Beanz vs. Starbucks Preliminary Memo

Beanz vs. Starbucks Case Analysis

Problem Framing

Small time coffee brewers such as Beanz that have been established for years are beginning to find themselves in a head to head competition against corporate powerhouses. With more and more mainstream entities like Starbucks, Tim Horton’s, and others popping up all around the globe, small business owners have to find a way stand out, or perish.

Causes of the Problem

For years, the owners of Beanz have had no problems maintaining a strong and loyal customer base. Because of this, they have had very little direct competition from Starbucks and other coffee business in the area and have built up the reputation as being one of the preferred coffee shops in their town. Despite this, they are beginning to experience some financial difficulty in the form of decreased profit margins. This is not due to a decline in sales, but instead, to a rise in the cost of production. That being said, Beanz is now faced with the challenge of how to increase revenue or decrease production costs. In order to do this, they need to consider ways to draw away customers from the other coffee shops in the area as well as improve their methods of production. On top of that, the owners are trying to find ways in which they can increase the amount of free time they have for themselves.

Alternative Solutions

Before going into the possible solutions, let us first take into consideration what the owners envision for the future of their business, as well as well as their personal lives. For one, they want to give their business a chance to continue to grow as far as profitability goes. They also want to be able to ensure that Beanz remains a community driven entity. Above all, they want to be able to enjoy more free time for themselves, as they have been pouring all their available time in the company since its debut in 1996. That being said, the owners of Beanz have a few different approaches they can take in order to maintain...