STARBUCKS CASE ANALYSIS
To: Prof. Hurley
From: Saboor Ahmad (MIB Student)
Date: October, 15th 2017.
Subjet: Starbucks case analysis assignment.
Table of Contents
Summary ---------------------------------------------------------------------------------------------------1
Core Issues-------------------------------------------------------------------------------------------------2
Background------------------------------------------------------------------------------------------------2
Implication/Analysis-------------------------------------------------------------------------------------3
Recommendation-----------------------------------------------------------------------------------------5
Appendix--------------------------------------------------------------------------------------------------5
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Hurley
From: Saboor Ahmad (MIB Student)
Date: October, 15th 2017.
Subjet: Starbucks case analysis assignment.
Starbucks Case
Summary:
Starbucks was founded in 1971. Gerald Baldwin, Gordon Bowker and Ziev siegl start star bucks journey with a small coffee shop in Seattle. Starbucks has become a cultural phenomenon through expand thousands of coffee houses across the North America and around the world. According to the market research Star Bucks start losing grip on customer satisfaction. Also speed of service is specific problem. For this reason, Starbucks management is planning to invest 40 million companywide it will help to increase the number of employees in each store. But, Starbucks management is unclear about impact on revenues.
Core Issues:
How Starbucks sucks change from early 1992-2002?
What are the reasons Start Bucks customer service satisfaction decline? How measuring satisfaction can be a major fact?
Delivering on customer service.
Market research gap between decision making and customer satisfaction.
Should Start Bucks spend 40 million to increase labour in each store to maximise customer satisfaction?
Analysis
How start bucks change from early 1992 to
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How measuring satisfaction can be a major fact?
Howard believed that employees satisfaction leads to customer satisfaction.
Store Growth: Since 1998 to 2002 start bucks more focus on store growth expansion. That directly effect on delivery and service.
Delivery on Service:
Star Buck provide two types of training to their employees.
Hard Skill: How to use the cash register and Soft Skill: Conversation. Due to large number of customer and handmade beverages put more pressure on employees to have conversation with customers to say more than yes. One store has literally hundreds of combinations of drinks. It creates a tension between product quality and customer satisfaction. Day said. Start bucks focus on 3 mints service. But handmade beverages demand slows down service. That one of the reason hard skills and soft skill to do help employees to satisfy customer.
Strategic Marketing:
Star bucks has a lack in strategic marketing. Company do not have chief marketing officer (CMO), all marketing groups has been separated in three group. The problem is after gather the information have lack of decision power. That’s why no one is focus on big picture of consumer behaviour change. Buying power of customer is convert to low income, younger and less educated and less visit. Typically visit 5 times in a month. People are not willing to pay high price. Exhibit 1 Whole sale bean is seen 6 % sale due to high
Improving the store internally with more resourceful employees, better lighting and displays, and more organized floor plans will start to change the image of Dollar General that the average public holds. A more respectable store will lead to an increase in customers. Dollar General will then begin developing a system of a more sustainable competitive advantage among the small and large firms of the similar industry.
In the past, JCP had, on average, one price campaign every day. The stores were full of sale signs and retail rise was getting out of control. JCP partnered with numerous exclusive collaborations which was hoped to bring about an expansion for the firm. However, due to the economic slump, the oversaturation of the market, and an expected lack of quality in the goods from the consumer perspective, JCPenney’s success was degrading in contrast to its competitors. (Sloan, 2010).
Family Dollar’s retail strategy will work in both good and bad economic times. The company’s mission: is to provide our customers with a compelling place to shop, our team members with a compelling place to work, and our investors with a compelling place to invest. Our vision is to be the best, small format convenience and value retailer serving the needs of families in our neighborhoods. (Family Dollar 2012 Annual Report) During the economic downturn, Family Dollar reevaluated the company’s goals. One of the goals the company will be refocusing on will be to build customer
Starbucks Corporation, generally known, as Starbucks Coffee is the leading retailer and a brand of world’s forte coffee in the world, with more than 15,000 retail locations in North America, Latin America, Europe, the Middle East and the Pacific Rim, wherever in this world where premium quality coffee is in demand. Starbucks is the largest coffeehouse company in the world ahead of UK rival Costa Coffee, with 20737 stores in 63 countries and territories, including 11910 in the United States, 1496 in China, 1442 in Canada, 1052 in Japan and 772 in the United Kingdom. The first Starbucks was open in 1970. The name was inspired from Herman Melville’s Moby Dick, a definitive American novel regarding the 19th century whaling industry. The nautical name matches seamlessly for a store that imports the world’s finest coffees to the cold thirsty people of Seattle. In May 1998, Starbucks have finally successfully entered the European market through its acquirement of 65 Coffee Company stores initially originated from Seattle in the UK. Both companies shared a common culture, focusing on a great commitment to customized coffee, similar company values and a mutual respect.
J.C. Penney has been challenged with the task of changing its strategy to once again be competitive. New chief executive officer, Ron Johnson, noticed shortly after taking his new position with J.C. Penney that the way the company was conducting business was not profitable. Even though the company advertised several sales and promotions, the amount of customer participation was still low (Mattioli, 2012). Of the customers that were actually shopping, only did so when prices had been cut drastically (Mattioli, 2012).
starbucks Corp., an international coffee and coffeehouse chain based in Seattle, Washington, has expanded rapidly since its opening in 1971. These outrageous success was due to its well-developed strategy vision which lay out the company's strategic course in developing and strengthening its business. Starbucks is a global corporation that sells authentic coffee in 30 countries, reporting revenues of nearly $5.1 billion in 2006. The main goal of Starbucks is to embrace diversity by applying the highest standards of excellence. Starbucks strives to perfect the relationship with the working class by making the service as fast as possible because they believe that every customer has their own personal rate. One
In the world of commerce and retail today, there are a variety of retail stores that are all geared toward the customers who are interested in saving money and finding bargains on their daily purchases, as well as on some of their major purchases. Some of the retail stores that are in this category of low prices and discount prices are Big K-Mart, Wal-Mart, Inc., Fred’s Dollar Store, Family Dollar Store, and Ollie’s Bargain. Due to the increase in e-commerce and online purchases, several of these retail stores, such as Big K-Mart and Fred’s Dollar stores are closing in many areas of the country. Since there has been an increase in the demand for more sales and discounts by customers and there are less discounts stores available, retail stores
1. In the beginning, how was Starbucks different from other coffee options for coffee drinkers in the United States? What activities and assets did Starbucks leverage to differentiate itself from competitors?
With the exception of supercenters such as Costco and BJ’s, the fastest-growing portion of the overall retail industry in the United States during the past decade has been in the dollar store segment. From 2000-2005 dollar stores had a compound annual growth rate (CAGR) of 10.2% which was nearly double the 5.6% CAGR in the retail industry as a whole. Sales from these discount stores were $24.7 billion in 2000 and were expected to more than double to $51.1 billion in 2009 (Exhibit 8). Two main drivers fueled this growth trend. The first was a cultural shift in consumers towards a bargain-based mentality. This was spurred by an increased presence of retailers with a low cost strategy including Wal-Mart,
Penney Company, Inc. faces stiff competition from other brick and mortar stores and internet retailers; however, this type of business is highly capital-intensive so barriers to entry do exist. The company’s prime competitors are Kohl’s, TJ Maxx, Macy’s, Target and Wal-Mart, as well as a growing pool of online retailers. While they have closed a number of underperforming stores, some may argue that the company has too many stores to support its current sales levels. J.C. Penney management feels that many stores allow them to serve customers in locations where it’s the only game in town. In addition, stores are a crucial component to building up its e-commerce business, given how much retailers are integrating physical stores into their digital operations to keep pace with how consumers shop today.
The elusive goal of customer satisfaction has long provided companies with endless headaches and difficult decisions. In the end, associating specific customer satisfaction metrics to company profit and loss would provide the undeniable proof needed to make changes, and then invest the required capital to address any concerns. Starbucks, not unlike the rest of the business world, has found itself in the same situation. At a basic level, the argument that more investment in customer service creates higher customer satisfaction has already been fundamentally agreed upon. However, more specifically, Starbucks must decide if a reinvestment of $40M annually in
I've chosen the Starbucks Corporation on which to do my case assignment for the session. I first became interested in Starbucks while working on a paper for a previous marketing class. I became intrigued at the entrepreneurial spirit that such a large corporation had managed to maintain throughout its massive expansion. Starbucks corporation, unlike many of its now-defunct rivals, has done an outstanding job since its meager beginnings in 1970 with the execution of its strategic process; resulting in it currently owning 40% of the specialty coffee market and boosting annual sales exceeding $7 billion according to Burt Helm. Historic successes and recent turmoil within the company, including a near 40% decline in 2007 in profits (Sullivan
Starbucks has always taken exceptional care in keeping its brand value. In fact, Starbucks prides itself in its brand, particularly the power it has to keep its customer base strong. Before analyzing this loyal customer base it is best to consider the particular characteristics of the brand that has led to Starbucks having such devoted patrons.
The context change in form that Starbucks found itself competing with smaller chains that resembled its former pre-expansion model with competitors focusing in creating symbolic-expressive value and fast food restaurants that had started to offer specialty coffee with more aggressive advertisement at a lower cost. The competitive context changed for Starbucks because it’s focus in mass distribution channels and its retail footprint strategy stated its product within a standard performance product value; this affected the value perception of the product.
Starbucks dates back from 1971 and is based in Seattle, Washington. The company was founded by Gordon Bowker, Jerry Baldwin and Zev Siegl and it