ECO 518 Case Study 1 : Starbucks Coffee: Buy Low and Sell High
Wong Tsz Wun, Raymond
California InterContinental University
Abstract
This paper is a case analysis of coffee market. The purpose of this paper is to study the
coffee market is company from a perspective of a Strategic Manager through examination
of the information available on the corporate Web site. This paper has three main sections.
The first section states the reasons why the strategies pursued by Pfizer were mainly
emergent. In other words, Pfizer’s strategies emerge over time and have been radically
reshaped. The second section is a presentation of the five forces analysis. It helps to
identify the five most common environmental threats faced by Pfizer in terms of the threat
of entry, the threat of rivalry, the threat of substitutes, the threat of suppliers, and the threat
of buyers. The five forces analysis shows that Pfizer is facing low environment threats.
The third section explains how to use the VIRO framework to construct the cash-flow
analysis which is a part of the present-value calculation. VIRO framework stands for the
four questions a Strategic Manager must ask about a resource or capability to determine its
competitive potential. They are the question of value, the question of rarity, the question of
imitability, and the question of organization. The answers of these four questions are
positive. In other words, the resources and capabilities of Pfizer are valuable, rare, costly
to imitate, and organization is organized to exploit to full potential.
Case Analysis
Emergent Strategies of Pfizer
As shown on Pfizer Web site, Pfizer has been “evolving to meet the needs of a changing
society” and they “have continually evolved …to keep pace with the needs and
expectations of our stakeholders and society as a whole” (About Pfizer, Pfizer).
Obviously, Pfizer has modified its strategies to accommodate market changes and admits
that the strategies used have “emerged over time” and “radically reshaped” to gain
competitive advantages. Therefore, strategies pursued by Pfizer were largely emergent
(Barney; Hesterly, P. 20).
Pfizer was founded as a fine-chemical business in 1849. Pfizer has specialized in
chemicals research and manufacturing for at least 80 years. As showed in the history
section of Pfizer Web site, Pizer was first founded as a fine-chemicals business. Their first
product is santonin which is “an antiparasitic used to treat intestinal worms”. 13 years
later, Pfizer launched” their first domestic production of tartaric acid and cream of tartar,
