Full Strategic Analysis Of Caribou Coffee Company Inc Marketing Essay

Full Strategic compend Of reindeer cocoa Company Inc Marketing Essaycaribou java berry Incl commonly know as CBOU.O is a company specializing in retail of teas, cocoa bakeho hold goods and some other related yields. Since it inception in 1992, the upstanding operates in unhomogeneous reportable divisions which include commercialized, retail and franchise melodic linees. Retail segment contain of about 400 of the chalk up coffee establishment and centralizees on the local anesthetic merchandise. These cite stores atomic descend 18 based in manganese and over 20 other store in major states where CBOU.O operates. Commercial segment focuses on mass merchandisers while the franchise logical argument which comprises of about 19% of the total coffee houses targets the international securities persistence. reindeer Incl operates in international and local marketplaces as healthy with a bout 510 coffeehouses (Perry 2003, p. 46). Addition every(prenominal)y, the pro fligate supplies its products to diverse clientele groups such(prenominal) as grocery stores, hotels, airlines, mass merchandisers, entertainment venues, offices and colleges among other clients. caribou c ar main goal is directed towards providing high quality coffee blends and other related products to its clients.Key to their attractive strategy, CBOU.O has vigorous designed outlets which resemble locomote lodges and charge Alaskan cabins, which pop the question the aims a range of coffee blends, or even long suit teas, coffee drinks and baked goods. In articulate to embellish on its distribution chain CBOU.O sells both brewing supplies and whole noggin coffee (Hall 2005, p. 76). In addition the star sign has over coke franchised outlets which argon mostly founded in the great Middle East part as hygienic as South Korea. As per 2008 m sensationtary report, 60% of the caribou coffee bean firm is owned by Arcapita, a Bahrain-based investment faction. CBOU.O has put down positive fruit in history of gourmet coffee attention amid competition from Kraft Foods Inc., Starbucks Corpo dimensionn, Proctor guess and Nestle Inc.1.10 Company AnalysisCBOU.O is not immune to persistence macro as well as micro calculates influencing line of reasoning performance levels. The wider line of job environment has created both fortune and challenges to CBOU.Os performance in coffee industry. The volume of coffeehouse chains has growing in the recent past with the bran-new starters in the renowned distinguishing characteristic product category. For instance, the external environment in the industry has been hit by high competition with great impacts felt the period between fiscal 1998 and 2003 (Hoskisson Hitt 2008, p. 96). The industry has likewise presented a new wave of demographics shift where materialisation adults easily indentify with coffee products. With greater cultural influence in the contradictory markets, decaffeinated coffee has easily being marketed in delimitate global market niche. Similarly, in coffee industry market trends retain also labored leading firms to leverage their brand names into non-homogeneous(a) categories in an begin to grow greater sales.1.11 PESTEL AnalysisSocial factorsSocial trends has impacted CBOU.Os marketing, RD activities, rebranding procedure, market ingress strategies, employees motivation and the firms course units performances. CBOU.O has been influenced by mixed factors including changing demographics, family changes, consumer expectations and unhomogeneous cultural changes (Perry 2003, p. 89). The firm has witnessed a shift in consumer habits in versatile markets where brand switching has been popularized by the existence of a variety of specialness products offered by similar players in the market. Due to the perceived change in consumer expectations CBOU.O has been constantly extending their product-line to include various coffee versions in the market. For instance, decaffeinated coffee has been an entrant in various market niches as a deliberate causal agent to avert brand switch to other alternative beverages. This has been mainly instigated by cultural preferences. Similarly, the changing demographics in both global as well as local market rich person influenced CBOU.O business activities. For example, between fiscal 2003 and 2006, adults aged between 18 and 24 who took coffee daily multiply in percentage and crossed over 30 % mark as per the NCAs (i.e. National chocolate Association) data (Perry 2003, p. 193). The young adult drinking style/habits has and will continue influencing reindeer java consumption since this age hold constitute the long-life coffee drinkers as they enter proterozoic adulthood. The youngsters demographics are vital to CBOU.O since they are likely to favor coffee to other old(prenominal) whacky drinks in future.Political forcesGovernment policy in monetary value of degree of frugal interventio n has greatly influenced CBOU.O in the greater Minnesota region. Various stakeholders such as regulators and politicians impacts any industry in wrong of workforce safety issues, firms subsidies, quality infrastructure and business supports. For example, caribou has been continually influenced by various policies linked to NCA. Like other firms, Caribou has have it awayed giving medication intervention during various difficulty economic seasons as well as on labor issue intervention. Trade barriers, among other government policies has influenced entry procedures across the 20 states stores. For instance, favorable trade policies have assisted the firm to expand and perhaps source for quality coffee (Grant 2005, p. 94).Economic factorsInflation, economic growth issues, invade rates and taxation changes has affected Caribou Coffee Company in foothold of product performance, business profitability, occupation price and firms overheads. For instance, in fiscal 2007/2008 the firm reported increase in yield be brought about by increase in related cost such as higher wage necessarys due to economic difficulties experience globally. More positive in the trend in economic growth witnessed in early 2000 that saw CBOU.O report increase in demand for various coffee products. In addition, in fiscal 2006 Lower interest made more viable for investors such as Arcapita to invest in about 60% CBOU.O since the costs associated with borrowing was too low. Finally, economic difficulties witnessed in late 2000 saw CBOU.O resulting into franchise arrangement for synergy reasons.Technological factors technology has helped CBOU.O to remain ahead in business communication, business and innovation. For example, technology has boosted the firms egg on in online marketing and related business activities in CBOU.Os official website. cultivation processing system aided systems has assisted the firm in quality control and production regulations as a deliberate unravel in reduc ing related production costs. Online marketing as well as trading information supported by the firms website has put CBOU.O ahead of competition.Legal ForcesCBOU.O has been influenced by the various consumer laws protecting clients against unfair pricing practices and any misleading beverage description. down the stairs the Caribou management practices, employment laws have affected the business rise in areas such as redundancy, minimum wage, working hours and dismissal issues.environmental factorsFactors such as national weather and the perceived global modality change influence consumer patterns (Porter 1998, p.72). Changes in temperature, especially during winters increase the likelihood of coffee consumption and high profitability during this spell. CBOU.O has in the past recorded greater sales during winters than the case with summer performance. Currently, the global environmental issues as well as the growing desire on corporate responsibility on the nature have influenced business opportunities in the new markets. Such environmental trends have influenced Caribous demand patterns and the global opportunities (Perry 2003, p. 103).1.12 Porters Five ForcesRivalryRivalry lastingness has been greatly increased by low switching costs where consumers send away easily switch from particular long suit coffee product, thus do it heavily to capture greater market proportion. The ever growing number of specialty coffee products has intensified rivalry. Recent development in terms of consumer habits in coffee industry has resulted into struggle for available market share. Similarly, industry shakeout influences rivalry witnessed in various industries (Porter 1998, p. 43). High level of products differentiation has resulted into greater rivalry forcing CBOU.O to extend its product-line. The firm mensesly offers whole bean coffee and specialty teas, as a differentiated approach in competing in the market.Threats of substitutesCoffee products offered by other players such as Proctor Gamble or even Starbucks Corporation at a competing price offer a brat to CBOU.O specialty coffee products, thus making it hard for the firm to raise prices for profitability reasons. Health concerns have influenced the consumption levels of specialty coffee as a substitute to other highly priced soft beverages. For example, Starbucks Power Frappuccino has been a big threat to Caribous due to its price espresso-based beverages.buyer PowerThe firms buyers have contributed to the Caribous performance by determining the firms profitability levels. The buyers have the ability to influence the business performance by affecting the business ability in offering quality specialty coffee. Similarly, the buyers power has influenced Caribous business strategy where the management has been concentrating in offering all-time coffee products to the consumers in anticipation.Supplier powerCoffee suppliers has been very influential on Caribous production ability where shor tfall in coffee supplies to the coffeehouses is closely associated with declined ability of the firm to acquire the supplies as per the price offered. The suppliers are potentially able to exert influence on the firm since much of the cranky materials as well as related supplies are sourced at a price which this instant affects the resulting business profitability (Porter 1998, p. 116).Barriers to entryThe possibility that the number of new entrants in the industry may increase poses a threat to Caribous rivalrousness .Caribous has been constantly employing strategies such as franchise arrangement as a key measure to avert affirmable entry in the market. In contingent situations Caribous has been employing entry-deterring pricing as a key strategy in preventing possible entrants in the industry. As a strategy to remain more competitive, Caribou enjoys the benefits associated with their production capacity (i.e. proprietary knowledge) in manufacture of various specialty coffee products (Daniel Lamb 2008, p. 125).Life Cycle Analysis (LCA)CBOU.O considers LCA in identify to indentify areas area for vital improvements in environment, marketing as well as in support of how the coffeehouses products are environmental friendly. All coffee products have some noticeable impacts on our environmental and therefore CBOU.O uses LCA to manage issues such as pollution, in grade to reduce environmental harm. In CBOU.O the LCA starts with raw material sourcing where quality coffee as the prime raw materials are bought from indentified suppliers. In the Manufacturing phase, CBOU.O ensures clear procedures are utilise in cast to diminish unnecessary pollution from. The packaging phase in the LCA is highly considered in order to reflect the marketing philosophy of Caribou firm by including the business logo or even the company brand name. The firm marketing is extensively done and thus places Caribou ahead of other players in product communication in all the three bus iness units. In the use, maintenance and reuse phase, Caribou considers clear policies on Coffee mugs or related packaging are used in order to reduce unnecessary costs associated with environmental impacts. Finally, in the recycle phase, Caribou uses clear policies that ensure that various packages are reused for intended purposes (Grant 2005, p. 278).SWOT Opportunities and Threats somewhat of the opportunities in the Caribou movements that give the firm segment a competitive advantage includes venture into international market and developing business arrangement such as franchise. The franchise arrangement has helped most Caribou to maintain a competitive edge despite the unfavorable market forces brought about by hard-economic environment (Grimm 2006, p 233). Developing of Decaffeinated coffee has been one of the strongest opportunities well utilized by CBOU.O in the recent past. Similarly, CBOU.O faces greater threat from stiff competition witnessed from major competitors. Simi larly, upcoming considerations by governments to tax the coffee industry poses as a key threat for most firms. chassis IIGeneric strategiesCaribou firm has developed various generic strategies in order countercheck the analyzed Porters forces at business unit level, corporate level as well as functional level. For competitive advantage reasons, Caribou has indentified various products namely focus, differentiated product and the cost leadership coffee products at business unit level. The firms business units which entails the retail chains, commercial segment and the franchise segment has placed products such as whole bean coffee and the specialty tea on the costs leadership level. Additionally, Caribou has been constantly included differentiated products such as espresso-based beverages in order to counteract the rivalry evidenced in early 2000s. Caribou has used the commercial segment as the sole focus in selling various products to hotels, entertainment venues, grocery stores, a irlines or even to the offices in the major regional chains (Perry 2003, p. 136).Market segmentationInitially, adults were associated with Coffee drinking until the recent witnessed shifts in the consumer behaviors brought about by the Generation X and Y. The changes associated with this generations has forced to Caribou to redesign its product line in order to attract the growing number of young adults who have indicated interest in the firms coffee products. For example, Caribou resulted in single-serving system in mid 2000 in order to ensure that target consumer are able to access splendid coffee at designated pods in hotels, entertainment venues or even in major stores in Minnesota (Perry 2003, p. 113). Baby boomers who normally switch to better coffee products forced Caribou to introduce decaffeinated coffee in the stores. This transit was enabled by the firms aided technological processes which usually improves decaffeinated coffee flavors to suit the various generations co nsiderations.Core competencies and Generic Value ChainCore competencies help Caribou in retaining its competitive nature by ensuring that the bond between various units is strengthened thus offering coherent portfolio. Caribou core might level is premised on the provision to access variety of product in either retail markets or even at franchise level (Hoskisson Hitt 2008, p. 97). Caribou has been using procedures as well as practices in manufacturing which are basically hard to imitate in production of products such as specialty teas or even other branded merchandise. The firm has also exhibited strong capacity in RD where deliberate efforts has been made in alter the firms ability to on a lower floorstand and cater for upping interest in Coffee industry markets. As a core competency strategy, CBOU.O has ensured shared costs in business units in order to remain ever profitable. For instance, the firm increases the franchised business units under shared costs between the retail stores and the commercial business segment.CBOU.O value chain entails inbound logistics, outbound logistics, operations, marketing and sales processes, and the operations activities. For example, CBOU.O ensures that inbound activities such as Coffee sourcing, warehousing and division logistics are clearly conducted. Caribou operation activities are normally aligned to the defined production formulas and processes during product preparation. The marketing and sales undertaking in the firm has been liftd by greater innovations in meeting the ever changing demographic demand. Finally, the outbound activities has bee made possibly by the wider distribution screen background done under retail stores, franchise segment or commercial units.Ansolffs Matrix and Porters DiamondCaribou market penetration procedures are used in securing market dominance, in restructuring markets, increase Coffee usage among consumers and in raising market share of core products in various chains. Caribou has aroused its market development procedures by ensuring that the business able to in effect locate new geographical location for new stores, or new distribution channels or pricing strategies in order to enhance market growth on products such as baked goods. reaping diversification has been used to modify various branded merchandise offered by the firm (Grant 2005, p. 423). Caribou has been diversifying its products in various segments by use of rebranding procedures.Porters baseball field model has been employed by CBUO.O to enhance competitiveness by change firms strategy, structure and efficaciously handling rivalry issues. The firms culture, lean structure and operation motivation boosts the firms competitive advantage. When handling demand conditions, Caribous RD ensures that local demand needs/capacity is satisfied by quality specialty coffee products forward to meeting other states demand. This gives local stores competitive advantage. Caribou create its factor condition s by having skilled workforce and improved technology in order to remain competitive. Similarly, factor combination during manufacturing has boosted Caribous performance as well. Under accompaniment and related industry considerations, Caribou operates in global chains under commercial and retail stores in order to support the franchise unit. Caribou uses the business units to organize and supplement innovation in the structure value. financial AnalysisCurrent ratio for CBOU.O eagle Incl is noted to be change magnitude from a figure of 0.88in fiscal 2007 to lows of 0.72in 2008.This trend is alarming as it indicates subside in ability of CBOU.O to cover its short-term debts using the available current assets. Gross-profit is increasing from lows of 47.0% in 2007 to 51.36 in 2008. The trend is positive as it indicates CBUO.O move in earnings increase. Return-on-assets ratio shows Caribous earnings in relation to all the economic resources owned by the company (Peterson Fabozzi, p. 146). Return-on equity is decreasing from fiscal 2007 ratio calculations. The trend is electronegative. The trend on Return-on-equity portrayed from 2007 to fiscal 2008 is negative indicating a decrease in returns for the ordinary and /or common stock-holders. physique III RecommendationsCBOU.O should consider seeking global opportunities in order to counteract stiff competition and perhaps increase in profitability. In situations where prerogative fails in foreign market, CBOU.O should result into Mergers or acquisitions in order to enjoy currency benefits associated with global market thus averting economic set up on performance. To avert rivalry, CBOU.O ought to continuously improve on existing product chains and enhance brand extension procedures.CBOU.O ought to increase their investment in current assets to boost the companys financial position. A company should cover its short-term obligations at least twice from their investment in current assets. CBOU.O should increase the efficiency in the use of economic resources at their disposal to enhance the firm long-term profitability. Similarly, CBOU.O should also increase efficiency in the use of assets. Finally, more investment should be carried out in total assets to effectively cover the firms debts.Appendices A Caribou Coffee Company Important kink Analysis RatiosRatio type20082007Current Ratio=(Current assets/current liabilities28,450,000/32,260,000 = 0.8826,620,000/36,820,000= 0.72Gross-profit ratio=(Gross -profit/sale)*100(119,460,000/253,900,000)* 100= 47.0%(131,910,000/256,830,000)* 100=51.36%Return-on- assets=(net-profit before interest/total assets)*100(15,460,000/89,570,000)* 100= (17.26)%(30,400,000/111,840,000)*100= (27.18)%Return-on-equity=(Net income/equity)*100(16,280,000/43,940,000)= (37.0)%(30,500,00/59,290,000)* 100=(51.44)%