Tuesday, January 28, 2020

Coffee and Starbucks Essay Example for Free

Coffee and Starbucks Essay had enjoyed phenomenal growth and become one of the great retailing stories of recent history by making exceptional coffee drinks and selling dark-roasted coffee beans and coffee-making equipment that would allow customers to brew an exceptional cup of coffee at home. The Starbucks brand was regarded as one of the best known and most potent brand names in America and the company had firmly established itself as the dominant retailer, roaster, and brand of specialty coffee in North America. It already had over 1,500 stores in North America and the Pacific Rim and was opening new ones at a rate of more than one per day. Sales in fiscal year 1997 were a record $967 million and profits reached an all-time high of $57. 4 million. The companys closest competitor had fewer than 300 retail locations. And since going public in 1992, Starbucks has seen its stock price increase nearly ninefold. Exhibit 1 contains a summary of Starbucks key performance statistics for the 1992–97 period. Company Background Starbucks began in 1971 when three academics—English teacher Jerry Baldwin, history teacher Zev Siegel, and writer Gordon Bowker—opened a store called Starbucks Coffee, Tea, and Spice in the touristy Pikes Place Market in Seattle. The three partners shared a love of fine coffees and exotic teas and believed they could build a clientele in Seattle much like that which had already emerged in the San Francisco Bay area. Each invested $1,350 and borrowed another $5,000 from a bank to open the Pikes Place store. Baldwin, Siegel, and Bowker chose the name Starbucks in honor of Starbuck, the coffee-loving first mate in Herman Melvilles Moby Dick(so company legend has it), and because they thought the name evoked the romance of the high seas and the seafaring tradition of the early coffee traders. The new companys logo, designed by an artist friend, was a two-tailed mermaid encircled by the stores name. The inspiration for the Starbucks enterprise was a Dutch immigrant, Alfred Peet, who had begun importing fine arabica coffees into the United States during the 1950s. Peet viewed coffee as a fine winemaker views grapes, appraising it in terms of country of origin, estates, and harvests. Peet had opened a small store, Peets Coffee and Tea, in Berkeley, California, in 1966 and had cultivated a loyal clientele. Peets store specialized in importing fine coffees and teas, dark-roasting its own beans the European way to bring out their full flavor, and teaching customers how to grind the beans and make freshly brewed coffee at home. Baldwin, Siegel, and Bowker were well acquainted with Peets expertise, having visited his store on numerous occasions and spent many hours listening to Peet expound on quality coffees and the importance of proper bean-roasting techniques. All three were devoted fans of Peet and his dark-roasted coffees, going so far as to order their personal coffee supplies by mail from Peets. The Pikes Place store featured modest, hand-built nautical fixtures. One wall was devoted to whole-bean coffees; another had shelves of coffee products. The store did not offer fresh-brewed coffee by the cup, but samples were sometimes available for tasting. Initially, Siegel was the only paid employee. He wore a grocers apron, scooped out beans for customers, extolled the virtues of fine, dark-roasted coffees, and functioned as the partnerships retail expert. The other two partners kept their day jobs but came by at lunch or after work to help out. During the start-up period, Baldwin kept the books and developed a growing knowledge of coffee; Bowker served as the magic, mystery, and romance man. 1 The store was an immediate success, with sales exceeding expectations, partly because of a favorable article in the Seattle Times. In the early months, each of the founders traveled to Berkeley to learn more about coffee roasting from their mentor, Alfred Peet, who urged them to keep deepening their knowledge of coffees and teas. For most of the first year, Starbucks ordered its coffee beans from Peets, but then the partners purchased a used roaster from Holland and set up roasting operations in a nearby ramshackle building. Baldwin and Bowker experimented with Alfred Peets roasting procedures and came up with their own blends and flavors. A second Starbucks store was opened in 1972. By the early 1980s, the company had four Starbucks stores in the Seattle area and could boast of having been profitable every year since opening its doors. But the roles and responsibilities of the cofounders underwent change. Zev Siegel experienced burnout and left the company to pursue other interests. Jerry Baldwin took over day-to-day management of the company and functioned as chief executive officer; Gordon Bowker remained involved as an owner but devoted most of his time to his advertising and design firm, a weekly newspaper he had founded, and a microbrewery he was launching (the Redhook Ale Brewery). Howard Schultz Enters the Picture In 1981, Howard Schultz, vice president and general manager of U. S. operations for Hammarplast—a Swedish maker of stylish kitchen equipment and housewares—noticed that Starbucks was placing larger orders than Macys was for a certain type of drip coffeemaker. Curious to learn what was going on, he decided to pay the company a visit. The morning after his arrival in Seattle, Schultz was escorted to the Pikes Place store by Linda Grossman, the retail merchandising manager for Starbucks. A solo violinist was playing Mozart at the door, with his violin case open for donations. Schultz immediately was taken by the powerful and pleasing aroma of the coffees, the wall displaying coffee beans, and the rows of red, yellow, and black Hammarplast coffeemakers on the shelves. As he talked with the clerk behind the counter, the clerk scooped out some Sumatran coffee beans, ground them, put the grounds in a cone filter, poured hot water over the cone, and shortly handed Schultz a porcelain mug filled with the freshly brewed coffee. After three sips, Schultz was hooked. He began asking the clerk and Grossman questions about the company, about coffees from different parts of the world, and about the different ways of roasting coffee. Next, Schultz met with Jerry Baldwin and Gordon Bowker, whose offices overlooked the companys coffee-roasting operation. The atmosphere was informal. Baldwin, dressed in a sweater and tie, showed Schultz some new beans that had just come in from Java and suggested they try a sample. Baldwin did the brewing himself, using a glass pot called a French press. Bowker, a slender, bearded man with dark hair and intense brown eyes, appeared at the door and the three men sat down to talk about Starbucks. Schultz was struck by their knowledge of coffee, their commitment to providing high-quality products, and their passion for educating customers about the merits of dark-roasted coffees. Baldwin told Schultz, We dont manage the business to maximize anything other than the quality of the coffee. 2 Starbucks purchased only the finest arabica coffees and put them through a meticulous dark-roasting process to bring out their full flavors. Baldwin explained that the cheap robusta coffees used in supermarket blends burn when subjected to dark roasting. He also noted that the makers of supermarket blends prefer lighter roasts because they allow higher yields (the longer a coffee is roasted, the more weight it loses). Schultz was struck by the business philosophy of the two partners. It was clear from their discussions that Starbucks stood not just for good coffee, but rather for the dark-roasted flavor profiles that the founders were passionate about. Top-quality, fresh-roasted, whole-bean coffee was the companys differentiating feature and a bedrock value. It was also clear to Schultz that Starbucks was strongly committed to educating its customers to appreciate the qualities of fine coffees, rather than just kowtowing to mass-market appeal. The company depended mainly on word-of-mouth to get more people into its stores, then relied on the caliber of its product to give patrons a sense of discovery and excitement. It built customer loyalty cup by cup as buyers of its products developed their palates. On his trip back to New York the next day, Howard Schultz could not stop thinking about Starbucks and what it would be like to be a part of the Starbucks enterprise. Schultz recalled, There was something magic about it, a passion and authenticity I had never experienced in business. 3 Living in the Seattle area also had a strong appeal. By the time Schultz landed at Kennedy Airport, he knew he wanted to go to work for Starbucks. Though there was nothing in his background (see Exhibit 2) that prepared him for the experience, Schultz asked Baldwin at the first opportunity whether there was any way he could fit into Starbucks. The two quickly established an easy, comfortable rapport, but it still took a year of numerous meetings and a lot of convincing to get Baldwin, Bowker, and their silent partner from San Francisco to agree to hire Howard Schultz. Schultz pursued a job at Starbucks far more vigorously than Starbucks pursued him. There was some nervousness at Starbucks about bringing in an outsider, especially a high-powered New Yorker, who had not grown up with the values of the company. Nonetheless, Schultz continued to press his ideas about the tremendous potential of expanding the Starbucks enterprise outside Seattle and exposing people all over America to Starbucks coffee—arguing there had to be more than just a few thousand coffee lovers in Seattle who would like the companys products. Schultz believed that Starbucks had such great promise that he offered to take a salary cut in exchange for a small equity stake in the business. But the owners worried that by offering Schultz a job as head of marketing they would be committing themselves to a new direction for Starbucks. At a spring 1982 meeting with the three owners in San Francisco, Schultz once again presented his vision for opening Starbucks stores across the United States and Canada. He flew back to New York thinking a job offer was in the bag. But the next day Baldwin called Schultz and indicated that the owners had decided against hiring him because geographic expansion was too risky and because they did not share Schultzs vision for Starbucks. Schultz was despondent; still, he believed so deeply in Starbucks potential that he decided to make a last-ditch appeal. He called Baldwin back the next day and made an impassioned, though reasoned, case for why the decision was a mistake. Baldwin agreed to reconsider. The next morning Baldwin called Schultz and told him the job of heading marketing and overseeing the retail stores was his. In September 1982, Howard Schultz took on his new responsibilities at Starbucks. Starbucks and Howard Schultz: The 1982–85 Period In his first few months at Starbucks, Schultz spent most of his waking hours in the four Seattle stores—working behind the counters, tasting different kinds of coffee, talking with customers, getting to know store personnel, and educating himself about the retail aspects of the coffee business. By December, Jerry Baldwin decided that Schultz was ready for the final part of his training—roasting coffee. Schultz spent a week at the roaster examining the color of the beans, listening for the telltale second pop of the beans during the roasting process, learning to taste the subtle differences among Baldwin and Bowkers various roasts, and familiarizing himself with the roasting techniques for different beans. Meanwhile, he made a point of acclimating himself to the informal dress code, blending in with the culture, and gaining credibility and building trust with colleagues. Making the transition from the high-energy, coat-and-tie style of New York to the more casual ambience of the Pacific Northwest required a conscious effort on Schultzs part. One day during the busy Christmas season that first year, Schultz made real headway in gaining the acceptance and respect of company personnel at the Pikes Place store. The store was packed and Schultz was behind the counter ringing up sales when someone shouted that a customer had just headed out the door with some stuff—two expensive coffeemakers it turned out, one in each hand. Without thinking, Schultz leaped over the counter and chased the thief up the cobblestone street outside the store, yelling Drop that stuff! Drop it! The thief was startled enough to drop both pieces and run away. Schultz picked up the merchandise and returned to the store, holding up the coffeemakers like trophies. Everyone applauded. When Schultz returned to his office later that afternoon, his staff had strung up a banner that read Make my day. 4 Schultz was overflowing with ideas for the company. Early on, he noticed that first-time customers sometimes felt uneasy in the stores because of their lack of knowledge about fine coffees and because store employees sometimes came across as a little arrogant. Schultz worked with store employees on developing customer-friendly sales skills and produced brochures that made it easy for customers to learn about fine coffees. Schultzs biggest idea for Starbucks future came during the spring of 1983 when the company sent him to Milan, Italy, to attend an international housewares show. While walking from his hotel to the convention center, Schultz spotted an espresso bar and went inside to look around. The cashier beside the door nodded and smiled. The barista (counter worker) greeted Howard cheerfully, then gracefully pulled a shot of espresso for one customer and handcrafted a foamy cappuccino for another, all the while conversing merrily with those standing at the counter. Schultz judged the baristas performance as great theater. Just down the way on a side street, he entered an even more crowded espresso bar, where the barista, whom he surmised to be the owner, was greeting customers by name; people were laughing and talking in an atmosphere that plainly was comfortable and familiar. In the next few blocks, he saw two more espresso bars. When the trade show concluded for the day, Schultz walked the streets of Milan exploring espresso bars. Some were stylish and upscale; others attracted a blue-collar clientele. What struck Schultz was how popular and vibrant the Italian coffee bars were. Most had few chairs, and it was common for Italian opera to be playing in the background. Energy levels were typically high, and the bars seemed to function as an integral community gathering place. Each one had its own unique character, but they all had a barista who performed with flair and exhibited a camaraderie with the customers. Schultz was particularly struck by the fact that there were 1,500 coffee bars in Milan, a city about the size of Philadelphia, and a total of 200,000 in all of Italy. His mind started churning. Schultzs first few days in Milan produced a revelation: The Starbucks stores in Seattle completely missed the point. Starbucks, he decided, needed to serve fresh-brewed coffee, espresso, and cappuccino in its stores (in addition to beans and coffee equipment). Going to Starbucks should be an experience, a special treat; the stores should be a place to meet friends and visit. Re-creating the Italian coffee-bar culture in the United States could be Starbucks differentiating factor. Schultz remained in Milan for a week, exploring coffee bars and learning as much as he could about the Italian passion for coffee drinks. In one bar, he heard a customer order a caffe latte and decided to try one himself—the barista made a shot of espresso, steamed a frothy pitcher of milk, poured the two together in a cup, and put a dollop of foam on the top. Schultz concluded that it was the perfect drink, and thought to himself, No one in America knows about this. Ive got to take it back with me. 5 Schultzs Growing Frustration On Schultzs return from Italy, he shared his revelation and ideas for modifying the format of Starbucks stores with Baldwin and Bowker. But instead of winning their approval, Schultz encountered strong resistance. Baldwin and Bowker argued that Starbucks was a retailer, not a restaurant or bar. They feared that serving drinks would put them in the beverage business and dilute the integrity of Starbucks mission as a coffee store. They pointed out that Starbucks was a profitable small, private company and there was no reason to rock the boat. But a more pressing reason for their resistance emerged shortly—Baldwin and Bowker were excited by an opportunity to purchase Peets Coffee and Tea. The acquisition took place in 1984; to fund it, Starbucks had to take on considerable debt, leaving little in the way of financial flexibility to support Schultzs ideas for entering the beverage part of the coffee business or expanding the number of Starbucks stores. For most of 1984, Starbucks managers were dividing their time between their operations in Seattle and the Peets enterprise in San Francisco. Schultz found himself in San Francisco every other week supervising the marketing and operations of the five Peets stores. Starbucks employees began to feel neglected and, in one quarter, did not receive their usual bonus due to tight financial conditions. Employee discontent escalated to the point where a union election was called, and the union won by three votes. Baldwin was shocked at the results, concluding that employees no longer trusted him. In the months that followed, he began to spend more of his energy on the Peets operation in San Francisco. It took Howard Schultz nearly a year to convince Jerry Baldwin to let him test an espresso bar. After Baldwin relented, Starbucks sixth store, which opened in April 1984, became the first one designed to sell beverages and the first one in downtown Seattle. Schultz asked for a 1,500-square-foot space to set up a full-scale Italian-style espresso bar, but Jerry agreed to allocating only 300 square feet in a corner of the new store. There was no pre-opening marketing blitz and no sign announcing Now Serving Espresso—the lack of fanfare was part of a deliberate experiment to see what would happen. By closing time on the first day, some 400 customers had been served, well above the 250-customer average of Starbucks best-performing stores. Within two months the store was serving 800 customers per day. The two baristas could not keep up with orders during the early morning hours, resulting in lines outside the door onto the sidewalk. Most of the business was at the espresso counter; sales at the regular retail counter were only adequate. Schultz was elated by the test results; his visits to the store indicated that it was becoming a gathering place and that customers were pleased with the beverages being served. Schultz expected that Baldwins doubts about entering the beverage side of the business would be dispelled and that he would gain approval to take Starbucks to a new level. Every day he went into Baldwins office to show him the sales figures and customer counts at the new downtown store. But Baldwin was not comfortable with the success of the new store; he believed that espresso drinks were a distraction from the core business of selling fine arabica coffees at retail and rebelled at the thought that people would see Starbucks as a place to get a quick cup of coffee to go. He adamantly told Schultz, Were coffee roasters. I dont want to be in the restaurant business . . . Besides, were too deeply in debt to consider pursuing this idea. 6 While he didnt deny that the experiment was succeeding, he didnt want to go forward with introducing beverages in other Starbucks stores. Schultzs efforts to persuade Baldwin to change his mind continued to meet strong resistance, although to avoid a total impasse Baldwin finally did agree to let Schultz put espresso machines in the back of two other Starbucks stores. Over the next several months, Schultz—at the age of 33—made up his mind to leave Starbucks and start his own company. His plan was to open espresso bars in high-traffic downtown locations that would emulate the friendly, energetic atmosphere he had encountered in Italian espresso bars. Schultz had become friends with a corporate lawyer, Scott Greenberg, who helped companies raise venture capital and go public. Greenberg told Schultz he believed investors would be interested in providing venture capital for the kind of company Schultz had in mind. Baldwin and Bowker, knowing how frustrated Schultz had become, supported his efforts to go out on his own and agreed to let him stay in his current job and office until definitive plans were in place. Schultz left Starbucks in late 1985. Schultzs Il Giornale Venture Ironically, as Schultz was finalizing the documents for his new company, Jerry Baldwin announced he would invest $150,000 of Starbucks money in Schultzs coffee-bar enterprise, thus becoming Schultzs first investor. Baldwin accepted Schultzs invitation to be a director of the new company, and Gordon Bowker agreed to be a part-time consultant for six months. Bowker urged Schultz to make sure that everything about the new stores—the name, the presentation, the care taken in preparing the coffee—was calculated to lead customers to expect something better than competitors offered. Bowker proposed that the new company be named Il Giornale (pronounced ill jor-nahl-ee ) Coffee Company, a suggestion that Schultz accepted. In December 1985, Bowker and Schultz made a trip to Italy during which they visited some 500 espresso bars in Milan and Verona, observing local habits, taking notes about decor and menus, snapping photographs, and videotaping baristas in action. Greenberg and Schultz then drew up plans to raise an initial $400,000 in seed capital and another $1. 25 million in equity—enough to launch at least eight espresso bars and prove the concept would work in Seattle and elsewhere. The seed capital was raised by the end of January 1986, primarily from Starbucks and two other investors who believed in Schultz and his ideas, but it took Schultz until the end of the year to raise the remaining $1. 25 million. He made presentations to 242 potential investors, 217 of whom said no. Many who heard Schultzs hour-long presentation saw coffee as a commodity business and thought that Schultzs espresso-bar concept lacked any basis for sustainable competitive advantage (no patent on dark roast, no advantage in purchasing coffee beans, no way to bar the entry of imitative competitors). Some noted that consumption of coffee had been declining since the mid-1960s, others were skeptical that people would pay $1. 50 or more for a cup of coffee, and still others were turned off by the companys hard-to-pronounce name. Being rejected by so many potential investors was disheartening (some who listened to Schultzs presentation ? didnt even bother to call him back; others refused to take his calls). Nonetheless, Schultz continued to display passion and enthusiasm in making his pitch and never doubted that his plan would work. He ended up raising $1. 65 million from about 30 investors; most of this money came from nine people, five of whom became directors of the new company. One of Howard Schultzs earliest moves during the start-up process was to hire Dave Olsen, who in 1974 had opened a coffee bar, Cafe Allegro, near the busiest entrance to the University of Washington campus. Olsen was a long-standing Starbucks customer, having discovered the quality of Starbucks coffee beans, gotten to know the owners, and worked with them to develop a custom espresso roast for use in his cafe. Olsens successful Cafe Allegro had become known for cafe au lait, a concoction equivalent to the Italian caffe latte. When Olsen heard of Schultzs plans for Il Giornale, he called Schultz and expressed an interest in being part of the new company—he was intrigued by the Italian coffee-bar concept and was looking for a more expansive career opportunity. Olsen not only had coffee expertise but also had spent 10 years in an apron behind the counter at Cafe Allegro. Schultz immediately picked up on the synergy between him and Olsen. His own strengths were in forming and communicating a vision, raising money, finding good store locations, building a brand name, and planning for growth. Olsen understood the nuts and bolts of operating a retail cafe, hiring and training baristas, and making and serving good drinks. Plus, Olsen was fun to work with. Schultz put Olsen in charge of store operations, made him the coffee conscience of the company, and gave him the authority to make sure that Il Giornale served the best coffee and espresso possible. The first Il Giornale store opened in April 1986. It had a mere 700 square feet and was located near the entrance of Seattles tallest building. The decor was Italian, the menu contained Italian words, and Italian opera music played in the background. The baristas wore white shirts and bow ties. All service was stand-up—there were no chairs. National and international papers hung from rods on the wall. By closing time on the first day, 300 customers had been served, mostly in the morning hours. Schultz and Olsen worked hard to make sure that all the details were executed perfectly. For the first few weeks, Olsen worked behind the counter during the morning rush. But while the core idea worked well, it soon became apparent that several aspects of Il Giornales format werent appropriate for Seattle. Some customers objected to the incessant opera music, others wanted a place to sit down, and many didnt understand the Italian words on the menu. These mistakes were quickly fixed, without compromising the style and elegance of the store. Within six months, Il Giornale was serving more than 1,000 customers a day and regulars had learned how to pronounce the companys name. Because most customers were in a hurry, it became apparent that speedy service was a competitive advantage. Six months after opening the first store, Il Giornale opened a second store in another downtown building. A third store was opened in Vancouver, British Columbia, in April 1987. Vancouver was chosen to test the transferability of the companys business concept outside Seattle. To reach his goal of opening 50 stores in five years, Schultz needed to dispel his investors doubts about geographic expansion. By mid-1987 sales at the three stores were equal to $1. 5 million annually. Il Giornale Acquires Starbucks In March 1987 Jerry Baldwin and Gordon Bowker decided to sell the whole Starbucks operation in Seattle—the stores, the roasting plant, and the Starbucks name. Bowker wanted to cash out his coffee-business investment to concentrate on his other enterprises; Baldwin, who was tired of commuting between Seattle and San Francisco and wrestling with the troubles created by the two parts of the company, elected to concentrate on the Peets operation. As he recalls, My wife and I had a 30-second conversation and decided to keep Peets. It was the original and it was better. 7 Schultz knew immediately that he had to buy Starbucks; his board of directors agreed. Schultz and his newly hired finance and accounting manager drew up a set of financial projections for the combined operations and a financing package that included a stock offering to Il Giornales original investors and a line of credit with local banks. While a rival plan to acquire. Starbucks was put together by another Il Giornale investor, Schultzs proposal prevailed and within weeks Schultz had raised the $3. 8 million needed to buy Starbucks. The acquisition was completed in August 1987. After the papers were signed, Schultz and Scott Greenberg walked across the street to the first Il Giornale store, ordered themselves espresso drinks, and sat at a table near the window. Greenberg placed the hundred-page business plan that had been used to raise the $3. 8 million between them and lifted his cup in a toast—We did it, they said together. 8 The new name of the combined companies was Starbucks Starbucks as a Private Company: 1987–92 The following Monday morning, Schultz returned to the Starbucks offices at the roasting plant, greeted all the familiar faces and accepted their congratulations, then called the staff together for a meeting on the roasting-plant floor. He began: All my life I have wanted to be part of a company and a group of people who share a common vision . . . I’m here today because I love this company. I love what it represents . . . I know you’re concerned . . . I promise you I will not let you down. I promise you I will not leave anyone behind . . . In five years, I want you to look back at this day and say I was there when it started. I helped build this company into something great. 9 Schultz told the group that his vision was for Starbucks to become a national company with values and guiding principles that employees could be proud of. He indicated that he wanted to include people in the decision-making process and that he would be open and honest with them. Schultz said he believed it was essential, not just an intriguing option, for a company to respect its people, to inspire them, and to share the fruits of its success with those who contributed to its long-term value. His aspiration was for Starbucks to become the most respected brand name in coffee and for the company to be admired for its corporate responsibility. In the next few days and weeks, however, Schultz came to see that the unity and morale at Starbucks had deteriorated badly in the 20 months he had been at Il Giornale. Some employees were cynical and felt unappreciated. There was a feeling that prior management had abandoned them and a wariness about what the new regime would bring. Schultz determined that he would have to make it a priority to build a new relationship of mutual respect between employees and management. The new Starbucks had a total of nine stores. The business plan Schultz had presented investors called for the new company to open 125 stores in the next five years—15 the first year, 20 the second, 25 the third, 30 the fourth, and 35 the fifth. Revenues were projected to reach $60 million in 1992. But the company lacked experienced management. Schultz had never led a growth effort of such magnitude and was just learning what the job of CEO was all about, having been the president of a small company for barely two years. Dave Olsen had run a single cafe for 11 years and was just learning to manage a multistore operation. Ron Lawrence, the company’s controller, had worked as a controller for several organizations. Other Starbucks employees had only the experience of managing or being a part of a six-store organization. When Starbucks’ key roaster and coffee buyer resigned, Schultz put Dave Olsen in charge of buying and roasting coffee. Lawrence Maltz, who had 20 years of experience in business and eight years of experience as president of a profitable public beverage company, was hired as executive vice president and charged with heading operations, finance, and human resources. In the next several months, a number of changes were instituted. To symbolize the merging of the two companies and the two cultures, a new logo was created that melded the Starbucks and Il Giornale logos. The Starbucks stores were equipped with espresso machines and remodeled to look more Italian than Old World nautical. The traditional Starbucks brown was replaced by Il Giornale green. The result was a new type of store—a cross between a retail coffee-bean store and an espresso bar/cafe—that became Starbucks’ signature format in the 1990s. By December 1987, employees at Starbucks had begun buying into the changes Schultz was making and trust had begun to build between management and employees. New stores were on the verge of opening in Vancouver and Chicago. One Starbucks store employee, Daryl Moore, who had voted against unionization in 1985, began to question his fellow employees about the need for a union. Over the next few weeks, Moore began a move to decertify the union. He carried a decertification letter around to Starbucks stores and secured the signatures of employees who no longer wished to be represented by the union. After getting a majority of store employees to sign the letter, he presented it to the National Labor Relations Board and the union representing store employees was decertified. Later, in 1992, the union representing Starbucks’ roasting plant and warehouse employees was also decertified. Expansion into Markets Outside the Pacific Northwest Starbucks’ e.

Monday, January 20, 2020

The Advancement of Technology Essay -- Military Technology

War has been a reoccurring part of America’s history for the past 230 years. From the 1700s to the present, America has gotten into many different situations and turmoil, which eventually lead to the wars we currently study and know about today. Technological advancements in warfare were necessary and a great obligation during times of war. This was pursued with drastic improvement. From the transformation of the use of smoothbore muskets during the Civil War to the industrial revolution leading to weaponry innovations post civil war, the nature of warfare dramatically changed. These developments proved to be proficient in battle. In the midst of these hundreds of years, while many technological advances demonstrated to be efficient in battle, the machine gun was one of the most significant advancements in technology that changed the face of warfare through its transformation of operations and strategy. During the civil war before the introduction of the machine guns, union soldiers primarily used smoothbore muskets. â€Å"The rifle’s low muzzle velocity and consequent high parabolic trajectory made for difficult long-range shooting, especially since soldiers engaged in little target practice and received virtually no training in estimating distances or in using the adjustable sights to compensate for the bullet’s curved flight. The tangled terrain of most battlefields—and the black powder smoke that engulfed every battle—often rendered enemy soldiers invisible until they were within smoothbore range† (Hess 288). This was assumed to be the reason of why the war was prolonged, and the combat losses were higher during the smoothbore era. Also with an ability of only firing a â€Å"maximum of three rounds per minute† (Howey), this rat... ...Goldsmith, Dolf L., and R. Blake. Stevens. The Devil's Paintbrush: Sir Hiram Maxim’s Gun. Toronto: Collector Grade Publications, 1989. Print. 2. Hess, Earl J. The Rifle Musket in Civil War Combat: Reality and Myth. Lawrence, Kan: University Press of Kansas, 2008. Print. 3. Howey, Allan W. "Weaponry: The Rifle-Musket and the Minià © Ball  » History Net." History Net. Weider History Group, Oct. 1999. Web. 12 May 2012. . 4. Lee, Loyd E. World War II. Westport, CT: Greenwood, 1999. Print. 5. Popenker, Max R. "Modern Firearms - MachineGuns." Max R. Popenker, 1999-2010. Web. 10 May 2012. . 6. Simkin, John. "Machine-Gun." Spartacus Educational - Home Page. John Simkin. Web. 10 May 2012. .

Sunday, January 12, 2020

Civilization in Paleolithic Era

Topic: To what extent does the hypothesis of bona fide, yet ‘missing’, civilization in the Palaeolithic era make sense to you? Palaeolithic meaning old stone, which is about (2. 6 million years – 300,000 years ago). Having a Lower, Middle and Upper stone age for Palaeolithic. In the Palaeolithic era climate was the pacemaker of change. As the world grew colder, the new climatic conditions restricted the habitat, certain species disappeared. Every time the climate changed the new conditions suited other animals. Each Ice Age last between fifty and a hundred thousand years as so mentioned in â€Å"The New Penguin History of the World† written by J.M Roberts. He mentions â€Å"Evidence of the glaciations and their effects is now available from all oceans and continents and they provide the backbone for prehistory chronology. † I did research and came across a website http://www. sciencedaily. com/releases/2004/04/040421234349. htm. It has evidence that supports the three major glaciation events that occurred in the past. Robert Tucker and Zhanxiong Peng of the Department of Earth and Planetary Sciences at Washington University of St. Louis implicated that â€Å"There would be no communication between the atmosphere and the ocean.The deep ocean would quickly become free of oxygen because light would not be able to penetrate the ice to fuel algae. Above the ice, there would be little rain or snow because there would be little evaporation. Many organisms that lived in milder conditions would become extinct. † Investigation shows that there are at least three levels of glacial deposits. Each ice age destroyed the habitats of creatures that had adapted to the arctic condition. But after each glaciation new species spread. As time went on, one branch lead to apes and the other lead to human beings, this line was named hominids.Indicated by J. M Roberts, â€Å"The first hominid fossil found in Kenya and Ethiopia are dated only 4. 5 million years ago. † But then a French fossil hunter discovered a fossil in Chadian desert year 2001; nearly complete cranium, pieces of jawbone and teeth. They pinned down the age of this fossil, which they say is between 6. 8 and 7. 2 million years old. (Information found in http://afp. google. com/article/ALeqM5gjCJ41Mm-Li6gU9Rd4n1DXPlm7Gg . ) So as to what is happening, fossil hunters, geologist, archeologist, scientist etc. keep discovering new fossils with different ages and keep pushing back our timelines. So saying the truth we are not sure exactly when the hominids where first taking place in our timeline. Who knows what there is yet to be discovered. Going to a description and comparison of a hominid and primate. Those with a small cranium were consider primates because the brain was not too intelligent. As time went on the brain developed little by little. More common sense, but as that happened the brain grew, therefore having a much bigger cranium, which were t hen classified as hominids.Hominids developed reasoning, a sense of communication and had a system of control, which is the beginning of the creation of human beings. Primates communicate with signals, went on natural instincts, and had no system of control. Their method was adaptation to life and the environment around them. Which if I’m not mistaken is what we now call wild animals. We are the top of the food chain. We are the fittest to survival. Why, because we have intelligence, logic and reasoning. We have common sense to avoid casual mistakes that can cause our lives. Professor Paul S.Burdett from Raritan Valley Community College, Branchburg NJ wrote a document named â€Å"What Is Human? †. It describes three main parts of what makes us human and has a comparison to what is not classified to be human. 1. Reasoning is the power to think, and understand. Mind solves problems and the body has a reaction to everything but think before react. As for primates, theyâ⠂¬â„¢re mind and reactions are not reasonable like ours. 2. Language is our form of communication. Without communication we have nothing. With language we have grammar and syntax an arrangement that focuses on a relationship between words. . System of control, which keeps things organized. Having a social life. Under that category come family, tribes, and clans. Which are all in relation and come with a natural connectivity as in a connection in blood or DNA. Examples; mother, son, grandfather, cousins, aunts, including mother-in-law and so on. Now beyond that comes communities, societies, culture and civilization. Which is an organization of non-related people. People working together to make a living. As for primates, they only go with their instincts and communicate with signals.And cannot go any much further than that. So my definition for being a human is one who exhibits a sense of humanity, compassion, civilization, and consideration towards mankind. An understanding, organiz ation, and sense of communication. So is it possible that such a civilization could have existed? There was a point in time where the hominids decided to just settle down. Having water, and food near them. So they did not have to travel far. In the process tools were created, fire, a sense a religion, a stable living style, a sense of emotion, farming.All of these things is what started civilization. And civilization was not established until the Upper Palaeolithic Era. Without everything being done, no civilization would have been created. Till this day discoveries are made. The only way to know if something really existed is by evidence. And by evidence I mean fossils, skeletons, art, grave goods, â€Å"ARTIFACTS! † Artifacts is all we have. The only problem is that from what I have understood is that we have more evidence going towards the Upper Palaeolithic Era. In J. M Roberts book (Book 1, Chapter 2, last paragraph on pg. 1) he stated, â€Å"To separate Upper and Lower Palaeolithic is easy; the division represents the physical facts†¦ †¦ the most recent and therefore fossils and artifacts found among them are later found then lower. † Meaning more evidence is found in the Upper. â€Å"Almost all the artifacts that survived in Palaeolithic are made from stone, none are made of metal†¦ †¦ which stone artifacts provide the largest significant body of evidence. † So from what is seems stones where most likely to be preserved then metal. Neolithic Revolution involved far more than the adoption of a limited set of food producing techniques.The making of small groups of hunter, gatherers that had hitherto dominated human history into sedentary societies based in built up villages and towns, which radically modified their natural environment by means of specialized food crop cultivation that allowed extensive surplus food production. These developments provided the basis for high population density settlements, specialize d and complex labor diversification, trading economies, the development of art, architecture, and culture. All these things are well described in a book called â€Å"The Breakout: The Origins Of Civilization† written by Martha Lamberg-Karlovsky.The Revolution developed independently in different parts of the world, not just in the Fertile Crescent. The Mediterranean climate has a long dry season with a short period of rain, which made it suitable for small plants with large seeds, like wheat and barley. The Oasis Theory, originally proposed by Raphael Pumpelly in 1908, maintains that as the climate got drier due to the Atlantic depressions shifting northward, communities contracted to oases where they were forced into close association with animals, which were then domesticated together with planting of seeds.Agriculture, known as farming. Which was turning point. No more long travel, everything at hand and the sense of trading. With trading came leader, which meant governmen t. With all that said societies. In this part of time, known art was a way of recording things in their time. There were caves that have been found with carved drawings. Showing life itself, and how everything was before. Art created by stones, mud as paint, and drawings on top of other drawings creating stories that have yet to be discovered.Every time we think we found the oldest society another older one pops up. Everyday life was not able to be recorded. Communication was not able to be recorded. Records in that era took a lot of time and dedication. So in our sense, was there civilization in the Palaeolithic Era? I think there was. Even though there isn’t much evidence, it actually makes sense. Like in the quote, â€Å"If a tree falls in the forest but no one is there to hear it, does it still make a sound? † Just because we did not witness it, it does not mean it did not exist.

Saturday, January 4, 2020

Vimto Business Report - Free Essay Example

Sample details Pages: 6 Words: 1709 Downloads: 3 Date added: 2017/06/26 Category Business Essay Type Analytical essay Level High school Did you like this example? Vimto Business Report Table of Content EXECUTIVE SUMMARY  3 1. CURRENT MARKET POSITION  4 1.1 Brand 1.2 Target Market Analysis 2. MARKET OVERVIEW  5-6 2.1 PEST 2.2 Current business trends 3. Don’t waste time! Our writers will create an original "Vimto Business Report" essay for you Create order TOWS ANALYSIS  7-8 3.1 Key Issues 3.2 Key Opportunities 4. STRATEGY  8-9 4.1 Brand Development Strategy 4.2 Pricing Strategy 4.3 Advertising Strategy 4.4 Distribution Strategy 5. SUMMARY  9 6. REFERENCES10 Executive Summary This report is written to present an analysis of the marketing environment of Vimto with the aim of providing strategic input on how to improve their chances of success. Vimto is in the soft drinks business and is owned by Nichols plc. Vimto grew 4.3% and since ità ¢Ã¢â€š ¬Ã¢â€ž ¢s the core brand of the group, significant attention has to be allocated to assure its continued success. Reading this report will highlight what strategies, obstacles, trends, threats and marketing/ communication tools are needed to make sure this product become successful. The report contains a market analysis, different recommendations and an outline on the future potentials for the products. CURRENT MARKET POSITION 1.1 Brand Nichols is the UK based company that is engaged in producing soft drinks and other beverages. The company distributes its products to the retail, wholesale, vending, catering, licensed, and leisure industries. The company has operations in the UK, Middle East, China and Africa. The companys brand portfolio includes Vimto, which is sold in over 65. The company offers still and carbonates drinks. The company offers soft drinks on dispense market. (MarketLine, 2013) 1.2. Target Market Analysis Supermarkets / hypermarkets form the leading distribution channel in the United Kingdom carbonated soft drinks market, accounting for a 35.2% share of the total markets volume. On-trade accounts for a further 25.9% of the market. Figure 1: United Kingdom carbonated soft drinks market distribution: % share, by volume, 2012 (source: MarketLine) MARKET OVERVIEW PESTLE Political Political factors impact on the way business operates. The statutory minimum wage affects all businesses, as do consumer and health and safety laws. The political decision as to whether or not the UK signs up to have the Single European Currency is having an impact on UK businesses, which includes Vimto. Economical All businesses are affected by economical factors nationally and globally. Interest rate policies and fiscal policies will have to be set accordingly. Within the UK the climate of the economy dictates how consumer may behave within society. Whether an economy is in a boom, recession or recovery will also affect consumer confidence and behaviour. This has an impact on most businesses including Vimto. An economy which is in a recession is characterized by high unemployment, and low confidence. Because of high unemployment spending is low; confidence about job security is also low. Consumers will be more inclined to reduce their spending because of the ir low revenues. This leads businesses to try to reduce their operation cost to save money. The market is seeing a growth so we can assume that the impact on Vimto will be currently minimal. (Marketline, 2013) Social The social factors affecting Vimto include the demographic changes, cultural aspect and consumers habits. These factors affect customer needs and the size of potential markets. Vimto being sweet and fruity will appeal to the younger demographic. It has also introduced energy drink in its portfolio that will entice sporty and diet aware people. (Just-drinks, 2013) Technological Technological factors are vital for competitive advantage, and are a major driver of change and efficiency. With the advent of social media allowing for a wide range of consumer to be targeted, it simply cannot be neglected anymore and those who invest in that area will have a significant advantage. (Brand Republic, 2009) Laws regulation Environmental Like any other drinks brand, Vimto experiences many environmental threats to both production and brand awareness. They have to ensure that their packaging and brand is not affecting the environment or they could receive a backlash from consumers and activisits. (Loulla-Mae Eleftheriou-Smith, 2011) Current business trends The performance of the market is forecast to accelerate, with an anticipated CAGR of 4.4% for the five-year period 2012 2017, which is expected to drive the market to a value of $16,063.6m by the end of 2017. Comparatively, the French and German markets will grow with CAGRs of 1% and 1.6% respectively, over the same period, to reach respective values of $4,827.6m and $11,274.2m in 2017. (MarketLine, 2013) TOWS ANALYSIS Tows analysis for vimto. Threats Competitors- Ribena with large financial backing Unhealthy product as high in sugar etc. Poor weather an effect the harvesting of berries essential to making Vimto. Opportunities Automated production (in order to cheaply mass produce) Marketing via phone apps (Ribena sponsors apps why doesnà ¢Ã¢â€š ¬Ã¢â€ž ¢t Vimto). Use of cyber marketing via websites such as fb. Weaknesses outsourcing production = higher costs Expensive labour in the UK. Hardly use the internet to advertise (despite target market being 10-25 year olds. Not outsourcing means they will save money and therefore Vimto will be able to be more competitive against competitors such as Ribena who have a large financial backing. Weather in the UK does sometimes effect the harvest of crop (eg. The flooding recently) therefore by moving abroad Vimto can take advantage of both cheap labour and a more stable climate for growing berries. Instead of outsourcing, if Vimto where to produce there product internally they could invest in an automated production line saving them money in the long run due to small labour costs and improved efficiency. Opportunity to use Facebook and phone apps to advertise to target market (10-25 year olds) who are the main users of the internet. (this is something that Ribena defiantly do better than Vimto) Strengths Cheap ingredients sourced locally. New electronic documenting system (saving  £50,000 a year) Joint venture with weight watchers to try to improve brand image. Although Vimto is unhealthy they have recently entered into a joint venture with weight watchers in order to improve their brand name, this is due to a social shift towards healthy food and drink. If Vimto do decided to move abroad they will lose the cheap transport costs for their raw materials as well as the right to advertise that they produce Vimto in the UK from UK berries. Advertise that Vimto source there ingredients from the UK keeping UK citizens employed à ¢Ã¢â€š ¬Ã¢â‚¬Å" links in with new advertisements via internet and apps. Opportunity to widely advertise recycled bottles (due to a more socially conscious consumer) Figure 2. à ¢Ã¢â€š ¬Ã¢â‚¬Å" TOWS analysis table. 4.1 Key issues From the TOWS, the important issues to consider are: high costs resulting from using UK labour and not outsourcing. Lack of Internet of coverage and presence as social medias (i.e. Facebook) arenà ¢Ã¢â€š ¬Ã¢â€ž ¢t well or not exploited at all. 4.2 Key opportunities From the TOWS, the key opportunities include: The energy sector remains the fastest growing category in soft drinks at 7% per annum (Nichols, 2014) so mergers with well-known brand (recently with Weightwatchers) are a good option. Wide advertisement of its green position. Use of cyber marketing by using social medias to target a broader range of consumers. STRATEGY 4.1 Brand Development strategy The brand image is already in place. Vimto must simply supply evidence to the consumers that their brand image is accurate and worthwhile. Vimto provide proof of their quality products and services by advertising that theyà ¢Ã¢â€š ¬Ã¢â€ž ¢re locally produced following a strict CSR code. 4.2 Pricing strategy As the company generated good numbers despite the anticipated reduction, an alteration of the price isnà ¢Ã¢â€š ¬Ã¢â€ž ¢t critical. 4.3 Advertising strategy It should be focused more on the range of exposure through multiple media sources (i.e social medias). 4.4 Distribution strategy Progress continues to be made in Nichols Dispense business, with consolidation of the independent distributor base. This also involved the full integration of Festival Soft Drinks Limited, based on the south coast of England, into Nichols Dispense during 2013. 4.5 Marketing strategy The marketing strategy of Vimto will be to: Increase a wareness of the brand finding innovative way to use the multimedia tools (i.e. Facebook etc.). Build strategic partnerships to make sure that you will be able to take advantage of their brand recognition and infrastructures. Differentiate themselves from competitors through introduction of new products consumer targeting specific type (i.e. sport drinks with flashy PET bottle to attract sportmen). Continued advertisement of à ¢Ã¢â€š ¬Ã‹Å"greenà ¢Ã¢â€š ¬Ã¢â€ž ¢ resolutions adoption and CSR policies. SUMMARY The target Market could be sometimes hard to reach due to the fact that most of them are not well exposed to the brand compared to the competition such as Coca-Cola. This marketing and promotion could be overcome by selecting a wider range of marketing and communication tools. New products introduced offer a number a choices to consumers and widen its base. Additionally, corporate responsibility position makes it look respectable and apealling. The strong market position Vimto has in the global market gives its products a high change of success. Vimto has a well established market position in the soft drinks industry, which gives it a large scale of new opportunities by the bias of mergers. If the implement of those new ways to attract consumers (i.e social media) is done, it will gives them a competitive advantage. REFERENCES Brand Republic (2009) Vimto digital strategy pulls teens into branded game. Available from: https://www.brandrepublic.com/news/922925/Vimto-digital-strategy-pulls-teens-branded-game/?HAYILC=RELATED [Accessed 04/04/2014] Bureau van Dijk (2014) Nichols company report. FAME [online]. Available from: https://fame2.bvdep.com [Accessed 28 February 2014] Bureau van Dijk (2014) Nichols company report. OSIRIS [online]. Available from: https://osiris.bvdinfo.com/ [Accessed 28 February 2014] Facebook (2014) Facebook. Available from: https://www.facebook.com [Accessed 04/04/2014] Just-drinks. (2013) Product Launch UK: Nichols Vimto Extreme Energy and Extreme Sport. just-drinks [online]. Available from: https://www.just-drinks.com/news/nichols-vimto-extreme-energy-and-extreme-sport_id110674.aspx [Accessed 04/04/2014] Loulla-Mae Eleftheriou-Smith (2011) Vimto updates bottle and packaging design. Marketing Magazine [online]. Available from: https://www.marketingmagazine.co.uk, [ac cessed on 04/04/2014] MarketLine (2013) MarketLine Industry Profile : Carbonated Soft Drinks industry in the United Kingdom. MarketLine Advantage [online]. Available from : https://https://advantage.marketline.com.ezproxy.uwe.ac.uk/ [Accessed 28 February 2014] MarketLine (2013) Company Profile : Nichols plc. MarketLine Advantage [online]. Available from : https://https://advantage.marketline.com.ezproxy.uwe.ac.uk [Accessed 28 February 2014] Nichols plc (2014) Nichols plc. Available from: https://www.nicholsplc.co.uk/ [Accessed 04/04/2014] Nichols plc (2014) Annual report financial statement 2013 [online]. . Available from: https://www.nicholsplc.co.uk/ [Accessed 04/04/2014] Vimto (2014) Vimto. Available from: https://www.vimto.co.uk/ [Accessed 04/04/2014] Weight Watchers (2014) Weight Watchers. Available from: https://www.weightwatchers.co.uk/ [Accessed 04/04/2014] Template style inspired by Chernova, E. et al (2013) Samsung Smart Fridge Business to Business Marketing Plan. Available from: https://www.coursepaper.com/samsung-smart-fridge-business-business-marketing-plan [Accessed 04/04/2014]