Green Mountain Coffee Roasters

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Green Mountain Coffee Roasters

  1. 1. GREEN MOUNTAIN COFFEE ROASTERS Roasting Opportunities into Sales
  2. 2. GMCR PROFILE 01/08/11 Mail Order Business Roasted and Served Wholesale Café Restaurants & Inns U.S Regions worldwide 60 Coffee Product GMCR Roasts 25 Arabica Beans 1981,waitsfield,vermont Wholesale Mail Order Business Author:Shahina Perveen
  3. 3. GMCR PROFILE 01/08/11 Max Revenue 7000 Wholesales Northern US supermarket food service hotel restaurant university specialty food store convenience store travel/office service whole bean/ ground brew coffee/ coffee beverage Home Consumption Wholesale Operation Author:Shahina Perveen
  4. 4. GMCR PROFILE 01/08/11 Retail Operation Strategy Coffee by Cup 12 GMCR own store 7 states of U.S 10% total revenue 1997 6% total net sale 1998 (-) ive cash flow 1981 Relocation/flat sales Author:Shahina Perveen
  5. 5. COFFEE INDUSTRY Value Migration 0 1987 90% Share Procter& Gamble Philip Morris/Kraft Nestle` SA 1993 10% Share Others 78% Share $5 b Market Value 22% Share Procter& Gamble Philip Morris/Kraft Nestle` SA Gourmet,Starbuck whole bean roaster others $4 b Market Value $1 b Market Value 1987 90% Share 2000 75% Drink at Home 01/08/11 Author:Shahina Perveen
  6. 6. SPECIALTY COFFEE INDUSTRY 01/08/11 1991 2000 $1.5 billion $5 billion 1999 brew whole bean ground $7.5 Billion Consume 5% output Procter Gamble Develop Poor Brand Image Philips Morris Chock Full O Nuts Specialty Coffeehouse grew 1991 500 units 2000 12,000 units Specialty coffee industry 8% annually 2.5 ml more consume specialty coffee in 1998 than 1997 Author:Shahina Perveen
  7. 7. SPECIALTY COFFEE INDUSTRY 19% buys others 4% buys Mail order 2% buys Food store 14% buys specialty Coffee store 2 Biz Segment Whole Bean Coffee Beverage Qualities of bean Origin Quality Processing Cultivation 1999 Gallup survey Identifies 61% buys Superstore/Grocery 36% buy for home 64% buy immediate consumption Reasons to buy Location of purchase 01/08/11 Author:Shahina Perveen
  8. 8. COMPETITORS ANALYSIS 2000 $2.2 billion sale 2619 store 238 store 156 store 15 store 2 store U.S Canada U.K Australia Thailand Strategy Third Parties Consumers Retail store licensing Wholesale account Grocery channel Joint Ventures Office Coffee Institutional food service hotels airlines restaurants Wholesales 1998 Kraft 16000 Superstore U.S cup by cup 3500 location worldwide 12 ml customer 17 countries/wk 01/08/11 Author:Shahina Perveen
  9. 9. COMPETITIVE ANALYSIS Rivalry among Competitors Entry of new competitors Bargaining power of Buyer Bargaining power of Supplier Potential Development of Substitute products New brand Coffee Other types of specialty Social ties with suppliers Alliances with supplier Partnership and Funding Weak for forward integration Quality Product Specialist Market Backward integration Disperse consumer group Little entry barrier Brand Image creation No legal issues Little Capital required Little technology required Intensive competition Similar product quality Market share competition Possibility of price competition 01/08/11 Author:Shahina Perveen
  10. 10. COMPETITIVE PROFILE MATRIX 01/08/11 Author:Shahina Perveen Starbuck Procter Gamble Philip Morris Nestle Critical success Factors Weight Rating Score Rating Score Rating Score Rating Score Advertising 0.10 1 0.10 3 0.30 3 0.30 3 0.30 Product Quality 0.20 2 0.40 1 0.20 1 0.20 1 0.20 Price Competition 0.05 2 0.10 2 0.10 2 0.10 1 0.10 Management 0.10 3 0.30 3 0.30 3 0.30 4 0.40 Financial position 0.10 3 0.30 4 0.40 4 0.40 4 0.40 Customer Loyalty 0.15 2 0.30 1 0.15 1 0.15 1 0.15 Global Expansion 0.15 4 0.60 4 0.60 4 0.60 4 0.60 Market Share 0.15 3 0.45 4 0.60 4 0.60 4 0.60 Total 1.00 2.55 2.65 2.65 2.75 Rating values 1= major weakness 2=minor weakness 3=minor strength 4=major strength
  11. 11. GMCR FINANCIAL POSITION 01/08/11 Author:Shahina Perveen Fiscal Yr 30-Sep-00 25-Sep-99 26-Sep-98 27-Sep-97 28-Sep-96 Profitability Ratio Total Assets Turnover 3.09 2.717 2.27 1.822 1.935 Return on Total Assets 0.1528 0.0941 0.0138 0.0653 0.0838 Growth Ratio Sales coffee lb 20.73% 16.37% 24.07% 22.17% Sales in $ 29.40% 16.22% 30.00% 28.00% Net Income 29.00% 16.00% 30.00% 28.00% Earning per share 85.93% 540.00% -0.77% 4.70% Assets 13.80% -2.78% 4.33% 36.54%
  12. 12. INTERNAL FACTOR EVALUATION MATRIX 01/08/11 Author:Shahina Perveen Key Internal Factors Weight Rating Weighted Score Internal Strength One of leading company in established mkt 0.05 3 0.15 Quality of Product 0.10 4 0.40 Large Varieties 0.05 3 0.15 High Technology use 0.10 4 0.40 Longer shelf life of product 0.10 4 0.40 Customer brand loyalty 0.10 4 0.40 Social Responsible Practices 0.05 4 0.40 Brand Awareness 0.10 4 0.40 Internal Weakness Past Failure in Strategic Decision 0.02 2 0.04 Narrow Concentration of the market segment 0.10 1 0.10 Inappropriate strategic vision 0.05 1 0.05 Little Brand Presence 0.08 1 0.08 Few Strategic Alliances 0.10 1 0.10 1.00 3.07 Weight-= 0.0(not important) -1.0(very important) 1= major weakness 2=minor weakness 3=minor strength 4=major strength
  13. 13. EXTERNAL FACTOR EVALUATION MATRIX 01/08/11 Author:Shahina Perveen Key External Factors Weight Rating Weighted Score Opportunities Global market typically untapped 0.15 1 0.15 Increasing in the growth of Industry 0.15 2 0.3 Quality considered important by consumers 0.10 3 0.3 Increasing trend of Specialty Coffee drinkers 0.15 3 0.45 Growing no of coffee houses 0.15 3 0.45 Threats Value Migration from U.S 0.10 1 0.1 shift in consumer priority 0.10 2 0.2 increasing size of competitors 0.05 2 0.1 presence of Highly recognized brands 0.05 2 0.1 Total Score 1.00 2.15 Weight-= 0.0(not important) -1.0(very important) 4=response is superior 3=response is above average 2=response is average 1=response is poor
  14. 14. SWOT MATRIX FOR GMCR 01/08/11 Author:Shahina Perveen Strength-S Weakness-W leading company in established mkt Past Failure in Strategic Decision Quality of Product Narrow Concentration of the market segment Large Varieties Inappropriate strategic vision High Technology use Little Brand Presence Longer shelf life of product Few Strategic Alliances Customer brand loyalty Social Responsible Practices Brand Awareness Opportunities-O SO Strategies WO Strategies Global market typically untapped 1.Use Brand Image, Quality and SRP to penetrate International market 2.Use Brand Image, Quality and SRP to increase market share in the present market and target potential segments 1. Explore international Market using strategic alliances with different channel of whole sales account. 2.Penetrate market and try to capture share by creating alliance and creating brand presence Increasing in the growth of Industry Quality considered important by consumers Increasing trend of Specialty Coffee drinkers Growing no of coffee houses Threats-T ST Strategies WT Strategies Value Migration from U.S 1.Use Brand recognition to compete with major competitors and use high quality image of product to capture the present market share using SRP 1.Research viability of entering foreign market and creating appropriate vision and strategic goal to capture present market share by targeting market niche shift in consumer priority increasing size of competitors presence of Highly recognize brands
  15. 15. Exploring international market using and retaining and exploring the current market Explore international Market using strategic alliances with different channel. Penetrate present market and try to capture share using whole sale approach Use present strength to compete with competitors coping their retailing approach . Entering foreign market using multi channel distribution approach and capturing market share IDENTIFICATION OF ALTERNATIVES 01/08/11 Author:Shahina Perveen
  16. 16. Advantage Huge Opportunity Large market Future Growth Disadvantage Huge risk Huge Finance More Competition ALTERNATIVES EVALUATION Exploring international market using and retaining and exploring the current market Explore international Market using strategic alliances with different channel. Advantage Huge Opportunity Large market Future Growth Disadvantage Loss of Control Threat of forward Integration Lost of Brand Image 01/08/11 Author:Shahina Perveen
  17. 17. Advantage Definite Strategic Success Low Risk High profit in Market Niche Disadvantage Small Market Lost of Window of opportunity INT More Competition for small mkt segment ALTERNATIVES EVALUATION 01/08/11 Penetrate present market and try to capture share using whole sale approach Use present strength to compete with competitors coping their retailing approach . Advantage Capturing Immediate consumers High Profit margin Potential market leadership Disadvantage Loss of Control Lost of Management control Huge Finance required Lost of Brand Image Author:Shahina Perveen
  18. 18. Advantage Huge Market High profit Strengthen Brand Image internationally Disadvantage High risk Lost of management control More Competition ALTERNATIVES EVALUATION 01/08/11 Entering foreign market using multi channel distribution approach and capturing market share Criteria for Selecting Alternatives Increase Growth Increase Market Share Brand Image Recognition Author:Shahina Perveen
  19. 19. CORPORATE STRATEGY Exploring INT market and retaining the current market Objective Most Recognize and Respected Brand World Wide International Strategy U.S Strategy International Strategy Wholesale Account supermarket specialty food store Convenience Store whole bean/ ground brew coffee/ coffee beverage restaurant university travel/office service food service hotel Strategic Alliances brew coffee/ coffee beverage Franchising 01/08/11 Author:Shahina Perveen
  20. 20. CORPORATE STRATEGY US Strategy Wholesale Account supermarket specialty food store Convenience Store whole bean/ ground university travel/office service food service hotel Strategic Alliances brew coffee/ coffee beverage Franchising brew coffee/ coffee beverage supermarket Convenience Store supermarket Convenience Store 01/08/11 Author:Shahina Perveen
  21. 21. Marketing Strategy Financial Strategy Supply Chain Strategy HR Strategy IMPLEMENTATION OF STRATEGY 01/08/11 Author:Shahina Perveen
  22. 22. APPENDICES
  23. 23. APPENDICES 01/08/11 Author:Shahina Perveen Ex-1Wholesale Coffee Pound by Region Region 53 wks ended 9/30/00 52 wks ended 9/25/99 Full yr Y/Y lb.increses Full yr Y/Y lb.increass N.New england 33.2% 36.4% 338,000 10.7% S.New england 24.5 24.2 478,000 22.7 Mid-Atlantic 24.8 20.8 488,000 27.0 South Atlantic 6.9 5.3 257,000 55.2 Midwest 2.5 1.9 101,000 60.5 s.central west 2.1 1.4 102,000 81.6 Multi regional 7.9 9.1 29,000 3.6 International 1.1 0.8 39.000 54.2 Totals 10546,000 8,714,000 1,832,000 21
  24. 24. APPENDICES 01/08/11 Author:Shahina Perveen Exhibit 2 GMCR Financial Data Fiscal Yr 30-Sep-00 25-Sep-99 26-Sep-98 27-Sep-97 28-Sep-96 Coffee lb sold 10871 9004 7739 6239 5108 Net Sales $84,001 $64,881 $55,825 $42,908 $33,377 Income from operation $4,153 $2,247 $340 $1,539 $1,429 Income per share from operation 1.19 0.64 0.1 0.44 0.42 Total Assest $27,174 $23,878 $24,563 $23,544 $17,243

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