Starbucks Case

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Category: Business and Industry

Date Submitted: 11/16/2012 08:26 AM

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1. There are several factors that lead Starbucks to the extraordinary success in the early 1990s. First was the idea to make Starbucks as a “third place.” This idea was from Milan’s coffee culture where espresso bars were important social places for people. Schultz, the Starbucks founder and chairman, were so inspired by this culture that he tried to create similar place in America. This ‘third place’ became the place where people go to relax and enjoy others, or just be by themselves after the first and second place, home and work. Another factor was the public offering. By taking the company public, it was able to raise $25 million and open more stores across the nation. With these factors Starbucks has many stores around the globe and its sales have increased.

To make sure that Starbucks become ‘third place,’ it tried to set right value proposition. Starbucks value proposition can be shorted one word “live coffee.” This includes coffee itself, customer intimacy and atmosphere. Starbucks control the whole process of making coffee-from growing to roasting and making it- to make sure its coffee is the highest-quality. Starbucks also make sure that customers are satisfied by starting from the inside and making sure their employees called partners are satisfied. They create a good place to work by giving health insurance and stock options, controlling manager stability and encouraging promotion. Starbucks intimate with customers by training partners to have both hard skills and soft skills. Hard skill is about how to work and soft skill is about how to connect with customers. Partners are encouraged to remember customers and talk with them. The last is to offer experiences that customers and enjoy. They made Starbucks a comfortable, upscale and inviting place for customer.

With these value propositions, Starbucks globe became a dominant specialty-coffee brand in North America in 2002. They become a high-quality brand that customer trusts and is known for specialty...