76 years).
(a) Based on this comet’s orbital period, would you say that it is
more
likely to have originated from the Kuiper belt or from the Oort
cloud? [A quantitative answer is expected to justify your
choice]
(b) What other orbital feature, besides the comet’s orbital
period,
could be used to distinguish its origin [NO MORE than 5 sen-
tences]
3. (a) Collect data on the mass and radius of Earth (made of
rock) &

Jupiter (made of gas) and calculate the overall average density
of
each planet, expressed in g/cm3.
(b) The density of water that we drink is about 1 g/cm3. Use
your
everyday experience to describe the difference in density
between
rock, air, and water. [State your answers in terms of “much
more/much less” or “a little more/a little less”].
(c) Is the mean density of Earth consistent with our everyday
experi-
ence of similar composition material? What about Jupiter (same
question)?
(d) Propose a physical mechanism that might explain the
discrepancy
between the mean density of a planet and the density of similar
composition material as we experience it in our everyday life.
4. Mean-motion resonances with Jupiter shape the Kirkwood
gaps in the
main asteroid belt. A resonance written as “5:2” refers to the
inner
body completing exactly 5 orbital revolutions when the outer
body
completes exactly 2.
(a) Using Kepler law, find the orbital radius in AU of the
following
important resonances for the Kirkwood gaps: 2:1, 3:1 and 5:2.
Compare your values to those shown in the diagram on
Kirkwood
gaps in the class lectures (see lecture 12 slides).

(b) High-value mean-motion resonances, such as 2001:1000, are
usu-
ally considered as weak and thus inconsequential. Explain why
you think that might be. [NO MORE than 5 sentences]
2
5. A simple temperature model for the solar nebula disk is
Tdisk(a) = 20 ×
√
100 AU
a
K, (1)
where a should be expressed in AU in this equation.
(a) Find the temperature in the solar nebula disk at the orbit of
Mer-
cury, Earth and Jupiter.
(b) Where is the water ice line located in this disk? [Use the
conden-
sation sequence values provided in the textbook]
(c) Mercury is mostly made of metal, the Earth mostly made of
rock
and Jupiter mostly made of gas. Are these three planetary bulk
compositions consistent with the condensation sequence, if one
follows the above temperature model for the Solar nebula?
3

STARBUCKS A MARKET OVERSATURATED
Starbucks
A Market Oversaturated
Bill Fleming, Haimanot Kassa, Jose A Leal, Rigoberto Huerta,
Team A - Part II
October 22nd, 2018
MGT 362.C1
Prof. Pham

Contents
Executive Summary 3
What are the main reasons for the slow growth of Starbucks in
America? 3
Will Starbucks’s new brand of reserve and premium locations
help the Starbucks label? 3
Will the change in leadership alter the situation with Starbucks?
4
Chapter One: Introduction to the Firm 4
Chapter Two: Analysis of the External Environment 4
Chapter Three: Internal Analysis 6
Chapter Four: Cultural Assessment 7
References 9
Appendix A 10
Appendix B 11
Appendix C 12
Appendix D 14

Executive Summary
The Starbucks Corporation is an American coffee company and
a coffeehouse chain (Starbucks.com). After its founding, the
company experienced fast growth both nationally and abroad
becoming one of the most recognized brands globally. Although
the company experienced fast growth and success, Starbucks
has had many setbacks. Additionally, the company has matured,
and its growth outlook seems limited.
Starbucks was selected as the subject of analysis for this project
due to the many interesting challenges and changes it is facing.
While Starbucks stores continue to be a popular destination
amongst coffee drinkers, the company is facing high
competition and market saturation. In this report, we will
highlight some of the urgent issues the company must address
and will recommend strategies for the company to mitigate
possible risks when competing in an oversaturated market.
The collaborators of this report are Starbucks customers.
Therefore, the relationship between the company and the
authors is that of a “consumer”. The authors’ objectives is to
develop a strategy; regardless of the heavy competition, to
retain current clientele and generate new business in order to
reach a Net Profit margin increase of 25% in 2019 and 30% by
2020.
Starbucks is currently facing many challenges ranging from
changes in leadership to discriminatory practices in its stores.
However, one of the most urgent issues that demand attention
and to be kept in scope is high competition and market
saturation. For the company to continue to experience success

and growth, the company must continue to innovate and appeal
to the customer, as well as to revisit its number of stores and
presence in the market.
Unlike its competitors, consumers have labeled Starbucks as a
“basic” brand (Taylor, 2017). Starbucks used to be considered
an upscale establishment, but that notion has begun to shift to a
basic brand as consumers have become bored with the Starbucks
brand. Newer independent concept coffee and roasting shops are
beginning to open across the U.S. As a response, Starbucks has
announced a line of premium or reserve shops. The company is
expected to give a unique upscale feel at an estimated 1,000 of
its stores, in efforts to shed the “basic” label off (Robinson,
2017).
What are the main reasons for the slow growth of Starbucks in
America?
Although coffee consumption in America continues to increase,
Starbucks has experienced slowed growth at an estimated 3%
per annum. Unlike in the earlier years, the company is suffering
from market penetration by upscale gourmet coffee shops and
an oversaturation of similar “basic” coffee shops. In addition,
an over saturation of Starbucks shops is hurting the brand. Since
2012, Starbucks has increased to having 3.6 locations within a
one-mile radius (Franck, 2017).
Will Starbucks’s new brand of reserve and premium locations
help the Starbucks label?
Starbucks has shifted its expansion plans from opening standard
retail shops to identifying specific higher income locations and
targeting specific demographics. Although focusing on the
current company’s business model would enable Starbucks to
focus on quality and service, creating an upscale concept for
specific market sectors may help shed the basic label and cure
the oversaturation issue. Thus, Starbucks needs continue to
innovate to attract and retain customers.

Will the change in leadership alter the situation with Starbucks?
A change in leadership from former CEO Howard Schultz to
new CEO Kevin Johnson during challenging times leaves
stakeholders hoping to see Mr. Johnson ushering in a wave of
change and bringing innovative ideas. The purpose of this
project is to develop a strategy that captures the consumer’s
view and expectations from the moment they enter a Starbucks
coffee shop. The project will help the company to incorporate
the need to diversify its brand into the upscale coffee shop
Starbucks was once known for.Chapter One: Introduction to the
Firm
Established in 1971, Starbucks Coffee is a shining example of
an American small business success story. As of July 2018,
Starbucks is an international company with 28,720 stores and
franchises across the globe. Starbucks prides itself in being
identified as one of the best companies to work for‒great
benefits and opportunity for advancement. Starbucks has
become a social activist company tackling political and
inequality issues, as well as establishing fair trade practices
with coffee growers across the globe (Starbucks, 2018).
However, Starbucks now faces considering having over-
saturated the retail coffee market in the United States, as well
as changing trends in consumer coffee consumption and the
threat of new entry by multiple gourmet coffee retailers in
congested urban environments. In addition, the political climate
and ongoing changes in trade relationships between America
and many of its trading partners could potentially have a
negative impact on the cost of imports. Although Starbucks is
the leading coffee company in the world, several changing
factors could impact its future capability to compete.
In order to help Starbucks deal with its current challenges and
prepare for a bright future, we will use a variety of tools and
approaches. We will start with relevant news and financial
articles to assess some of the issues currently facing the brand.
Once we have an idea from the research what we should be
looking for, key performance indicators (KPI’s) and analysis of

the company’s recent financial statements will be used to
evaluate financial performance and trends of the company as
well as its franchises. We will be looking for the story in the
data as well as its trends especially that back up our research.
Benchmarking will also be used to compare the company with
rival competitors and within the company’s many franchise
operations again to see what is happening at the store level
across the country and the world. Additionally, we plan to use
Porter’s five forces model to properly assess the industry as a
whole and understand Starbucks relationship with its suppliers,
customers, rivals, substitutes and what external pressures may
be limiting profits and determine where and how those pressures
could be alleviated to increase profits in the long term.
After applying all these tools for analysis, we will identify the
best strategy for Starbucks to move forward to maintain and
continue its storied success and avoid any future problems or
potential pitfalls.Chapter Two: Analysis of the External
Environment
Starbucks initially differentiated itself as a premium product
with a premium customer experience. Thus, establishing a
premium brand significantly differentiated from the rest. This
positioning allowed for a premium price. Since then, many
competitors have followed suit, imitating its products and
ambience. From McDonald’s and Dunkin Donuts to the other
coffee chains, and independent coffeehouses (that owe their
wide market acceptance to Starbucks’ creation of the market).
To combat the increased competition, we seek to help
Starbucks rejuvenate the customer experience and invigorate the
brand to retain current clientele and generate new business to
reach a Net Profit margin increase of 25% in 2019 and 30% by
2020.
First, we will look at relevant news and trends identifying the
problem. Then we will do an external analysis of the industry
for Starbucks’ position in the form of a SWOT analysis focusing
on the opportunities and threats. Then we will conduct Porter’s

five forces model analysis as well to determine the competitive
industry environment and where profit is being squeezed or
could be increased.
In recent years the Starbucks brand has suffered. Ironically, as a
by-product, if its widespread success and growth it has become
ubiquitous and labeled as “basic” by its customers (Taylor,
2017). What used to be a trendy and premium brand has become
the norm and therefore no longer noteworthy. Similar quality
coffee can now be bought in fast food restaurants, and
coffeehouses dot the landscape (including many Starbucks). So,
Starbucks is at a crossroads where it no longer stands out as
exceptional, and so its brand is slowly losing its luster.
The external portions of the SWOT analysis reveal several
opportunities and threats (see appendix B). The first opportunity
is in developing markets. The developed markets are already
saturated with Starbucks and other coffeehouses. This leaves the
logical choice of going to emerging markets where they can
capitalize on growing economies and a rising middle class.
Business diversification offers a chance to reduce dependence
on current revenue streams and can open new ones, possibly in
less crowded spaces. Partnerships with other firms may improve
sales by increasing distribution (Lombardo, 2018).
Using Porter’s five forces model (see appendix C) we see that
the threat of entry is moderate. Operating costs and supply
chain costs are moderate for a new entrant. Branding cost is
high and takes both time and capital. Although this doesn’t hold
profitability to low levels it doesn’t allow for exorbitant profits
either. The power of suppliers is weak as there is a large supply
globally with a large variety. Suppliers are not large or
concentrated. This increases profitability. Large coffee chains
like Starbucks to command a greater share of industry profits
than suppliers do. The power of buyers is strong; mainly
because switching costs are almost non-existent. Additionally,
there are many substitutes available to consumers, as substitute
options are abundant. Thus, making the power of substitutes is a
strong force. Substitutes are even stronger when you add in the

fact that similar drink products are available to customers at
lower prices than what Starbucks offers. Rivalry among
competitors is strong because of a large number of firms with
only moderate diversity and the ease of switching for consumers
(Greenspan, 2018). These three factors: buyers, substitutes, and
rivalry, combine to hold prices low and inhibit greater
profitability.
The external analysis reveals considerable pressure from threats
of competition and substitutes. To address this, Starbucks needs
to increase differentiation from those threats. Initially, products
were major differentiators but over time have proved to be
imitable by almost anyone (including McDonald’s). Its store
environment of a welcoming “third place” was also a key
differentiator and still is compared to the substitutes and some
competitors. Unfortunately, some coffee houses have
successfully imitated Starbucks store environment. Customer
satisfaction, and a uniquely positive customer experience could
be a way to stand out from the competition and increase
customer loyalty. This could also raise switching costs in the
mind of the consumer. Unless the brand can differentiate, it
risks continued lowering of the brand image and eventually
eroding of its ability to charge a premium. That hurts bottom-
line profits and eventually shareholder’s stock price.
Chapter Three: Internal Analysis
Since its founding Starbucks has experienced a fast and robust
growth thanks to the ability of the company to deliver a
customer experience unlike anything is seen before. Due to this
new concept, the Starbucks brand became one of the most
recognizable brands in the world. Howard Schultz, Starbucks’
founder, first purchased a whole Arabica bean shop company in
Seattle’s Pike Place Market, which morphed into a successful
global corporation. Inspired by “Milan’s coffee culture, in
particular, the role the neighborhood espresso bars played in
Italian’s everyday social lives” (Moon & Quelch, 2006), Schultz
created a “third place,” away from home and work, for a
customer to enjoy. Schultz believed that by having happy

partners (i.e., employees), partners would, in turn, provide high-
quality customer service. Thus, in its efforts to nurture a happy
work environment, Starbucks offers generous compensation and
health insurance policy to its employees.
Although the company was very successful with its
revolutionary Starbucks experience, market research data shows
that consumers’ satisfaction is declining (Moon & Quelch,
2006). Moreover, research shows that Starbucks’ consumer base
has shifted from the well-educated and more established
consumers to the younger, less educated, and lower income
earners. Furthermore, research shows that a high priority for the
younger customer base is timeliness. As efforts from Starbucks
provide a faster service, the customer experience is less of a
priority for Starbucks partners. Due to the inconsistency and
neglected customer experience, customers are getting confused
with Starbucks identity and bored with the brand. This dilemma
of providing timely services at the cost poor quality customer
service poses an interesting challenge for Starbucks. On the one
hand, Starbucks’ high-quality customer service was known for
the personalized customer service baristas provides customers.
On the other hand, this level of personalized service takes time
to create. As Starbucks’ menu have an increase (which means
baristas have a higher list of customizable orders), baristas have
to choose between providing a quality customer service or
completing customers’ orders. As Starbucks faces high
competition in a saturated market, the company must leverage
its internal resources and capabilities to elevate the customer
experience to the next level.
Given that Starbucks, more than just selling coffee, sells the
Starbucks experience, must create strategies that allow the
company to meet the various needs and preferences of its
customer base. Starbucks has a long list of resources and
capabilities other coffee chains can only dream about (please
see Appendix D). For example, Starbucks has an information
system that can create synergies to enhance customer experience
(Wailgum, 2008). Furthermore, the company has a strong social

media presence, which allows Starbucks to reach millions of
customers instantly. Also, the company has a large store
footprint, which allows the company to combine the
convenience of online shopping with the real feeling of brick-
and-mortar shopping. Due to the company size, Starbucks has
built strong relationships with growers around the world. This
gives Starbucks a competitive advantage, as smaller coffee
shops do not have these relationships. These capabilities and
resources are complemented by the strong leadership of the
company’s CEO and its leadership team. Although small and
independent coffee shops can be agile in creating strategies,
they do not have the expertise a seasoned executive has.
Some of Starbucks’ challenges are self-inflicted wounds (e.g.,
store cannibalization). In its efforts to be innovative and
produce new products, the company has made working
conditions for its partners less desirable. Additionally, partners
are too preoccupied with completing complex beverages, more
so, than to providing high-quality customer service. Moreover,
as Starbucks menus keep on increasing, baristas are less
knowledgeable about the various ingredients its products
contain. The once desirable personal Starbucks experience is
turning to that of a fast food experience. Starbucks must make
effective use of its internal resources and capabilities, create
synergies, and build on strong relationships with growers to
ensure Starbucks’ products are the finest products coffee lovers
can buy. Additionally, the personalized Starbucks experience
should complement these high-quality beverages.Chapter Four:
Cultural Assessment
It is suggested that “a happy employee is a productive
employee”, and this certainly holds true when it comes to
Starbucks employees. Starbucks has created a work culture that
is diverse, inclusive and empowering. At the very foundation of
the Starbucks employment experience is the inclusiveness and
incorporation of each and every employee into the fabric of the
company. Starbucks employees are referred to as “partners”,
which highlights the importance of the employee’s contribution

to the success of the company. Starbucks hires a diverse
workforce including people with disabilities and supports
“Partner Networks” which are employee resource groups that
represent employees from different backgrounds. (Starbucks
Careers, 2018) Employee resource groups are a fundamental
component of a positive employee experience, these provide
employees with a group and a place to feel accepted and to
belong to; it also provides a networking platform for career
development, mentoring and coaching. (Why employee resource
groups still matter, 2017). Starbucks is invested in its
workforce and provides a number of benefits not widely offered
in the food industry or to hourly employees, these include
health insurance, stock buying options, and tuition
reimbursement. (Chris, 2015)
Successful organizations aren’t simply a result of a published
mission statement and a claim of being inclusive. Instead, they
are a result of effective leadership that inspires, encourages and
engages team-members both as individuals and as part of a team
(7 Howard Schultz Leadership Style Principles, 2015).
Starbucks is an exemplary company that was reinvented by its
innovative and transformative leader, CEO Howard Schultz.
Mr. Schultz is not simply focused on developing a multi-billion
dollar coffee brewing empire; he put in place several
components required to create a successful business that
provides a good service to customers. For example, the
Starbucks experience, product quality, and taste is consistent
throughout its global stores, Schultz sees extreme value in
understanding the Starbucks customers and the employees,
creating partnerships, and establishing Starbucks as a
community gathering spot for coffee and what is referred to as
the third place (home and workplace being the first two). (7
Howard Schultz Leadership Style Principles, 2015)
Not only has Mr. Schultz succeeded at energizing his
workforce, he has also been able to energize the media and the
public by advocating for social issues such as encouraging
discussion about race, asking customer to not bring firearms

into his stores, tackling youth unemployment and executing a
company-wide anti-bias training to address a discriminating
occurrence at a Philadelphia store (Howard Schultz at
Starbucks: Coffee, Activism and Controversy, 2018). Starbucks
has the reputation and the global influence to take on social
issues that are of importance to both customers and employees.
Although much of Starbucks’ success is accredited to its
partners, the values and guidelines that make up the culture of
the company are at risk of diluting as the company continues to
expand. The larger the company (including franchises), the
higher the change of a disconnect to the primary mission of the
company and the central leadership team. (The Culture Case
Study of Starbucks, 2017)
Mr. Schultz stepping down as CEO of the company creates both
a window for opportunity as well as multiple risks. Mr. Schultz
has been accredited for the massive company growth and
implementation of a culture of social consciousness. In the past
four decades, thru his approach in creating a “moral leader” out
of the company, Schultz strived to create an organization where
profit and conscience were balanced (Sorkin, 2018).
Starbucks’ new CEO Kevin Johnson will face a similar
challenge faced by Apple’s CEO Tim Cook when replacing
Steve Jobs: Keeping the company on a progressive and
innovative path. Both Mr. Johnson and Mr. Cook face the
similar dilemma of identifying how much of the previous
leadership style is to be retained, and if changes are made, how
will these impact the work culture and workforce morale.
During the month of November 2018, Starbucks is scheduled to
take a stab at reorganizing by eliminating a number of corporate
level positions in an effort to begin the process of “Shaking up”
the organization (Whitten, 2018). Reorganizations run the risk
of generating fear and resistance, specially if these are
conducted in a sweeping manner instead of targeted (Another
Reorganization? What to Expect, What to Avoid, 2003). Mr.
Johnson is seeking to energize leadership’s velocity of
innovation in reference to customers and its partners (Whitten,

2018). Starbucks appears to have identified an area of
improvement when it comes to the diversification of products
and services for customers, but most importantly that its
partners need to be brought back to committing to the
company’s core values; any improvement to the customer
experience can lead to profit growth and retention.
Chapter Five: Strategy Formulation: Exploration of alternate
strategies and their probable impact and explain how you
choose the strategy to pursue. Do include a clear statement of
the old and new objectives of the firm before you launch into
the details of your discussion. You should draw what you have
learned from this course and your marketing course for this
section. This section is where you pull together all the analyses
you have conducted and discussed into a Ly-Huong T. Pham,
MBA, Ph.D. Page #3 coherent looking-forward strategy
extending to 3 to 5 years. You should consider crafting a final
statement of the new Strategy in no more than two or three
sentences. If you can’t then your new strategy is probably too
complicated.
5. Strategy Plan components
1. Mobile cart and delivery stores
2. Customer experience: Deepen customer experience through
digital innovation such as delivery service, digital ordering,
cashless payment, rewards, and personalization.
3. Price increase
The chosen strategy is Customer experience
In order to reach a net profit margin of 25% increase by 2019
and 30% increase by 2020 Starbucks will refocus on customer
experience.

By rejuvenating its commitment to service excellence SB will
differentiate from competitors.
These improvements will increase the growth rate through
reinforcing brand loyalty, retain and increase sales with existing
clients and attract new ones.
Rigo’s part
3) Discuss a coherent looking-forward strategy extending to 3 to
5 years
From the get-go, Starbucks was able to create a special
connection with customers. By asking baristas to learn the name
of frequent customers, Starbucks baristas were able to provide a
personalized experience to customers. Complementing
Starbucks individual connection to customers, was Starbucks’
extensive menu options. Although, various coffee shops and fast
food restaurants sold coffee, none of these coffee shops
innovate the coffee industry. Starbucks revolutionized the
coffee industry, not only by creating a personal connection
between Starbucks and customers, or by creating a third place
(away from work and away from home), but also by creating
innovative exciting coffee drinks. The crafting of these factors
gave birth to the Starbucks experience and allowed the company
to charge a premium for it.
As the Starbucks experiences has aged and customers are
getting bored with the brand, Starbucks must once again
revolutionize the coffee industry. To do so, Starbucks should
explore: explores mobile delivery methods, depend the virtual
Starbucks experience, and leverage grower relations to obtain to
quality products. The delicate crafting of this factors will
increase value to customers, which will allow the Starbucks to

charge premium prices.
Independent coffee shops have saturated some parts of the
coffee market. For Starbucks to still gain growth, we suggest
Starbucks takes advantage of the popularity of the mobile food
truck concept and explore this mobile delivery option. For
example, it would be innovative if Starbucks trucks bring
products to office areas and places where construction
constraints limit the Starbucks’ brick and mortar growth.
Another are where Starbucks can innovate is in the virtual
world. Although, Starbucks already uses mobile apps receive
orders from customers, Starbucks exploit this technology even
further. For example, Starbucks could use the app to show how
and where coffee beans are being grown. Additionally, the
company can show how by buying a cup of coffee customers
make a direct positive impact on growers around the world.
Additionally, the Starbucks app can be used to place orders for
home consumption. Customers place orders to products like
coffee beans, grown coffee, coffee beans, mugs, etc. This
concept will also help Starbucks stay close to the Generation Z,
as they are heavy tech users.
As independent coffee shops keeps on saturating the market,
Starbucks must be able to differentiate itself from the
competition. Starbucks must do by providing to quality
customer service and by selling the best coffee available.
Starbucks has the grower relationships and capital to ensure the
company get the best coffee beans grown around the globe. This
differentiation will allow the company to create value for
customers and increase prices.
4) Craft a final statement of the new strategy in no more than
two or three sentences.
To capitalize on the Starbucks’ brand, Starbucks must once
again innovate the coffee industry. To do this the company
must: explore mobile delivery methods, depend the virtual
Starbucks experience, and leverage grower relations. The added
value Starbucks will provide customers will allow the company
to charge premium prices for a rejuvenated Starbucks

experience.
Chapter Six: Implementation: This chapter will provide your
recommended action plans how you envision the company’s
strategy being amended in order to achieve a better match
between the requirements of its environment and the company’s
internal potential for competitive advantages. Do include any
organizational changes that are results from your analyses.

References
Another Reorganization? What to Expect, What to Avoid.
(2003, July 02). Retrieved November 12, 2018, from
http://knowledge.wharton.upenn.edu/article/another-
reorganization-what-to-expect-what-to-avoid/
Chris, J. (2015, August 25). 7 Howard Schultz Leadership Style
Principles. Retrieved from
http://www.josephchris.com/7-howard-schultz-leadership-style-
principles
F. (2017, January 09). The Culture Case Study of Starbucks.
Retrieved from http://shaunfrankson.com/starbucks/
Greenspan, R. (2018, September 07). Starbucks Coffee Five
Forces Analysis (Porter’s Model) & Recommendations.
Retrieved from http://panmore.com/starbucks-coffee-five-
forces-analysis-porters-model
Lombardo, J. (2018, August 30). Starbucks Coffee Company
SWOT Analysis & Recommendations. Retrieved from

http://panmore.com/starbucks-coffee-swot-analysis
Moon, Y., Quelch, J. (2006). Starbucks: Delivery Customer
Service. HBS No. 9-504-016. Boston, MA: Harvard
Business School Publishing
Mourdoukoutas, P. (2018). Starbucks’ Problems At Home And
Abroad. Forbes. Retrieved
fromhttps://www.forbes.com/sites/panosmourdoukoutas/2018/06
/27/starbucks-problems-at-home-and-abroad/#58e029fc64b5
Sorkin, A. R. (2018, June 04). Howard Schultz to Step Down as
Starbucks Executive Chairman.
Retrieved from
https://www.nytimes.com/2018/06/04/business/dealbook/starbuc
ks- howard-schultz.html
Starbucks®. (n.d.). Retrieved from
https://www.starbucks.com/careers/working-at-
starbucks/culture-and-values
Taylor, K. (2017, September 09). Starbucks still has a 'basic'
image problem - and one factor could make it even worse this
PSL season. Retrieved
fromhttps://www.businessinsider.com/starbucks-oversaturation-
and-basic-image-problem-2017-9
Wailgum, T. (2008). How IT Systems Can Help Starbucks Fix
Itself. CIO. Retrieved from
https://www.cio.com/article/2437262/strategy/how-it-systems-
can-help-starbucks-fix-itself.html
Why employee resource groups still matter.(2017, July 31).
Retrieved October 18, 2018, from
https://www.bloomberg.com/diversity-inclusion/blog/employee-
resource-groups-still-matter/
Whitten, S., & Rogers, K. (2018, September 24). Starbucks to
cut corporate staff as it shakes up its organization. Retrieved
November 12, 2018, from
https://www.cnbc.com/2018/09/24/starbucks-to-cut-corporate-
staff-as-it-shakes-up-its-organization.html

Appendix A
Term Paper - Project Outline
Deliverable
Due Date
Contributors
1. Part 1
1.1. Executive Summary
1.2. Chapter 1
1.3. Appendix
1.4. References
1.5. Review, Edit, Submission
September 22, 2018
1. All
1.1. Haimy, Rigoberto
1.2. Jose, Bill
1.3. Jose
1.4. All
1.5. Jose
2. Part 2
2.1. Chapter 2
2.2. Chapter 3
2.3. Chapter 4
2.4. Appendix
2.5. References
2.6. Review, Edit,
Submission
October 22, 2018
2. All
2.1. Bill
2.2. Rigoberto
2.3. Jose
2.4. Haimy
2.5. All
2.6. Haimy

3. Final Version
November 21, 2018
3. All (TBD)
4. Presentation
November 18 – 21, 2018
4. All (TBD)
Appendix B
SWOT Analysis
EXTERNAL
OPPORTUNITIES:
· Developing markets
· Diversification of business
· Partnerships with other firms
THREATS:
· Competition and lower prices
· Growth of competitor chains and independent
coffeehouses
· Imitation

Appendix C
Michael Porter's Five Forces
Threat of entry is MODERATE
Branding costs are high
supply chain costs are moderate
Operating costs are moderate
The power of suppliers is WEAK
Large supply
Large variety of suppliers
Suppliers are moderately-sized
The power of Buyers is STRONG
Many buyers small size purchases
Many substitutes
Low switching costs
The power of Substitutes is STRONG
High substitute availability (high-quality home brewing,
convenience stores, restaurants & diners)
Low relative price & high performance of substitute
Low switching costs
The rivalry among existing competitors is STRONG
Large number of firms (Tom Hortons, Pete’s, Caribou,
independents, McCafé, Dunkin Donuts )
Moderate diversity of firms
Low switching costs
Appendix D
Starbucks VRIO Framework

Resources and Capabilities
V
R
I
O
Valuable
Rare
Imitable
Organization
Knowledgeable Staff (Partners)
X
Customer Experience
X
X
Product Differentiation
X
X
Store Footprint
X
X
X
Brand Recognition

X
X
X
X
Capital Investments
X
X
X
X
Corporate Partnerships
X
X
X
X
Relationships with Farmers/Growers
X
X
X
X
Strong Leader with Clear Vision
X
X
X
X
Ability to Innovate
X
X
X
X
Information Systems
X
X
X
X
Social Online Presence
X

X
X
X
Chapter Five: Strategy Formulation: Exploration of alternate
strategies and their probable impact and explain how you
choose the strategy to pursue. Do include a clear statement of
the old and new objectives of the firm before you launch into
the details of your discussion. You should draw what you have
learned from this course and your marketing course for this
section. This section is where you pull together all the analyses
you have conducted and discussed
Strategy Plan components
1. Mobile cart and delivery stores
2. Customer experience: Deepen customer experience through
digital innovation such as delivery service, digital ordering,
cashless payment, rewards, and personalization
3. Price increase
The chosen strategy is Customer experience
In order to reach a net profit margin of 25% increase by 2019
and 30% increase by 2020 Starbucks will refocus on customer
experience. By rejuvenating its commitment to service
excellence SB will differentiate from competitors. These
improvements will increase the growth rate through reinforcing
brand loyalty, retain and increase sales with existing clients and
attract new ones.

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