Case Study: Starbucks

Relevant key issues/concepts:

• Need for global expansion to offset poor growth in the US.

• Employee dissatisfaction with the company’s sub-standard wages and odd hours. Considering the tasks they undertake, they should be compensated accordingly.

• Competitors in foreign markets can be debilitating to the brand while it is being introduced; copycats crop up serve the same customer base.

• Niche drink markets are worth pursuing if Starbucks has the right product strategy. Each market requires something different, so Starbucks needs to appeal to customers’ palates along with their pocketbooks.

Existing/potential problems:

• Stagnating growth in domestic markets due to self-cannibalization; opened too many stores and saturated the market.

• Markets maturing too quickly; cannot sustain new growth.

• Starbucks’ image in the US is stuffy and corporate; appeals to baby boomers instead of their children.

• Some markets are not open to Starbucks due to preexisting cultural/legal circumstances (eg. Italian coffee supporters, French employee benefits, etc.)

Alternative strategies/solutions:

• Do test markets for implementing new strategies; the Denver Internet order idea may not have worked in the past, but with mobile technology effectively at any customer’s fingertips, it may be an option worth re-exploring.

• Conducting consumer research groups is effective if the data is converted into an action plan. Starbucks needs to use the data collected to create region-specific or even store-specific action plans to appeal to those who frequent the stores.

Recommendation:

• Possible rebranding and marketing to younger coffee drinkers.

• Play to the company’s strengths and focus on coffee. To appeal to anti-corporate types, offer a local variety of food options (eg. food from local bakeries and restaurants)

• Starbucks needs to outthink its competitors in the coffee-saturated markets. They need to differentiate their product offerings, whether it is more...