Section 1: Product/ServiceDescribe your product/service concept.
Starbucks prides itself on excellent corporate culture and leadership, but it lacks events to promulgate it into the modern modes of networking. Therefore, “COFFEE Talk,” would bring in current, innovative speakers to Fort Collins in an effort to increase the essence of coffee shops where ideas can be spread. Our goal in the implementation of this new service is to increase evening foot traffic and bringing more customers to our stores.
Identify the value proposition.
The value proposition of COFFEE Talk would be that it brings people together in an atmosphere that promotes open communication and the spread of ideas. Inspired by TED Talks, Steven Johnson notes that coffee houses were crucial to the development of new ideas during the Enlightenment (Johnson, 2010). Value propositions are a collective acknowledgment of what companies believe customers value the most, and Starbucks promotes its environment and aura as an attractor (Mikkola, Mahlamaki & Uusitalo, n.d.).
Does the technology currently exist to create this product/service?
The spread of ideas does not require licensing or special technology. It can basically be like an open mic has been in many other coffee shops. Consumers will spend money on coffee and refreshments, but they will also reap the rewards of education and experienced speakers on a number of current topics Wednesday evenings after work.
Does a similar product/service already exist in the market?
There are several community services similar to Starbucks COFFEE Talks, however we do not expect heavy competition from these alternatives. Because Starbucks COFFEE Talks is a free service to the community, it will enhance the intellect of our customer base without asking for monetary value in return. Starbucks does, however, hope that the increased foot traffic will lead to greater revenues on Wednesday evenings as well as repeat customers.
As a whole, information sharing events are on the the rise. We identify this industry as being in the “growth” stage. This is evident in the expansion of TED Talk-branded events in the past five years. Additionally, around the United States, an increasing number of community creator spaces and innovation hubs have been hosting events focused on several different domains.
Why will consumers or businesses spend money on your product/service?
Consumers will spend money on coffee and refreshments, but they will also reap the rewards of education and experienced speakers on a number of current topics Wednesday evenings after work.
Describe areas of differentiation/competitive advantage for your product/service.
From this limited introspection, is this a viable product/service? What changes can/must you make to the product/service to make it viable?
COFFEE Talk at Starbucks will give the coffee shop the advantage of motion. Coffee shops without events and speakers can become stagnant, but the motion of public events and speakers propels the shop into a vessel of societal discovery. If Starbucks can generate COFFEE Talk, it will have a significant advantage over other coffee shops. This advantage will stem from the quality of speakers, and individuals will benefit from the communal atmosphere. They will learn new ideas, but they will also be in a position to discuss those ideas.
Section 2: Market and Customer
How attractive is this industry?
The coffee and snack shops industry is a 39.6 billion dollar industry with over 50,000 businesses. The industry had significant growth between 2011 to 2016 but is expected to have a decrease in growth from 2016-2021. Although annual growth is set to fall, the average consumer spending is set to increase which is one of the key external drivers for this industry.
The key competitor to Starbucks in this industry is Dunkin’ Brands Inc. Starbucks holds the majority of the market share with 43% while Dunkin’ only holds 21.8%. However when taking regional success into consideration, Dunkin’ dominates the east coast market.
Porter’s Five Forces:
Threat of New Entrants (Moderate)
Low barriers to entry
Barriers to success are significantly higher
Over half of new coffee shops change hands within three years of opening
Owner burnout is high because of demanding hours
High number of mergers and acquisitions
High cost of brand development
Bargaining Power of Suppliers (Weak)
High variety of suppliers
Large coffee supply
Diversity in supply chain
Bargaining Power of Buyers (Moderate)
Low switching cost
No single customer type has enough weight to significantly influence market pricing
Threat of Substitute Products or Services (Strong)
Low switching costs
Low switching cost
Large number of firms and a variety
Define the target market (who is the primary customer)? How large is this potential customer base?
Starbucks Current Customer Base
Ages 25-40=49% of sales (customer base focus)
Ages 18-24=40% of sales
Ages 13-17=2% of sales
Starbucks will primarily focus the age group of 25-40 with this new service. Because Starbucks will be rolling out this new evening event series in the Fort Collins area, we will also be capturing some of its secondary customer base (Ages 18-24) due to the fact that Fort Collins is a college town.
When targeting ages from 25-40, this customer base on average earns a higher annual income, are employed in professional careers, and value social welfare. The COFFEE Talks will be a forum for local professionals, entrepreneurs, and visionaries within this age group to network and advance their professional knowledge.
For ages 18-24, Starbucks creates a college atmosphere where students can write papers and meet fellow students. Starbucks attracts them by introducing new technology (ex. Mobile app), focusing on social networking, and creating a “cool” image.
How will you determine what price to charge for your product?
Our service will be free to the public as an approach to attract customers during evening hours.
What kind of market research would the company need to conduct to better understand the market? Conduct an initial market survey to assess potential customer reactions.
In the months leading up the launch of this new program, we plan to place iPads at Starbucks point of sale locations. Customers will be prompted to enter their email address and select from a list of possible COFFEE Talk topics. After clicking “submit” the customer will get a 20% off drink coupon to use during their next visit. In doing this, we will be able to collect data about customer interests in order to tailor the topics of the COFFEE Talks to the community. Because that data is also connected to an email address, we will be able to use the information for targeted marketing efforts once COFFEE Talks has officially launched.
Is there unmet demand in the market, or will you have to create demand?
Based on the immense success of Ted Talks in recent years, we believe that there is great demand for events such as Starbucks COFFEE Talks. Additionally, we expect this demand to be even higher in cities such as Fort Collins, CO that have a track record of innovation and community collaboration.
How will you promote your product?
Once Starbucks COFFEE Talks has officially launched, we will be able to launch a targeted marketing campaign using the email addresses and data collected during the market research phase. Additionally, we plan to advertise the events on the Starbucks’ mobile app, Facebook page, and physically within all regional Starbucks locations.
3. Operations, Production, and Supply Chain
What is the process you will follow from the idea stage, to having a tangible product or viable service, to taking the product or service to market, to achieving profitability? Develop a timeline that outlines this process. Include prototyping and product testing if necessary.
June & July 2017: Surveying / Data Collection
We will spend June and July of 2017 surveying customers at our Fort Collins Starbucks locations. iPads will be placed at all point of sale locations, and customers will be offered a coupon to use for their next visit in exchange for entering their email address and selecting what potential speaker topics they would be interested in attending.
July 2017: End of Month Test Event (Fort Collins)
At the end of July 2017, we will host a COFFEE Talks test event in order to gauge the community’s interest and involvement. The topic for this night will be based on the most popular topics selected during the data collection phase, and marketing efforts will take place in-store, via email, and via the Starbucks mobile app.
August & September 2017: Speaker Acquisition and Event Logistics
If the COFFEE Talks test event is a success, the team will continue on to plan Season 1 of Starbucks COFFEE Talks. The data collected during the surveying phase will be used to determine topics for COFFEE Talks and recruit the most desired speakers. At this time we will also acquire all necessary technical equipment for the seamless hosting of Starbucks COFFEE Talks.
September 2017: Marketing Campaign
September 2017 will be used to pull together any final details in the event schedule and market the upcoming Season 1 speakers to all Fort Collins Starbucks customers, as well as other potential customers in the broader Fort Collins community. The customer specific data collected in June and July will be used to implement targeted marketing campaigns via email.
October 2017 – March 2018: Season 1 Speaker Events
During October 2017 – March 2018, the team’s focus will be the flawless production of every Starbucks COFFEE Talks event. Each team member will fill out an evaluation form after each event in order to keep track of what has gone well and what has not on an event-to-event basis.
April 2018: Season 1 Value Assessment
After Season 1 of COFFEE Talks has ended, the team will use the month of April to assess the value that the events are creating for Starbucks. Brand image, revenues, and new customer acquisition will all be considered at this time.
May 2018 – July 2018: Season 2 Planning and Expansion to Other Stores / Cities (Tentative)
At this point, the team will decide to either completely retire the COFFEE Talks program, or make necessary pivots and begin the planning of Season 2. Assuming there is a Season 2, the team will consider the expansion of the program at this point, looking at the viability of additional Fort Collins stores and even additional cities in the United States. Season 2 will begin in August of 2018 and end in March 2019, making it longer than Season 1.
Will you produce the goods or services that you are selling or will you outsource production?
The company will outsource the service. Specifically, It will bring in innovative speakers to give the talks at its store in Fort Collins. It will also partner with various entrepreneurship companies that will provide the speakers. The selection of the innovative speakers will depend on the topic of interest and the target customers for the day. For example, the company will select a speaker who can appeal to the customers in the 25-40 age bracket when it needs to attract more of such customers. Thus, outsourcing under the correct conditions can be a practical alternative. Work can be performed at a little measure of the cost for a couple of makers with the right affiliation (Gray, 2010).
If you will produce the goods describe your supply sources and the process required to produce the goods.
Starbucks will need to acquire the necessary audio and visual equipment in order to host a guest speaker. Every location that will host Starbucks COFFEE Talks will need two powered speakers, a small mixer (at least 4 channels), two microphones, and a projector that can interface with both Macs and PCs. Every location will also have to purchase a small podium where the speaker can hold their notes.
Identify any legal/regulatory issues associated with your product/service. For example will you need FDA approval, special licensing, permitting, health inspections, or certification?
In order to protect Starbucks from last minute speaker cancellations or unsolicited litigation, we will require every guest speaker to sign a service contract. The legally binding document will create penalties for speaker cancellations and protect Starbucks in the event that the speaker is harmed in any way during the event itself. The document will also give Starbucks the right to capture video or audio from the speaker’s event, and Starbucks will be the owner of the media.
In addition to the speaker contracts, Starbucks will trademark the name “COFFEE Talks.”
If you are outsourcing production describe the process involved in finding/establishing a supply partner(s).
Starbucks will use multiple forms of recruitment to find speakers. In the topic surveys given to customers, there will be an option to check a box showing interest in being a speaker. Follow up emails will be sent to clarify what desired topics and credibility of these customers. Once topics are chosen, the events team will reach out to alike departments at Colorado State University to find professors and researchers credible enough to speak. Other approaches could look like reaching out to local professionals in specific topics, using speaker recruitment sites like Eagles Talent Speakers Bureau, or possibly recruiting speakers from within Starbucks.
Identify the areas of the company (and partner firms if required) that need to be involved to bring the innovation to market.
The company needs to involve marketing department to bring the innovation to market. The department will market the innovation and make the public aware of the new service, thereby attracting more customers. The company could also involve leading advertising and promotion companies to reach as many target customers as possible. The accounting and financial department should also be involved, particularly during the first stages of introducing the service, to determine the viability of new service and its effects on the company’s profitability.
What specific resources (e.g. skills, reputation, experience, networks, financial, technical, education, etc.) do you have that will lead to competitive advantage? If you do not have all or some of the needed resources, how will those be obtained?
Starbucks already leads in competitive advantage in most resources necessary for the event. The brand name is so powerful that everyone who is reached by our marketing will have some prior knowledge of the company. Considering coffee as the product focus, we are the leader in the coffee industry having doubled our main competitor’s revenue in 2015. Starbucks business model is profitable enough without these events taking place. If “COFFEE Talks” fails it will not substantially hurt or take down the company. Our store locations are built to create atmospheres for meeting and social interactions. The networking atmosphere directly aligns with the purpose behind “COFFEE Talks.”
As mentioned above, audio equipment is needed for the event itself. Beyond that, an event planning team will need to be formed to execute the marketing, recruitment and run the events. This will create new positions because in-store events do not already exist. Experience in, in-store event planning is little to none for local locations, so there is opportunity for flexibility in the overall creation. Our team of 4 will fulfill the roles and provide necessary KSA’s of the events team. The recruitment of credible speakers will provide the needed education on event topics.
What type of intellectual property protection (patent, trademark, copyright) will you need?
The only property protection we will need to acquire is a trademark for the name of our event. There’s currently no trademarks registered for “COFFEE Talks”. There are some registered for “coffee talk” and “COFFEE TALK” but they’re of different concepts. The registration may have some difficulties given how similar other trademarks.
What is your distribution channel(s)?
The company will distribute the new service through its local stores in Fort Collins. We will be bring in guest speakers from various domain to our local stores and to do that, we will collaborate with various companies and institution to provide us with speakers. To expand our customer base we will advertise our events through social media such as Facebook or Twitter and we will also be using starbucks app so our clients can receive notifications on their phone about upcoming speakers.
Section 4: The Team and Human Capital
Who will be the key members of the innovation team?
Jazmin Morales: Master Wizard, Talent Acquisition, Public Relations
Eli Pointer: Day of Event Logistics, Data Collection / Analysis of Surveys
Grant Robinson: Event MC, Data Collection / Analysis of Surveys
Said Akdi: Marketing, Corporate Relations
What qualifications does the proposed innovation team have (include bios of each member of the team)?
Experience in acquiring partners/sponsors/speakers
Previous role in handling PR for a large-scale event of 8,000 people
Has given a speech in front of 5,000 attendees
MC for student organization Young Life nights
Knowledgeable of event planning logistics
Extensive experience in live audio production as a Sound Engineer
Employment experience in event planning and management
Experience with event marketing (Fort Collins music venues)
Negotiator and collaborator with other companies and institutions
Experience in supply chain
Good buyer/supplier relationship
Experience in marketing and advertising
Will the business fit into the current company structure or will you establish a “firm within a firm” (i.e. with a separate organization structure and different reporting relationships)?
COFFEE Talks will be a separate business structure within the the existing reporting framework. Because COFFEE Talks has nothing to do with the direct production and sale of food and beverage, it does not make sense for the COFFEE Talks team to report to existing store managers. The COFFEE Talks team will work as a separate business unit with the goal of producing successful events and building foot traffic in Starbucks locations. The team will be responsible for working with existing store managers in order to coordinate the COFFEE Talk events, however this will not be a formal reporting relationship.
How many employees will be needed to bring the innovation to market, and what types of skill sets should they have? Will you hire them; move them from other areas of the company, or a combination of both?
Starbucks will need to initially hire four new employees which will be comprised of the innovation team mentioned above. These four employees will be in charge of rolling out Season 1 of COFFEE Talks and will set up the foundation to hire more people with the expansion plans. The four initial hires will need to have connections in the community, effective negotiation skills, excellent organizational skills, and exceptional customer service skills. The connections in the community will assist in the acquirement of partners/speakers for the event. Organization and negotiation skills will be needed to find the best talent for COFFEE Talks and the customer service skills will be needed to maintain positive relationships with partners. Although Starbucks will only be hiring four employees, they will not be the only ones designated for the project. The team that created the idea for Starbucks Evenings will be consulted to use the information and research they have acquired and a few employees will be transferred to assist in the merging of the staff.
Will the proposed business fit into the current company culture or will you establish a “firm within a firm” (e.g. with a different organizational culture)?
Although COFFEE Talks will be operating separately from the Starbucks reporting framework, it will continue to adopt the company culture that has grown from the organization. Starbucks is known for having a warm and friendly atmosphere, not only in its stores, but within its entire corporation. Their history of diversity and inclusion help them create that culture of empowerment, one that has helped them foster innovation, economic growth, and new ideas. Starbucks also hosts many events that keep in mind their stakeholders and places an emphasis on their corporate social responsibility. Forbes has rated Starbucks as the number 1 happiest retailer to work for and that directly relates to their company culture. With the success of Starbucks and its correlation to their culture, it only makes sense to adopt that culture in hopes of finding similar success.
What type of partnerships or other agreements will you need to establish with other firms? What will be their role? What areas of those firms will need to be involved? What is the incentive for partner firms to participate?
The company will need to enter into agreements with popular advertising and publicity companies to promote its new services. It is important to realize that product/service promotion is one of the primary elements of marketing. It helps create awareness of the product/service’s existence among potential buyers (Kotler & Keller, 2012). Therefore, the publicity companies will be responsible for promoting the company’s new service to as many potential customers as possible. The money paid out to such companies for their services will be their incentives for participating in the project.
Starbucks will establish partnerships with entrepreneurship companies. Such companies will provide Starbucks with the speakers who will give the talks. It will need to specifically involve the top leadership/management of such companies, particularly their founders, to speak on the various elements of their specific industries. The exposure and publicity that the entrepreneurship companies will gain will be their incentives for participating in the project. As stated in the preceding paragraph, each talk will be highly promoted through leading publicity companies. The promotion messages will include information about the time, venue, and providers of the talks. Therefore, the publicity companies will also promote the entrepreneurship companies providing the speakers.
Which stakeholders will you need the support of, and how will you go about gaining their support?
Starbucks’ stakeholders account for many different aspects of their business. The company’s partners/employees, customers, shareholders, suppliers, and community members are all considered to be a part of the main stakeholder group. In order to implement COFFEE Talks, all of those main stakeholders will need to be in support of the project. Each of the stakeholders have such value for Starbucks that most of the things outline in their CSR revolve around ways to improve society for them. Knowing that, it’s essential to get the support of all involved and to do so, the innovation team would involve each stakeholder during the process but in separate occasions. The partners, suppliers, and shareholders will be consulted in the creation of the events and will be the basis on which the first events are formed. Any company sponsor or partner network would be given the opportunity to host the first few events in Season 1 and be the speakers. As the process furthered along, the customers and community members would be brought in and used to develop Season 2 of COFFEE Talks. The main way that support will be received will be through the common interest of creating and investing in opportunities for people around the world.