TEAM MEMBERS

We decided to choose to make an audit blog about the coffee shops market and more precisely concerning Starbucks and Costa Coffee because both of us like drink coffees.

As flexible students, through our different international experiences, we discover those brands and we like to spend a pleasant time in coffee shops and talk with international people.
During our roadtrips, we enjoyed to relax with a good coffee and a cosy atmosphere.

RECOMMENDATIONS

After we made this brand audit blog regarding STARBUCKS and COSTA COFFEE, we think that both brands are very famous in the world and in France ( 1st and 2st in the world market), but after analyse more seriously both the brands strategy, we can make some recommendations.

FOR COSTA COFFEE:
- More communications and advertising => specifically in digital strategy (Facebook, twitter...)
- Try to involve more customers in the Costa Coffee process and decisions ( for example : crowdsourcing, ambassadors, reward of consumers...)
- More public informations about them 
- Increase It present in France and Europe
- Take the opportunity of the emergent markets


FOR STARBUCKS:
- Try to make a better research and adaptation to the French market ( consumer habits, purchase behavior, places and  prices)
- take also the opportunity of the emergent markets.
- Continuously innovate with new concepts => for example happy hour 4-6 wit specials on coffee drinks and selected food to adapt to young french market.
- Develop the network in other cities in France ==> Not only in Paris => Lille, Nice.....

HISTORY OF COSTA COFFEE

In 1971, two brothers, Bruno and Sergio Costa created the Mocha Italia Blend and started selling to businesses in the UK. A few years later, in 1978, the two brothers opened the first Costa Coffee in London.

Costa offers always the same unique blend of coffee with beans that have been roasted in London. Costa focuses on the quality and does not offer a coffee that does not make the grade.

Today, with more than 1300 coffee shops in the UK, Costa is the largest coffee shop chain in the UK. Costa is also the second largest chain worldwide with more than 600 coffee shops in 30 countries.

Article written by Elsa Bertrand

HISTORY OF STARBUCKS

In 1971, three friends passionate by fresh coffee opened the first Starbucks coffee in Seattle. They began to sell fresh roasted coffee beans and coffee machines. People came to their salon to savour ones of the best coffees of the world.

In the beginning of the 80s, Howard Schultz (the actual CEO of Starbucks) joined the company and changes appeared. Indeed, after a trip in Italy, Howard decided to transpose in the USA the Italian tradition around coffee and make Starbucks not only a coffee salon where you share gourmet coffee but also an atmosphere that favours human relation.

Today, with more than 15000 coffee shops in 50 countries, Starbucks became the largest worldwide coffee shop chain.

Article written by Elsa Bertrand

COSTA COFFEE KEY FIGURES

1578

Nowadays, Costa has 1578 outlets in the UK. On average the company opens one new coffee shop every two days

30

Costa is present in 30 countries with 2300 coffee shops

3,7
Every week, 3,7 million of cups are sold by Costa

263,8

In 2011, the turnover of Costa was 263,8 million of pounds


Article written by Elsa Bertrand

STARBUCKS KEY FIGURES

18.000

Nowadays, Starbucks has almost 18 000 coffee shops in 60 countries. On average, the company opens 2 new coffee shops each day since 1987.

48

Starbucks has 48 coffee shops in france

220

Starbucks is able to serve 220 customers in one hour. The goal of Starbuks is to serve customers in 3 minutes and 5 minutes maximum during crowd’s moments.

87.000

Starbucks offers 87000 combinations of different beverages. All the waiters are able to prepare them.

11,7

In 2011, Starbucks’ turnover has reached 11,7 billion of dollars (10,7 in 2010)

15

In 2011, 15 million of dollars are dedicated to the research and development in order to develop new equipments and new products.

149.000

Starbucks counts 149000 employees across the world (112000 in USA)

50

Every week, Starbucks welcomes 50 million of visitors.

Article written by Elsa Bertrand

COSTA COFFEE: STRATEGIES OF ALLIANCES

In 1999, Costa Coffee established its first international franchise partner with ELR. They opened the first Costa Coffee store abroad, in Dubai.

In 2005, Costa coffee was the first international coffee chain to enter in India under a licence agreement with Devyani International, “the fastest growing, and customer centric, profitable player in the Indian retail F&B sector”.

In order to set up Coffee store in China, Costa made a joint venture in 2006 with the Yueda Group (that has worked with the French Carrefour group) based in Jiangsu Province. This partnership allows Costa Coffee to benefit from the knowledge of the local market and customers. Thus, the success of Costa depends on the Yueda Group.

In 2007, Costa Coffee signed another joint venture with the Beijing Hualian Group, a Chinese retailer. Both parties established the Hualian Costa Catering Management Co., Ltd. The plan was to open 300 coffee stores in Beijing, Tianjin, Hebei, North east China and other region.

In 2011, Costa coffee partners with HP in India. A free cappuccino is offered to customers who purchase the HP ink cartridge rewards. Once they have chosen the reward they want, they need to present the voucher at Costa Coffee while placing the order to get their free drink.

In 2012, Costa Cofee became partners with Elior, the French leader in the market regarding catering in train stations.Thus, Elior has opened the first Costa Cofee in France, in the Lyon Station. 

In 2012, Costa coffee partners with Kraft to launch a range of “at home coffee”. Three Costa’s recipes are used in Kraft’s Tassimo coffee machines. These capsules are sold in national retailers and in Costa stores.

Article written by Elsa Bertrand

STARBUCKS: STRATEGIES OF ALLIANCES

In 1993, Starbucks made an alliance with Barnes and Noble bookstore. They offer coffee inside the store so that customers can drink a coffee when reading a book. The two companies benefit from this strategy.

In 1996, Starbucks made an alliance with Pepsico to sell ready to drink beverage such as the popular Frappucino. The partnership benefits from the reputation of high quality coffee from Starbucks and the huge bottling and distribution system from Pepsico.

They have also formed an alliance with United Airlines in 1995, which offer Starbucks’coffee on board and made Starbucks “the exclusive coffee supplier on every united flights.”

During the same year, they have created a joint venture with Dreyer’s Grand Ice Cream in order to sell a “premium line” of coffee ice creams.

In 1998, they also partnered with Kraft foods so that Starbucks’ products are sold in national grocery store chains.

In 2006, the company formed a partnership with the National Association for the Advancement of Colored People (NAACP). The goal of this alliance is to fight for social and economic equality.

Another partnership that was triumphant is the one with i-Tunes (Apple) in 2007. Customers, without connection fee, are able to “ browse, search for, preview, buy and download music from the iTunes Wi-Fi Music Store at Starbucks” onto their computer, smartphone…running iTunes while at a participating location.

In 2011, Starbucks and Tata Coffee became partner so that Starbucks could sell its products in India. The joint venture is called Tata Starbucks.

The more recent alliance of Starbucks is the one with Danone in 2013 with the launching of a new yogurt, sold under the brand “Evolution Fresh, inspired by Danone”. In a first phase, this new product will be sold inside Starbucks’stores and then commercialized in large retailers. Thus, Danone accelerates its development in the United States and Starbucks increases the offer of its brand “Evolution Fresh”.

Article written by Elsa Bertrand

PESTEL

Political: 

The majority of the producers of coffee come from developing countries and some are in conflict such as Ethiopia, Colombia, Cuba... Moreover, work conditions are more and more discussed just like the ethical aspect. There is an increased demand for sustainable coffee which assures a fair price to the producers.

Political organizations have influences on the tariff and taxes.

Economic:

The price of the coffee is very volatile so Costa and Starbucks could be obliged to change their prices.

The economic recession has a huge impact on the consumers’ behaviour. They shop less.

Social:

As Starbucks and Costa have opened coffee shop in many different countries, they should analyse the culture and the habits of each country in order to offer the best product to their consumers.

Consumers become more health conscious which has an impact on the coffee market. We can find many alternatives drinks in the market. Costa and Starbucks have to create new lines of product to satisfy the new expectations of the consumers.

Technological:

We can find in the market a lot of high end coffee machine at affordable prices. The consumer can prepare his beverage at home. Moreover, competition is rude so that Starbucks and Costa need to invest more in research and development. They are obliged to innovate if they want to keep their customers.

The two brands must also take into account the importance of internet and social network.

Environmental:

Nowadays, a firm cannot make business without taking into account the environment. Many organizations make pressure on companies that do not adopt environmental measures. The consumer is increasingly sensitive to sustainable development.

Legal:

Costa and Starbucks are involved in sustainable development and they care about ethical issues. That is why they need to respect some constraints.

Article written by Elsa Bertrand

DESCRIPTION AND CHARACTERISTICS

THE COFFEE MARKET EVOLUTION

World consumption of coffee has increased during the past 10 years
- Traditionals markets : annual growth rate : 1,6%
- Emergent market and exports country : 3,5% and 4,3% of growth rate
- Exporting countries represent now 31% of the world consumption ( 25% in 2001)
- Brazil is the most important emergent market ( this country will become the firts consumer of coffee)


DRINK EVOLUTION
- Before coffee was drink in the same way : simple with just ad of sugar and milk
- Change in the way to prepare the coffee
- According to different time of the journey, the cultural differences (hot or cold, with alcool like Irish coffee...)


THE COFFEE SHOP MARKET

- In Europe : traditional coffee shops : basic atmosphere, more sophisticated way to drink coffee
- Originally, coffee shops where place to sociabilize but frequented by a masculin class.
- With the increase of individualism and the modern society, coffee shops became convivial places, to spend a pleasant time and relax.
- Majority of coffee shops were independents.

NEW NEEDS, NEW TRENDS:

- Needs and expectations of  consumers had changed through years.
- People are looking for more taste, their drink coffee at different time of the journey

- The born of new types of coffee shops ==> Starbucks revolutionized the way to drink coffees ==> procure a confortable place/ warm ambience, to relax and enjoy coffees and take away coffees in cups.


Severals types of competitors:

• Coffee retailers : Mac Donalds, Burger Kings, Starbucks....
• Coffee makers : Jacques Vabre, Carte Noire,  Malongo...
• Coffee machines markers : Nescafé, Nespresso, Senseo..
• In france ==> All coffee shops " bistros du coin"

- Boom of home-made coffee with the growth of coffee machine at home (expresso machins and capsule machines)


Article written by Judy Garber

COSTA COFFEE SWOT

Article written by Judy Garber