Starbucks Dunkin Caribou Peet’s Coffee McDonald’s Krispy Kreme

Donuts Coffee and Tea Doughnuts

(KKD)
Critical Weigh Ratin WT Ratin WT Ratin WT Ratin WT Ratin WT Ratin WT
Succes t (WT) g Score g Score g Score g Score g Score g Score
s
Factor
Adverti .05 4 .20 3 .15 4 .20 3 .15 3 .15 3 .15
sing

Produc .30 4 1.20 3 .90 3 .90 3 .90 3 .90 2 .60

t
Quality

Price .05 2 .10 3 .15 2 .10 3 .15 3 .15 2 .10

Compe
titivene
ss
Produc .10 3 .30 4 .40 2 .20 2 .20 4 .40 2 .20
t
variety
Financi .05 3 .15 3 .15 2 .10 4 .20 4 .20 2 .10
al
Positio
n
Custo .10 4 .40 2 .20 3 .30 2 .20 3 .30 3 .30
mer
Loyalty
Global .15 4 .60 3 .45 4 .60 3 .45 4 .60 2 .30
Expansi
on
Custo .20 4 .80 3 .60 4 .80 3 .60 4 .80 4 .80
mer
Service
Total 1.00 3.75 3.00 3.2 2.85 3.5 2.55

Legend: Rating

1- Major weakness
2- Minor weakness
3- Minor strength
4- Major strength
Starbucks shows highest score of 3.75, second is McDonalds which is 3.50 and the lowest score
of 2.80 which is Peet’s Coffee and Tea. The competitive profile matrix (CPM) weighs product
quality. The product quality (0.30) is the most important item on the list of critical success
factors because in every product, quality is the one thing that the consumer looks into and it
helps to maintain customer satisfaction and loyalty thus, Starbucks score on this factor as the
highest in comparison to their other competitors. Customer service rates .20, Global expansion
0.15, Customer Loyalty .10, Product Variety .10, Price Competitiveness .05, Financial Position .
05, Advertising .05. The advertising weight, 0.05, CPM does not reflect a high level in
ranking the critical success factors, but does release valuable information in comparison
to their competitors on the CPM.

The weight on each factor depends on their importance in the company thus; in this analysis the
quality of the product is the most important because this is what the company focuses on.
The Current ratio is another test of a company's financial strength. It calculates
how many assets are likely to be converted to cash within one year in
order to pay debts that come due during the same year. An acceptable current ratio
varies by industry. The more liquid the current assets are, the smaller the current
ratio can be without cause for concern. Starbucks current ratio is 0.8x for the year 2008
compared to 0.79 x for the year 2007. This can be considered as a poor current ratio since it
should not be seriously concerned and more asset is to be needed to cover up current liability or
short-term debt.

Quick Ratio is another test for company’s financial strength that measure the firm’s ability to pay
off short term obligations without relying on the sale of inventories which is important.
Inventories are typically the least liquid of a firm’s current asset, and if sales slowdown, they
might not be converted to cash as quickly as expected. Starbuck’s quick ratio is 0.48 for the year
2008 compared to 0.47 for the year 2007. This can be indicated as a poor quick ratio, therefore if
the accounts receivable can be collected, the company can pay off its current liabilities even if it
has trouble disposing of its inventories.

Fixed Asset turnover ratio is one of the measures of activity and measures how effectively the
firms use its plant and equipment. Starbucks has a good fixed asset turnover which means that
the company is using its assets more efficiently than other competitors in the industry policy and
they have the right amount of fixed asset relative to its sales.

Total Asset turnover ratio measures the turnover of all the firm’s asset. Starbucks has a good
total asset turnover which means they are generating enough sales given its total assets.

Days sales outstanding represents the average length of time the firm must wait after making a
sale before receiving cash. Starbucks has a poor days sales outstanding which means that
customers are not paying their bills on time that deprives the company of funds the funds that
could be used to reduce some costly capital.

Inventory turnover shows how many times the particular asset is turned over during the year.
Starbucks has a poor Inventory turnover which means it is holding too much inventory therefore
it is unproductive and represents an investment of low rate in return.

Total debt to total asset measures the percentage of funds provided by creditors. Starbucks has a
poor total debt to total asset which indicates