Caribou Coffee- External Environment
Anh T. Nguyen
Professor Lois Shelton
BUS-497 Strategic Management
Exam One
September 27th, 2010
CARIBOU COFFEE: EXTERNAL ENVIRONMENT
Industry Structure:
Caribou Coffee’s business is in the industry of specialty coffee, where high quality of coffee is a main characteristic. Hence, Arabica coffee bean is mainly roasted to produce specialty coffee as it is considered superior to its counterpart, the Robusta, which is usually low-quality bean used in production of non-specialty coffee. High-quality Arabica bean provides a mild aroma and a pleasing flavor which are suitable for specialty coffee.
The specialty coffee industry comprises of two business segments: coffee beverage sales and whole bean coffee sales for home, office, and restaurant consumption. Dominant economic factors that attribute to the structure of the specialty coffee industry include market size and growth, product differentiation, scope of competitive rivalry, number of rivals, and price of coffee bean.
Specialty coffee is a strong and growing industry as its sales continued to grow in both the U.S. and abroad. Specialty consumption increased by more than 48% in the U.S. from 2001 to 2006 and is estimated to be worth $11 billion annually. The increase of specialty coffeehouses from only 500 units in 1991 to 24,000 units in 2006 is a major thrust to this rapid growth. Underlying factors contributing to this increase are credited to development of new quality beverage, an expanding coffee menu, and coffeehouses becoming “the third place” for social consumption. Besides, consumers’ growing interests in specialty and traditional products such as micro-brewed beer, single malt liquor, and organic foods trigger the growth in the industry of specialty coffee, which promises to deliver more authentic, more traditional, flavor, and healthful products. The industry is in a rapid growth stage and expected not to peak until 2015.
Product differentiation is the second most
Professor Lois Shelton
BUS-497 Strategic Management
Exam One
September 27th, 2010
CARIBOU COFFEE: EXTERNAL ENVIRONMENT
Industry Structure:
Caribou Coffee’s business is in the industry of specialty coffee, where high quality of coffee is a main characteristic. Hence, Arabica coffee bean is mainly roasted to produce specialty coffee as it is considered superior to its counterpart, the Robusta, which is usually low-quality bean used in production of non-specialty coffee. High-quality Arabica bean provides a mild aroma and a pleasing flavor which are suitable for specialty coffee.
The specialty coffee industry comprises of two business segments: coffee beverage sales and whole bean coffee sales for home, office, and restaurant consumption. Dominant economic factors that attribute to the structure of the specialty coffee industry include market size and growth, product differentiation, scope of competitive rivalry, number of rivals, and price of coffee bean.
Specialty coffee is a strong and growing industry as its sales continued to grow in both the U.S. and abroad. Specialty consumption increased by more than 48% in the U.S. from 2001 to 2006 and is estimated to be worth $11 billion annually. The increase of specialty coffeehouses from only 500 units in 1991 to 24,000 units in 2006 is a major thrust to this rapid growth. Underlying factors contributing to this increase are credited to development of new quality beverage, an expanding coffee menu, and coffeehouses becoming “the third place” for social consumption. Besides, consumers’ growing interests in specialty and traditional products such as micro-brewed beer, single malt liquor, and organic foods trigger the growth in the industry of specialty coffee, which promises to deliver more authentic, more traditional, flavor, and healthful products. The industry is in a rapid growth stage and expected not to peak until 2015.
Product differentiation is the second most