Cataracts Coffee
In 1971 by three founding members; it was known as Cataracts Coffee, Tea and Spices. They were not selling beverages instead they sold coffee beans.
By the next year itself they opened a second one In same Seattle, Washington. In early 1980 the management change took place while one of the founding members left Cataracts and Jerry Baldwin became a CEO. When Howard Schultz joined the company and took charge of marketing and overseeing the retail stores in two years Cataracts reached a milestone by acquiring five stores in San
Franciscans Pet’s Coffee and Tea chain. Although Schultz succeeded in acquiring still his proposal to start selling beverages were not approved and implemented by the management. But to test as a trial for selling beverages, in its fifth shop it first introduced espresso bar to sell coffee beverages in 1984, which became a huge success. But still the management was resistant to extend this espresso bar to Its other outlets.
This made Schultz to leave the organization and start one of his own IL Gleaner Coffee Company, by bringing Italian style espresso bars to America.
And opened several branches In 1 986 which made the founding members of Cataracts to support and Invest money In Schultz Coffee company. By the next year 1987, founders of Cataracts Coffee Company decided to sell the company while one of the member Baldwin kept the ownership of Peers. This time Schultz acquires the Cataracts and re-branded all of his II Georgian Coffee Houses with Cataracts in 1987. In 1992 Cataracts became public when it owned 165 outlets by that time. It started its first outlet outside of North America in 1996 in Tokyo, Japan.
In 2003, April, it researched AFC Enterprise’s Cattle’s Best Coffee and Termination Italian and made them all to Cataracts outlets. This made Cataracts to have more than 6,400 outlets all over the world in May 2003. Although it reached its height by the year 2004 Cataracts baristas In Manhattan organized a union to claim the starting wage to be $7. 75/hour Is not a living wage in New York and they were also not given guarantees for Mullen number of hours. This supported the Retail Workers union 10/660 to file unfair labor practice suit against Cataracts.
And apart from this there was an issue hat the organization started threatening its employees and bribing them to influence the Baristas union vote.
In the same year 2004 in October the organization aired “Hear Music” along with XML Satellite Radio, featuring “ever changing mix of the best new music and essential recordings from all kinds of genres” for 24 hours. “The Way I See it” promotion by Cataracts also brought protest against the promotion by the conservative Christian group in the year 2005.
In the same year Cataracts planned to donate funds and supplies to the hurricane Strain relief effort, which included both money and supplies such as tea, coffee and water. In October 2005, In one of the outlet Abs’s 20/20 investigation found that they were selling decaf with caffeine. For this, the organization emphasized that It will eliminate this error by re- emphasizing their operating procedures and that Incident was Just an error. This was both positive and negative aspects can be seen from the evolution of Cataracts.
This Porter’s Five Forces were analyzed based on the current situation. Figure 1 :Porter’s Five Forces Rivalry Among Existing Competitors: In the present condition the competition between the existing competitors were very high. The main competitors were Costa, Dunking Donuts, McDonald, Caribou Coffee, apart from this local coffee shops and cafes were also rivalry to Cataracts. Bargaining power of buyers: The bargaining power of buyers is also very high because customers were provided by various offers from other players in the field.
Threat of substitute: For Cataracts the threat of substitute to its products and services is in substantially level.
This is because the coffee provided by Cataracts can be substituted with other beverages such as tea, soft drinks and Juices and water and also energy drinks. When e consider a place where people meet and spend time with friends and family in a relaxing way can choose pubs or bars as a substitute for Cataracts.
Bargaining power of suppliers: Cataracts is mainly depended on Coffee, which is having very high demand because globally in some geographical areas only it is produced. This makes the suppliers to be in the upper hand with the bargaining power of suppliers to be very high. Along with this the issues related to African Coffee producers, who were treated unfairly by Multinational companies came to an end by the efforts taken by No’s also influences the suppliers power to be high.
Threat of new entrant: The threat of new entrant is low for Cataracts. This is because the beverage industry, especially coffee industry is highly saturated and also needs substantial financial resources to invest in buildings and properties in order to enter the market. SOOT analysis Strengths Weaknesses Global retail footprint Brand identity Ensures quality by acquiring quality beans Variety Locations Expanding operating margin brings more risk Opportunities Threats Depends mainly in US market Inorganic growth opportunities
On-the-go lifestyle Partnerships Expansion of business to other areas all over the world Emerging market should be focused Intense competition commodity costs – high costs for coffee beans and dairy products. Proceedings Cheaper alternatives Over exposure Higher Legal From the SOOT analysis of Cataracts we can understand the organization is having has with it. It should enter new markets and mainly emerging markets and it should ensure that its products and services were suitable for the local market.
Both pull and push strategy should be used according to the regional market.
