Case Study
Answer all questions.
Extract 1: Coffee prices on the rise
Coffee prices hit a record 14-year high this month, and it's only a matter of time before coffee lovers will have to pay more in stores and coffee shops. A series of bad news has affected the market for coffee – bad weather in South America is threatening crops; Brazil and Vietnam are talking about hoarding their stocks; and US stockpiles are reportedly at 10-year lows. Moreover, the current behavior of prices reflects uncertainties concerning short-term coffee supplies. As uncertainties persist, investors are placing significant bets on where prices are headed.
Adapted from CNNMoney.com (February 2011)
Figure 1: Coffee prices (cents per pound)
[pic]
|[pic] |[pic] |
Source: Starbucks, Bloomsberg news
Extract 2: Starbucks gears up for slowing consumer traffic in the US
Premium coffee-chain Starbucks is offering promotions in stores across the US especially in areas hardest hit by the financial crisis a year before to counter the decline in domestic store traffic that led to a decision to close 600 stores. It is giving away 12-ounce iced coffees to customers who present a "iced brewed coffee card" voucher distributed in stores and newspaper inserts. It has also introduced Via, a new instant coffee product to rump up its profit level.
Lots of people still favour Starbucks coffee, but coffee selection is improving elsewhere too. McDonald’s has introduced an improved coffee blend aimed at drawing away Starbucks' customers. In addition, Dunkin' Donuts is gaining popularity over Starbucks as a coffee destination with ample seating and a tasty menu board that grows incrementally.
Adapted from USAToday.com and Forbes.com (2009)
Extract 3: Venezuela maintains strict price regimes on basic foods
Since 2003, the Venezuelan President has maintained a strict price
Extract 1: Coffee prices on the rise
Coffee prices hit a record 14-year high this month, and it's only a matter of time before coffee lovers will have to pay more in stores and coffee shops. A series of bad news has affected the market for coffee – bad weather in South America is threatening crops; Brazil and Vietnam are talking about hoarding their stocks; and US stockpiles are reportedly at 10-year lows. Moreover, the current behavior of prices reflects uncertainties concerning short-term coffee supplies. As uncertainties persist, investors are placing significant bets on where prices are headed.
Adapted from CNNMoney.com (February 2011)
Figure 1: Coffee prices (cents per pound)
[pic]
|[pic] |[pic] |
Source: Starbucks, Bloomsberg news
Extract 2: Starbucks gears up for slowing consumer traffic in the US
Premium coffee-chain Starbucks is offering promotions in stores across the US especially in areas hardest hit by the financial crisis a year before to counter the decline in domestic store traffic that led to a decision to close 600 stores. It is giving away 12-ounce iced coffees to customers who present a "iced brewed coffee card" voucher distributed in stores and newspaper inserts. It has also introduced Via, a new instant coffee product to rump up its profit level.
Lots of people still favour Starbucks coffee, but coffee selection is improving elsewhere too. McDonald’s has introduced an improved coffee blend aimed at drawing away Starbucks' customers. In addition, Dunkin' Donuts is gaining popularity over Starbucks as a coffee destination with ample seating and a tasty menu board that grows incrementally.
Adapted from USAToday.com and Forbes.com (2009)
Extract 3: Venezuela maintains strict price regimes on basic foods
Since 2003, the Venezuelan President has maintained a strict price