Using the "Trouble Brews at Starbucks" case by Lauranne Buchanan and Carolyn J. Simmons, address the following:
1. Define the problem from the case
2. List an alternative
3. Provide a recommendation.
Since 2007 Starbucks has been faced by a number of challenges that have seen its stock prices fall by more than 50% within a year period. One of the major problems that it faced is the change in customer perception about the Starbucks experience and value an in effect a change in the customer profile of the average Starbucks customer. The rapid expansion of the company to numerous locations, the ease with which Starbucks was accessible and the use of licensees in selling Starbucks products changed customers' perception of Starbucks from what it originally was and high end customers who bought Starbucks coffee dropped shifting the customer profile to lower income groups. Similarly, though the company used expansion and opening up of numerous stores as its advertising tool in an area, the cost of expansion far exceeded the positive impact on the bottom line (Buchanan & Simmons, 2009).
The proliferation of drive through windows and in store food items took Starbucks closer to a fast food store deviating from its original vision of creating a "third place". People purchased more take-outs than sit-ins and the stores brand changed from a luxurious place where one can go and enjoy high end coffee to an affordable luxury drink. This brought down the value that had all along bee place on the product. Another problem was the commoditization of the Starbucks brand. This saw the introduction of numerous products selling under the Starbucks brand name from coffee, CDs, books and other merchandise to food items such as sandwiches. This eroded the Starbucks brand value from being seen as high end quality freshly ground coffee (Buchanan & Simmons, 2009).
Similarly, baristas who had been specially trained to brew coffee specially and entertain coffee drinkers had cross sell other food items. This not only reduced the efficiency of the employees but also changed the whole idea behind Starbucks as a coffee house with an Italian espresso bar experience. Not only did the sandwiches change the "Starbucks experience" by ...
Using the "Trouble Brews at Starbucks" case, the response defines the case problem, including a comparison to other businesses in the market, identifies an alternative marketing strategy, and suggests a recommendation for Starbucks going forward.
Starbucks Case Analysis
1. What is your impression of the world wide operation of Starbucks?
2. Conduct a SWOT Analysis of Starbucks.
3. Does Starbucks have a competitive advantage and/or a competitive strategy? Justify your answer.
4. Describe the components of the Starbucks value chain.
5. What strategic alternatives are open to Starbucks? Explain and justify your answer.View Full Posting Details