editors. * Coffee Chain * Starbucks Corporation is an international coffee company and coffeehouse chain based in Seattle, Washington. Due to its large size, Starbucks sets trends for the industry that can be backed up by the volume of their delivery.Exactly how long Starbucks can dominate the market depends on Starbucks itself. On the other hand, during economic downturns, the vast number of stores will become a huge financial liability. * •Opportunity * o The company has the opportunity to expand its global operations. * •Weaknesses * o The organization has a strong presence in the United States of America with more than three quarters of its cafes located in the domestic market. The large number of stores is a huge asset or a liability, depending on how one assesses the situation.If there is a strong economy and people have disposable income, then there is a benefit on having so many stores to generate revenues. Acasestudy.com © 2007-2019 All rights reserved. Starbucks Coffee Case Study Solution Current Ratio: The Starbucks current ratio was 0.08 and 1.29 in 2008 and 2009 respectively. On January 8, 2008, Howard D. Schultz returned as CEO of Starbucks after a gap of eight years, replacing Jim Donald. Download full … Starbucks has a large number of stores for coffee outlets, all of which are owned outright by the corporation and no franchisees. Full Leaf Tazo Tea Lattes and Tazo Tea Infusions are the company’s new tea offerings through which it hopes to attract tea drinkers (Edwards). Starbucks found a niche market where it identified what makes its customers happy, and has delivered it to them. A case study on re-branding of the Starbucks brand provides a concrete example of how a company can go about reducing undesirable consumer responses to changes to one of their favorite brands. This way the supply network is only slightly disrupted at the retail and service end. After the 2007/08 crisis, Starbucks had to rebuild its customer relationships and show the world that it cared for quality and consistency. 6 Effective Content Marketing Strategies You May Have Overlooked, Market Analysis Definition (With Explanation and Examples). How about receiving a customized one? Plans and strategies * Global Business * Competitors * Starbucks is competing in an industry where marketing principles has to follow the differentiator strategy, or it risks losing market share. Starbucks is one of Fortune magazine’s 100 Best Companies to work for in 2008 and is Business Ethics 100 Best Corporate Citizens for the fourth year. Starbucks Corporation, an American company founded in 1971 in Seattle, WA, is a premier roaster, marketer and retailer of specialty coffee around world. * Our Stores – It’s about enjoyment at the speed of life – sometimes slow and savored, sometimes faster. This study offers an in-depth analysis on the closedown of a Starbucks café, a foreign firm, and its penetration in the China. Any negative changes in the domestic market could severely hurt Starbucks viability as a firm. Starbucks has been known as the “anti-fast food” chain, and any perception that it is now competing with McDonald’s in bare-bone products and services could risk brand devaluation.Starbucks’s most loyal customers might start to see its stores as being no different than any other McDonald’s store, and move to rival coffee specialty stores or independent coffee shops. Starbucks also provides a card for corporate sales, which are used for extrinsic rewards to show employee appreciation for a job well done, or a gift to client or a vendor. They saw an opportunity in its under-utilized retail locations, which remained relatively empty after 11 a.m. Promotion: Starbucks has implemented numerous promotions to reach its target markets.Promotions are listed as follows: • One of the promotions that Starbucks has used is the Starbucks Card. Starbucks implemented over 100 ideas. Starbucks soon realised that when it comes to co-creation, the platform you need very much depends on the problem you are trying to solve. Schultz shot off a letter to the employees on the day he took office once again as CEO. They had also stated this as a reason to hike prices. Eventually, Starbucks teamed up with Mutopo, a social co-creation agency that led a group of environmentally conscious, social-media savvy entrepreneurs to solve this problem. In 2009, it closed another 300 stores and laid off 6,700 employees. If customisation slows down in-store processes, such initiative can be unsuccessful. The company broadened the portfolio around coffee by adding desserts, snacks, and sandwiches. The organisation must never look desperate or too keen to increase its sales. The new stores attempt to “localize” Starbucks stores with no Starbucks logo on any of the products being offered there, and instead have the specific street address as the brand name (Allison). The world's largest coffee retailer, Starbucks, pulled itself out of the financial meltdown of 2008 by aligning its operations with customer demands through social media. In the beginning of 2008, Howard Shultz returned as CEO of Starbucks hoping to return Starbucks to its pristine company it once was and to renew its compromised core values that had resulted from the company’s growth spurt (Grant 450). ALIGNING BUSINESS OBJECTIVES AND SOCIAL MEDIA ACTIONS IS KEY. In 2008, the marketing teams had started a promotion to increase customer visits to stores during breakfast hours. * 2000s The Starbucks phenomenon continues.As of this writing, Starbucks has more than 15,000 locations in over 40 countries. ANJA LAMBRECHTAssistant Professor of Marketing, LBS. By giving customers a platform to voice their ideas and views on the brand and by responding to it, it was able to reignite the brand trust. One of the accidental tweets from Starbucks was just a smiley face that received a lot of admiration from the community. [email protected] 804-506-0782 350 5th Ave, New York, NY 10118, USA. This situation was exacerbated by the economic downturn of the late 2000s. The new standardization techniques could also face resistance from Starbucks employees or “partners”. up of coffee, with unlimited refills that cost approximately 50 cents less than any other Starbucks products. In 2008, however, founder Howard Schultz launched the open innovation platform “My Starbucks Idea”. Case study on Starbucks Coffee. In a departure from conventional strategies like "a redo of the store layout", Starbucks soon embarked on a technology-oriented strategy. Example of conclusion of a research paper, essay on importance of water resources in nepal. Starbucks sells drip brewed coffee, espresso-based hot drinks, other hot and cold drinks, coffee beans, salads, hot and cold sandwiches and panini, pastries, snacks, and items such as mugs and tumblers. The large number of stores is a huge asset or a liability, depending on how one assesses the situation.If there is a strong economy and people have disposable income, then there is a benefit on having so many stores to generate revenues. Responsibly grown coffee means preserving energ… The focus should concentrate on fresh baked goods, sandwiches and pastries with natural ingredients such as blueberries and nuts. As a specialty product, Starbucks has a very limited product selection and this also limits business growth. It was carefully designed to appeal to the masses and specifically to the segment that made up its online community. Part I: Defining the Manager’s Terrain. It has a separate page for its employees, which is used to generate and debate ideas. “The brand strategy of Starbucks was best summarized by its” live coffee “slogan, a term that embodied the value the firm attached to keeping the national coffee culture alive” (Moon and Quelch 3). Starbucks Case Study Throughout the United States and Asia, Starbucks is renounced for their expertly crafted coffee, so much so that an immensely large portion of the nation at least recognizes the logo and the name. by admin April 26, 2016, 8:32 pm 1.8k Views. ” To accomplish its mission, Starbucks has principles that guide all of its employees as they go about their daily business: * Our Coffee – It has always been, and will always be, about quality. Understanding Starbucks’ development into an international giant and the strategic approach they took to get there begins with the origins of coffee itself. New markets for coffee such as India and the Pacific Rim nations are beginning to emerge. Starbucks' … Starbucks Case Study Business Policy. In 2008, Starbucks refocused to shift the coffee ritual beyond mornings. skip to content. Through the Starbucks Entertainment division and Hear Music brand, the company also markets books, music, and film. “That is my new battle cry. Even for Starbucks it may be difficult to judge the relative effectiveness of the individual marketing activities since many were implemented at a time when it was closing down a number of stores. Starbucks products are associated with quality, and the ompany has differentiated itself during the years as being committed to producing high quality products. Starbucks Sails Again The case chronicles the blizzard of decisions and initiatives that follow what could have been the company's death knell as the financial crisis hit home and consumers cinched their belts. The company must create value to its customers, or the customers will find another place to spend their money. Would you like to get a custom case study? Starbucks Case Study 1287 Words | 6 Pages. While Starbucks implemented a successful rebranding initiative, the market research and the change management expertise behind the rebranding was kept behind closed doors. As an analysis, this study is qualitative in society. Starbucks has created a perception that it is focused not just on profits, but also on societal agendas. However, Schultz took an entirely different view of the situation. Case Summary; Starbucks is North America’s largest coffee production company, which has 20 million customers worldwide, and it opens three new stores a day on average. With 17,000 outlets worldwide, Starbucks individualized each outlet based on the surrounding communities. The head start in technology adoption has helped the company come up with trend-setting ideas. July 2, 2008; In a harsher economic climate, Starbucks’s green-and-white mermaid logo is about to become a little less ubiquitous. The company has also been constantly introducing new products, such as “Instant via Ready” and “Full Leaf Tazo Tea Lattes” and “Tazo Tea Infusions”.The Instant via Ready is an instant coffee that the company claims is indistinguishable from its regular brewed coffee (Jargon). The chain's voice on Twitter is 28-year-old Brad Nelson, a former barista. The new strategy carries with it its own risks. In the 2000s, Starbucks was already a racehorse, with an increase in revenue from $4.1 billion in 2003 to $10.4 billion in 2008. Price: Starbucks products are priced higher due to perceived upscale image attached to its brand. Product Overview. Impressed with their popularity and culture, he sees their potential in Seattle. Their locations are extremely conducive for individuals that are on the go and for those who enjoy reading or listening to music. One of them was the move to help its customers personalise the company's offerings. o The organization has strong ethical values, commitment to the environment, and community activists. Starbucks announcement that it will close 600 stores in the US is a long-overdue admission that there are limits to growth. get custom paper. Through the "My Starbucks Idea" customers had a direct link with the headquarters and of course Starbucks was listening. The company closed down over 600 stores that fell short of its revenue requirements (“Fiscal 2008 Annual Report”). Starbucks-brand ice cream and coffee are also offered at grocery stores. As a result, a community involvement concept was developed. While on a business trip in Italy, he visits Milan’s famous espresso bars. Soon Starbucks's ubiquity became an asset as customers from around the world had an opportunity to connect with each other, spawning like-minded communities like the 'free Wi-Fi group', 'soy group', 'comfy chair group' or 'frappuccino lovers'. ————————————————- ————————————————- ————————————————- ————————————————- ————————————————- ————————————————- ————————————————- Starbucks COFFEE COMPANY Case Study History of Starbucks in the Philippines December 4, 1997, the Philippines had its first taste of the Starbucks Experience with its very first branch at the 6750 Ayala Building in Makati City. While many companies are struggling to get back to pre-2007 financial figures, Starbucks has shown that people are willing to spend $5 or 3 pound every day on their latte and tweet about it too. Not only does responsibly grown coffee help the environment, but it also benefits the farmers as well. Appealing to a diverse customer base by offering international teas and coffees to accommodate those customers that want a taste from home or for locals that enjoy tea. Starbucks SWOT Analysis * •Strengths * o It is a global coffee brand built upon a reputation for fine products and services o It has almost 17,000 stores in 55 countries. In 2008, when the company was looking for ideas to re-engage with its customers, Nelson suggested that he could begin a Twitter handle for the brand. Starbucks is a great example of a brand turning around its business by returning to its roots and reconnecting directly with its customers. 1980s Howard Schultz joins Starbucks in 1982. As in the case of appealing to mass market with bottomless coffee, Starbucks’s core customer might move to other stores where they perceive the “experience” is still being provided. If Starbucks cannot retain its differentiator strategy, it is doomed to fall out of popularity, as it would end up being a store that is selling nothing more than a cup of coffee.With majority of its stores concentrated in United States, Starbucks is also limiting its growth and exposing itself to risk. • Using philanthropy as a means for promotion – Starbucks contributes to several non-profit organizations as a way to improve brand image and awareness in local communities. Starbucks's use of social media points to the fine balance it maintained between spontaneous and well-planned posts. How to make case study research crisis 2008 case study Starbucks essay on a day without water supply research paper muscle memory. Starbucks is a company to watch out for as its continues to innovate; a story where every customer is a stakeholder and very vested in the company. What has made Starbucks’ culture what it is? It also had to give a leg up to the altruistic component of the brand such as community building and care for the environment. * Apart from the product and services that Starbucks offer they also give back to the community like if you purchase a bottle of ethos, you`re providing clean water for the developing countries. So Starbucks integrated 'customisation' into its existing processes. 95 “breakfast pairings,” including popular breakfast items paired with a coffee, and highlights $2 brewed coffees instead of the more expensive specialty drinks (Jennings). By March 30, 2008, its profit had fallen 28 per cent compared to the same period in 2007. Continuing to accomplish this will allow Starbucks to maintain its competitive advantage for years to come. 'It is important for firms to evaluate what types of social media activities increase revenues,' says Anja Lambrecht, Assistant Professor of Marketing, LBS. Everything else related to ingredients and distribution remains completely untouched. The company also offers Starbucks coffee and cappuccino makers for consumers who wish to replace their existing home coffee makers. Aggressive adoption of “no-frills” products to bring in new customers could also affect Starbucks’s profitability.Until now, any increase in commodity prices are more or less offset by company’s high prices, but a “no-frills” products would put downward pressure on company’s profitability, and possibly even damage Starbucks image as an upscale brand. New and different combinations should be introduced in limited markets and the products that deliver the best results should be retained and added to the permanent menu. o Co-branding with other manufacturers of food and drink, and brand franchising to manufacturers of other goods and services both have potential. The marketing principles of Starbucks, can be argued, are the basis of the company’s competitive advantage within the industry. Welcome to the world of case studies that can bring you high grades! This name and the mermaid logo were inspired by the love of the sea, from Starbucks original lo- cation in Seattle Washington in the heart of Pike Place Market. Essay type Case Study When the announcement was made in mid 2008 that Starbucks would be closing nearly three-quarters of its 84 Australian stores there was … So the company refrained from pushing too many products, causes or offers to its followers. Established in 1971, Starbuck’s overwhelming success has led it to operate more than 17,000 stores, recording 2011 revenues of $17 billion at approximately a 15% profit margin. * Our Partners – We always treat each other with respect and dignity. 'This strategy has led to a large online community that influences the company's product strategy'says Tripti Lochan, Chief Executive Officer, VML Qais. The biggest risk associated with this is customer boredom. Analysis Starbucks historically positioned itself as an upscale brand. Since Starbucks enjoyed such a rapid growth in its business, the company expanded anywhere it saw profitability for its stores.This has meant that Starbucks stores are as readily available as McDonald’s and as such the Starbucks “experience” the company asserts it provides, might be seen as no different than the experience of McDonald’s. In this way, Starbucks informs the consumer of the wide range of product offering they have at their stores across the world. william franklin; chris gipson; keith james; andy mcgee; editors. The Starbucks incident: a crisis management case study. * The company has managed to maintain the competitive advantage because it has offered conveniences and an atmosphere customers can enjoy.As long as Starbucks fulfills its customer’s wants and needs, Starbucks will continue to be a leading force in the market. We Will Write a Custom Case Study SpecificallyFor You For Only $13.90/page! The place or location of each outlet is also in line with the company’s differentiator strategy. If Starbucks can retain its strengths and build on opportunities, while suppressing weaknesses and extinguishing threats, it will be able to grow throughout the world market. * Strategy of acquisition – First, Starbucks can merge administrative costs of both organizations into one. 'My Starbucks Idea', set up for customers to exchange ideas, helped the company understand their needs and concerns. How is that culture maintained? Starbucks has about 182,000 employees across 19,767 company operated & licensed stores in 62 countries. Today, Starbucks has 775,000 followers. But Starbucks was responsive and showed that it cared about their customers. This was one of the reasons why the company took a hit during the economic slowdown of 2008 as customers opted for cheaper options for their everyday coffee. CASE STUDY: STARBUCKS KATHLEEN LEE 1 Brief History: The first Starbucks location opened in 1971. Our Customers – When we are fully engaged, we connect with, laugh with, and uplift the lives of our customers – even if just for a few moments. Case Study- Entry of Starbucks in Indian Market. Mission-Vision of Starbucks “Our mission: to inspire and nurture the human spirit – one person, one cup and one neighborhood at a time. (Photo: Rachit Goswami). Starbucks Case Study ... (“Fiscal 2008 Annual Report”). In 2009, when rumours of Starbucks's profits being spent on Israel army surfaced, the company used the social media outlets effectively to refute it and restore its image of a peace-loving organisation.MOBILE APPS. "The previous leadership had blamed the economy and the higher cost of dairy products for the slump in business. International Marketing Case Study Starbucks Going Fast just from $13,9 / page. * Starbucks offer good services like nice ambiance, hospitable crew and staff, cleanliness, and friendly services.They also provide Free Wi-Fi, Gift certificate, gift cads, Mobile Application, and you can also purchase their coffee bean and brewed it at your homes. The focus was more on building and engaging with the community. It needed an audience that cared about the issue, a new strategy and a new technology. He made his objective very clear: "Reigniting the emotional attachment with customers. The firm has closed over 800 company-operated stores in the United States and approximately 100 stores overseas (“Starbucks Posts Strong Fourth Quarter and Fiscal 2009 Results”). Tweets such as 'keep calm and make coffee' is in line with its idea of keeping a cool image and building a community. Starbucks was forced to shut 600 shops that were not making profits. In order to reduce business risk, expansion is needed. By continuing we’ll assume you board with our, Starbucks – Case analysis and problem solving, How to secure financing as a small business owner, How to Make a Business Plan for Any Business, 7 Crucial Macro Environment Factors to Include in Your Analysis, Macro Environment Examples in the Real World. Products and Services Starbucks is a customer oriented company that strives to offer Filipinos a combination of great tasting, quality coffee products with excellent services. If Starbucks continues its store closing measures and implementation of its various cost cutting initiatives, Starbucks is likely to see increased profitability. Thus, that company started to employ young people who have less or no experience. By consistently enforcing revenue requirements for each store, Starbucks will able to maintain or increase its same store sales, and while at the same reducing one of the weaknesses of being so large. Starbucks 2008 crisis case study rating. History of Starbucks in U. S. * 1970s The first Starbucks opens. * Starbucks, though its promotions was able to create a perception of a premium gourmet coffee. Place: As stated earlier, Starbucks can be found in any neighborhood where there is a perceived high traffic for its stores.Starbucks outlets can also be found in-store of various large chains including Barnes ; Noble and Target. Very early in the race, Starbucks had linked its social media strategy objectives with technology channels like mobile apps. It also shows the consumer how to order this cup and what it will look like. * Our Neighborhood – We can be a force for positive action – bringing together our partners, customers, and the community to contribute every day. Moreover, they offer a total assortment of food beginning from cheeseburgers, chicken burgers, fish burgers, wraps, chunks, sodas, smoothies, and premium cold/hot espresso. • Coffee services delivered to offices without coffee size restrictions. Many of the company’s products are seasonal or specific to the locality of the store. Check out this awesome Perfect Essays On Customer Relationship Management: Starbucks Case Study for writing techniques and actionable ideas. New flavors of energy drinks should be introduced and marketed towards teens. Starbucks also faces risks as it inters the global market. What this means is that Starbucks will aim to only buy 100 percent responsibly grown and traded coffee. The seafaring name seems appropriate for a store that imports the world’s finest coffees to the cold, thirsty people of Seattle. Every organization has a culture, a way that those in the organization interact with each other and with their clients or customers. Starbucks also prides itself on innovation of new products, which further differentiates it from other competitors. Starbucks also have foundation that will help young people to contribute to their communities and giving them opportunities to make a difference by supporting their efforts to make the world a better place. – Second, since there is low R ; D in the beverage industry, Starbucks can merge that operation in addition to their distribution system. Minimal revenue requirements have been placed on each store, and those that fall short are closed. The initiative, 'MyStarbucksSignature' allowed consumers to develop their own signature drinks (hot or cold coffee), name the drink and share the new flavour with the community. Amity University; Download full-text PDF Read full-text. Starbucks Card is an initiative that offers customers the opportunity to promote company’s products through a referral system. Originally, this was what gave Starbucks a huge advantage over any potential competitors. The line of personal equipment products by Starbucks can be extended and offered at the retail level or on the company’s web site. In this case, many Australians who sampled Starbucks coffee could not understand the reasons of Starbucks charging heavily for their coffee. In January 2008, Schultz returned as Starbucks CEO, replacing Jim Donald, the man he and other senior colleagues had chosen to lead the company. The first way Starbucks has shown corporate social responsibility is through its commitment to the environment. The most obvious risk is its limitation of products. More than 93,000 ideas were shared by about 1.3 million users on social media, and page views per month rose to 5.5 million. They also support farmers of cocoa and tea from different countries by giving them education and agricultural training. The company should focused on its increasing profitability and return of investments. The company’s stores have become a medium for people and communities to come together and promote a better place to live in an environmentally conscious society. When Starbucks needed to tackle a specific complex problem - reducing waste generated by its disposable cups - it recognised that the same community that it was engaging with in its ideation site, My Starbucks Idea, was not helpful. * Starbucks is a large company with a competitive advantage that is shrinking because of its huge success. The company is also implementing “value strategies” that would emphasize more on inexpensive coffee products rather being perceived as unaffordable to price-skittish consumers. o Starbucks has a reputation for new product development and creativity.However, they remain vulnerable to the possibility that their innovation may falter over time, and product acceptance will come to a halt eventually slowing growth. EXECUTIVE SUMMARY:The world's largest coffee retailer, Starbucks, pulled itself out of the financial meltdown of 2008 by aligning its operations with customer demands through social media. 1. As part of this, customers were able to give opinions on everything such as products, services, layout, advertising, corporate social responsibility, in-store music and so on. By Rick Kelly. Going forward, it becomes important for firms to evaluate what types of social media activities actually increase revenues. Starbucks ensures high standard in all aspects of operations, promising their customers only the best brewed coffee in every restaurants at any time. In 2008,the company did not have enough current assets to pay its liabilities, but in 2009 the company generated enough current assets. Employees and baristas too were always an integral part of Starbucks online and social media community. TRIPTI LOCHANChief Executive Officer, VML Qais. And we hold each other to that standard. The only modification a consumer can do in his or her signature drink is in the ingredient mix and quantity. In March 2008, "My Starbucks Idea" was rolled out for customers to exchange ideas with each other and directly with the company. The company introduced new products that would appeal to price-skittish customers and implemented techniques that would standardize its stores and reduce costs. When a customer purchases a gift card, it not only shows brand loyalty, but it also provides the company with free advertising, and brings in new customers. * The SWOT analysis also gives a starting point for a discussion on what Starbucks can do to reduce its weaknesses. The company wanted the broader portfolio to boost lunch and dinner … Through this initiative, the coffee retailer built a robust fan base. Through its iPhone app features like store locator, nutrition-based information and rewards programme, it integrated and enhanced its social media community fabric. Always full of humanity. 4-5 stars based on 103 reviews stars based on 103 reviews Branding unlimited: Starbucks cups on sale at a store. The awareness and response was also more than that from promotions through traditional channels like television advertisements. But just having a phenomenal community of product co-creators does not mean that all problems can be presented to, and solved by, the same community. The name comes from Herman Melville’s Moby Dick, a classic American novel about the 19th century whaling industry. The company is also introducing 100 new stores in US, and 200 new stores in International markets, which might positively affect the company provided they are successful. * o Starbucks is exposed to rises in the cost of coffee and dairy products. He told the employees, "The company shouldn't just blame the economy; Starbucks's heavy spending to accommodate its expansion has created a bureaucracy that masked its problems.". Schultz had nurtured the company since 1982 when it had only four outlets. Given the heightened sensitivity to racial bias issues these days, is it possible for even a socially responsible organization to manage its way through a racially charged crisis with its reputation intact? Its product offerings have also expanded beyond pastries and coffee to oatmeal, smoothies, and wraps to keep up with the competition and satisfy more customer needs. 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