Porter’s 5 Forces Analysis of Starbucks

Group Assessment: One Written Essay (50%) The work will normally be done in pairs. The work will include the analysis of an existing situation, the application of analysis techniques (introduced in lectures and developed in tutorials) and the presentation of conclusions using similarly-acquired techniques. It is intended to promote and assess practical research skills.

Read the case study (Page 6 onwards) and answer the following questions: 1. Using an appropriate model, analyse the ways in which Universal has provided a superior level of service to its customers. (30 marks) 2. Using the information provided in the case scenario, strategically evaluate the performance of the company up to 2004, indicating any areas of particular concern. (30 marks) 3. Matthew Black is well aware that the achievement of the growth targets for the 2005 to 2007 period will depend on successful implementation of the strategy, affecting all parts of the company’s activities.

Explain in detail the key issues affecting implementation and the changes necessary to achieve Universal’s ambitious growth strategy. (20 marks) 4. What criteria would you use to assess whether Universal is an ‘excellent’ company? (20 marks) Assessment Requirements: A written report of approximately 2,500 words that synthesises and critically evaluates management and planning issues from the case study. State the number of words used at the end of the assignment. You may include diagrams, figures, appendices etc. without word penalty. A sliding scale of penalties for excess length will be imposed.

The penalties will be as follows: Up to 10% excess words:no penalty 11-20% excess words:- 5% penalty 21-30% excess words:-10% penalty 31% plus excess words: cannot achieve more than a pass grade (50%). Guidelines: A written report must be compiled in a suitable format that must incorporate the following: • A clear and concise outline of the practical management and planning issues; • Generation of conclusions that draw upon both theoretical and practical aspects; • Use of appropriate terminology that will indicate a thorough understanding of management concepts; • Suitable referencing of he materials used to support arguments put forward that will indicate competence in the academic issues discussed; • Evidence to suggest a more in-depth understanding of the planning concepts being reviewed and their practical applications; • Written content and structure that will demonstrate practical benefits being derived from the module, reading lists and research required for the assignment; • A wide range of sources used and cited (a minimum of 5 and not before 1999). • Full referencing of material and sources cited that incorporate the Harvard Referencing System. Mark Distribution for assignment

The mark allocation for the assignment will be as follows: ? 30 % of the mark will be allocated for familiarity with subject/material and evidence of original thinking. ? 30% of the marks will be allocated for Quality of argument/reasoning; the depth of analysis; expansion of ideas/argument and recognition of wider context/complexity of topic ? 10 % of the marks will be allocated for the relevance of answer to task set; the accuracy of details; consistency of focus and the organisation of ideas. ? 10% will be allocated for the ease of comprehension; appropriateness of language; fluency of style and the use of punctuation, grammar, etc. 10% will be allocated for the presentation format; word count and length ? 10% will be allocated for the use of supporting evidence; acknowledgement of sources: references, quotes, statistics and range and relevance of bibliography Assessment Guidelines Grading Criteria: The criteria below detail the areas which will be taken into account when the assignment is marked. 1. Pass assignments are expected to be legible, tidy, well organised and written in clear understandable English. The report should include an executive summary or abstract at the beginning and end with clear conclusions and recommendations.

If you have any problems with report formats please do not hesitate to contact the module tutor. 2. High grades [70%, 75%, +80%] need to demonstrate sustained coherent analytical ability. A systematic approach to analysis and evaluation is required for grades 60% to 70% – for grades at the higher end of the scale, integration and synthesis is a requirement. The quality of the arguments used to develop and support prescriptions/recommendations are, the essential test of integration. 3. Evidence of reading and some understanding of models and concepts is needed to achieve a pass grade [40%].

Integration of theory and practice is expected for any grade above 50%. 4. You are expected to clearly state any assumptions you make, and support statements and theories by referencing to appropriate sources. [This is essential for higher grades but does not necessarily prejudice a pass mark [40%] if it is missing]. CASE STUDY: Universal Roofing Systems Introduction Universal Roofing Systems is a family owned and managed business specialising in the design, assembly and installation of low maintenance PVC roofing products for domestic housing. These products include PVC fascia boards and rainwater drainage systems.

Set up in 1995 by two brothers, Matthew and Simon Black, the firm has grown year on year, achieving almost ? 1 million sales by the year 2001. Universal’s products, or rather services, are primarily for private house owners, though a significant amount of sales are coming from commercial house owners, mainly local government authorities and housing associations, providing cheaper housing for rent. Universal have recently received central government recognition and an award for their contribution to providing employment in deprived inner city areas.

In 2002 and 2003, they were the fastest growing inner city firm in their region. Origins and competitive environment Matthew and Simon’s decision to go into business owed a considerable amount to the experience and skills they had gained working in their father’s local cabinet and carpentry business. At their father’s insistence, both were skilled cabinet-makers and shared his commitment to quality workmanship and installation. Their decision to start a business using PVC materials as opposed to wood came as an unwelcome shock to their father.

However, the opportunity to install PVC roofing boards on the house of a commercial contact provided the stimulus for them to go into business on their own account. In the UK there are some 25 million houses, of which 17 million are privately owned and 8 million rented. New housing is now usually built with PVC doors and windows installed, so it is the replacement market of rotten wooden doors and windows in existing houses that the manufacturers and installers of PVC windows and doors focus on.

PVC offers some significant advantages to the owner/occupier – it is virtually maintenance free and improves the appearance of the house. Consequently, there is a high demand for PVC replacement doors and windows, estimated at ? 1·5 billion in the year 2000. This has attracted some large-scale manufacturers and installers. They compete aggressively for market share and use equally aggressive direct sales and promotion techniques to attract house owners to their product.

Although the market for PVC windows and doors is reasonably mature, there has been no significant movement of large companies into the installation of roofing products. Their complex design and location at the top of a house mean that these products are much more complex and difficult to install. Economies of scale are harder to achieve and, as a consequence, the installation of PVC roofing systems is largely in the hands of small businesses able to charge high prices and frequently giving a poor quality service to the house owner. In a market with potential sales of ? 50 million a year, no firm accounts for more than 3%. It was against this fragmented, but significant market that Universal wanted to offer something distinctively different. Operational processes Matthew and Simon looked at the whole process of delivering a quality service in replacement PVC roofing systems. The experience of the PVC door and window installers showed the long-term rates of growth possible through actively promoting and selling the service. Supplies of PVC board and fittings were reasonably easy to obtain from the small number of large UK companies extruding PVC boards in large volumes.

However, the unequal bargaining power meant that these suppliers dominated and were difficult to involve in any product development. Sales were generated by door-to-door canvassing, followed by a visit from a company sales representative who tried to complete the sale. Advertising in the press, radio and TV now supported this sales activity. In the early days the opportunity was taken to sell the service at Saturday markets and, being so small, Universal could often pleasantly surprise the house owner by offering virtually immediate installation.

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