In Class Sit Analysis Caribou.doc
BUS 2142 Principles of Marketing
Situation Analysis Follow-up, Caribou Coffee
Company
History/
Background
Company
Philosophy
Company
Trade
Area
Sales
Analysis
Situation Analysis Section of a Marketing Plan
Competition
Analysis
Market
Share
Analysis
Market
Potential
Analysis
Product or
Service
Line
Analysis
Customer
Analysis
Basic
Positioning
Strategy
Name: _______________________________________________
Distribution/Sales
Force Analysis
Pricing
Analysis
Marketing
Communication
Analysis
Market
Research
Analysis
Company
Resource
Analysis
Trend
Analysis
You should work alone on this exercise, with no assistance from a class member. When you’re done, take a break until all other class members have finished.
Directions: Skim the attached article. Then consider the following list of facts taken from the attached article. Assume that you’re developing the fact base the situation analysis section of a marketing plan for Caribou Coffee.
In which subsection would each of these facts be included? Assign the number corresponding to each fact to the most appropriate section. Each fact should only be assigned once, to a single category.
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Caribou has nearly twice as many stores as it did in 1999.
No. 2 Caribou Coffee is setting its sights on market leader Starbucks.
Starbucks has 8 to 10 percent of the total coffee market.
Starbucks has 7000 stores to Caribou’s 250.
Caribou is the nation’s No. 2 coffeehouse chain.
Caribou’s strategy is to offer a different store experience from Starbucks. Homey interior design vs a Europeaninspired design.
Caribou offers a wider variety of specialty drinks than Starbucks
Research shows consumers prefer the taste of Caribou products.
Minneapolis is the only market in the country where Starbucks is No. 2. There are 45 Starbucks in Minnesota and
more than 100 Caribous in the Twin Cites area alone. – Caribou entered the Twin City market first, built stores
and never gave up the lead.
If Caribou wants to grow, it needs prime locations in high-traffic areas. (Over the past 10 years Starbucks has
gotten dibs on a lot of choice real estate across the nation.)
There’s no place left [in the U.S] where Caribou wouldn’t be competing with Starbucks head to head.
Caribou was founded in 1992 by two men who saw an opportunity in the new market for gourmet coffee. It grew
quickly in its early years, then stalled as it struggled to find the cash for further expansions.
In 2000, the company’s founding investors sold nearly 90 percent of their equity to the Atlanta venture capital firm,
Crescent Capital Investments, solving the company’s financial problems.
The most recent CEO, Dempsey, left Caribou last year over disagreements with the new owners over the speed
of Caribou’s growth.
The new owners want Caribou to be the Burger King to Starbuck’s McDonalds.
The new owners want to build 100 stores a year.
The Caribou CEO, Michael Coles plans to double Caribou’s size in four years. In 2003, 50 stores were added.
This year 75 stores are planned. 90 to 100 units are planned to be built in 2005.
Caribou had $120 million in sales last year (2003). The company has been profitable for several years. Last year
they earned about $14 million before interest, taxes, depreciation and amortization.
Starbucks has $14 billion in sales and 7,200 stores.
Caribou has 3000 employees.
Ten years ago, Starbucks had only 272 stores. About then they went public and launched an era of “dizzying”
growth.
22. Caribou isn’t suggesting that they duplicate the growth rate of Starbucks stores, but they believe there is room for
them to continue their growth.
23. The coffeehouse business is highly regional; other than Starbucks and Caribou, few chains have as many as 100
stores.
24. Minneapolis-based Dunn Bros. Has about 35 Minnesota shops and just opened one in Madison, Wis. It’s also
entering the Dallas-Ft. Worth market, planning to build 60 stores there in the next five years.
25. The biggest issue for Caribou is finding good locations for new stores.
26. “Everybody is looking for that 1,400 to 2,200 square foot endcap in a strip mall. Not just coffeeshops but noodle
shops and sandwich shops.
27. Caribou has recently added new real estate experts to the organization to confront this issue.
28. In addition to planned growth in company-owned stores, Caribou is exploring franchising, both here and abroad.
29. The company recently launched a commercial division to supply restaurants, grocery stores and institutions.
30. The company has recently opened coffeehouses on three corporate campuses: West Publishing, Best Buy,
General Mills.
31. The company is looking to expand its presence in airports – seeking partnerships with those companies, such as
Host Marriott, who operate airport locations under contract.
32. The company is moving to a new factory/office complex in Brooklyn Center, MN.
33. While most of the immediate growth will focus on Caribou’s 11 core markets – which include the Twin Cities,
Chicago and Detroit – the company also intends to introduce the brand to Cincinnati and Richmond, VA.
34. Starbucks doesn’t appear to be concerned about Caribou knocking it down from their No. 1 perch. They believe
there is room for many different competitors that can meet different customer’s needs.
35. A restaurant and specialty analyst believes that nobody is likely to unseat Starbucks, but that doesn’t mean other
coffeehouse chains can’t succeed.
36. The analyst notes that Caribou does well in the Twin Cities competing with Starbucks. If they execute the brand
well, pick good sites and continue to hire and train good people, they should continue doing well.
37. In 2003, sales at Caribou stores that were open at least one year, were up 7 percent.
38. The CEO said that Caribou simply needs to focus on its strengths: excellent coffee, appealing ambience and
good service.
39. Caribou’s CEO notes that Caribou sells a product that is more expensive per pound that the most expensive
steak – and it’s a product nobody needs. “We have to give that quality experience, because no customer ever has
to come back.”