STRATEGIC MANAGEMENT

ASSIGNMENT NO 03

NAME: JANNAT ASLAM

STUDENT ID: 9470

TOPIC
CASE STUDY: (CARIBOU COFFEE: WHEN YOU ARE NUMBER TWO,
YOU TRY HARDER)

SUBMITTED TO: SIR ASIF IQBAL

 CARIBOU COFFEE: WHEN YOU ARE
NUMBER TWO, YOU TRY HARDER

BACKGROUND:
Caribou Coffee was founded in December of 1992 by Kimberly and John Puckett. The
Caribou Coffee concept was created after the company's founders backpacked through
Alaska. On the summit of Sable Mountain in Denali Park, they decided they wanted to build
a company to capture the spirit of accomplishment they felt during the climb. They began
plans to build a special company that would bring the mountain experience into local
neighborhoods where customers could find a place to "escape the daily grind" each and
every day. On the descent, they saw a herd of wild caribou. The beauty and incessant
movement of these caribou seemed to be a fitting name for a company that aspired to both
rapid growth and high quality. The company was founded with the intent of building a
leading national specialty retailer in the high growth industry of gourmet coffee.
Caribou Coffee Company, Inc. is a privately held, neighborhood-based, specialty retailer of
high quality coffees, teas, bakery goods, and related merchandise. The Minneapolis-based
company operated 125 stores in six states at the beginning of 1999 and was estimated to be
the second largest company-owned and operated coffeehouse chain. Caribou Coffee is
positioned to take the leap from regional operator to national player in the rapidly growing
gourmet coffee industry.

PROBLEMS:
After applying so much strategies and try to differentiate as much as they can from the
competitor Starbucks, Caribou coffee still didn’t make it on number 1 position. After
studying both firms thoroughly I think that there are something where caribou coffee is
lacking. Some examples are given below:
 Firstly, the difference is that you can find Starbucks Coffee’s in every state, but
Caribou Coffee is only in 18 states. Its mean that the market is very limited.
 They are not expanding as fast.
 Not every people know them like they are aware with Starbucks which effect the
preference factor as people is more aware with the Starbucks name and popularity
they prefer them instead of caribou coffee.
 The pricing is on par with Starbucks.
DIFFERENTIATION TECHNIQUES:
Caribou Coffee is growing very well and implementing every strategy to make itself stronger
and sustaining its position as well. They use different techniques and trying harder to be no
one. Some of their workings are given below:

 SIZES:
Starbucks provides a comfortable setting for urban customers who prefer references to sizes
such as “venti” and “grande.” Caribou has chosen to use the more common names of
“small,” “medium,” and “large” that are familiar to most customers.

 ATMOSPHERE:
Caribou’s coffeehouses are designed with a focus on customer comfort and are modeled
after mountain ski lodges and Alaskan cabins. Décor includes fireplaces, wooden ceiling
beams, and comfortable furniture such as large chairs and sofas. They also provide a
children’s play area with toys and games, contributing to a family friendly atmosphere.

 WIFI AVAILABILITY:
Caribou formed an alliance with Wandering WiFi to become the first coffee company to
offer free WiFi service and the latest security technology to its customers. Wandering WiFi
president, John Marshall believes that Caribou Coffee is committed to providing the most
customer convenience, excellent coffee, and a comfortable atmosphere.
These are the same techniques that caribou coffee used to differentiate itself. Because of
its differentiation efforts Caribou Coffee continues to enjoy its success as the number 2
specialty coffee company in the United States, a position it intends to further solidify in the
future. The company has positioned itself for expansion across multiple business channels
as a base for profitable growth in the future. They are successful to sustain their position but
still they are not number one and they are keep growing.

RECOMMENDATION AND SOLUTION:

After so many techniques why they are not getting a no one positions. For that they have to
focus on their lacking’s.
 Firstly, they should try to expand their market more.
 They should try to focus on their marketing program as well so that more people
start to know them.
 They should try to offer more discounts and promotions.
 They need to increase their product line as well so that every variety will be easily
available on caribou coffee.
 They need to look on their pricing techniques on the comparison of Starbucks.

THANK YOU