Starbucks

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For the purpose of this assignment, I will choose Starbucks:

One of the major strategic issues faced by Starbucks is managing its growth and the same time; maintain its identity as a premium brand. Starbucks announcement that it will close 600 stores in the US is a long-overdue admission that there are limits to growth. Opening new stores and launching a blizzard of new products create only superficial growth. Such strategies take top management's eye off of improving same store sales year-on-year. Starbucks introduced many new products to broaden its appeal. These new products undercut the integrity of the Starbucks brand for coffee purists. They also challenged the baristas who had to wrestle with an ever-more-complicated menu of drinks. With over half of customers customizing their drinks, baristas hired for their social skills and passion for coffee, no longer had time to dialogue with customers.

These strategies negatively hit a premium brand like Starbucks. None of this need have happened if Starbucks had stayed private and grown at a more controlled pace. To continue to be a premium-priced brand while trading as a public company is very challenging. Tiffany faces a similar problem. That's why many luxury brands like Prada remain family businesses or are controlled by private investors. They can stay small, exclusive and premium-priced by limiting their distribution to selected stores in the major international cities.

Reference: http://discussionleader.hbsp.com/quelch/2008/07/how_starbucks_growth_destroyed.html

In order to retain its exclusivity, Starbucks should learn from premium brands like Prada and limit its distribution to select stores in major international cities, rather than opening branches at every corner ...