Starbucks Case Study
1. Starbucks serves what many would consider a basic commodity-- coffee. As a commodity, traditional management wisdom would dictate that vendor selection would be based upon price; the vendor with the lowest price typically earns the business. How did Howard Schwartz transform Starbucks from a shop that "specialized in selling whole arabica beans to a niche market of coffee purists" into an "upscale cultural phenomenon" (p. 2)? Be certain to identify Starbucks ' 'service vision or concept ' and 'service strategy ' under Schwartz ' leadership.
The concept of Starbucks goes far beyond being a coffeehouse or coffee brand. Howard Schwartz, who wanted to take the experience of an Italian—specifically,
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Starbucks control the supply chain so that they can make sure the coffee is the highest quality. And the starbucks locations are always in downtown area or high-population area which brings customers more convenience. The decoration style is trying to make customers feel as comfortable as they can. Although starbucks is not unique enough as other private coffee shop, starbucks is the highest coverage coffee shop with high quality coffee and comfortable areas. It is a coffee shop brand that people can easily find and walk in.
- intangible difference: The waiting time is limited in three minutes at any time period. Staffs are trained well with hard and soft skills which ensure the coffee taste and services. Also, the upgraded coffee machine keeps the accuracy of each coffee and reduces the waste.
4. What management challenges does the heterogeneity of the Starbucks service product present? What benefits does heterogeneity potentially present?
Starbucks provide hundreds of products and also with their customized drink; however, it is also a challenge for them. For customers who do not want to choose from bunch of choices, starbucks heterogeneity coffee choices just confuse them. Another problem is the different starbucks location or different baristas make different taste of coffee. If a customer always goes to one specific starbucks location, he/she may not satisfy with the coffee in
There are 15,756 Starbucks stores in 44 countries. To have that many stores, serve that many people, and ensure they still maintain the best and highest quality of beans, really sets some doubts. Starbucks has truly become the McDonald’s of the coffee industry because of the supply and demand. In the Starbucks business, quantity is greater than quality because quantity equals to money, where as quality costs more money. There is no win/win situation with this equation when your business is serving practically the world.
(3a): What trade-offs has Starbucks made? What different activity choices has it made from its rivals?
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
3. How does the Starbucks of 2002 differ from the Starbucks of 1992 and how do these changes influence service and customer needs?
Starbucks has developed a brand image that has revolutionized coffee drinking experience. It has created an ambiance that is designed to attract customers and keep them coming back to Starbucks stores. It offers wide varieties of services such as comfortable seating areas with unique music and free wireless Internet for their customers while sipping their favorite coffee. This distinctiveness sets Starbucks apart from most of its competitors and has allowed the company to successfully grow and profit while charging premium prices for their products.
Starbucks’ lead in the specialty coffee industry exemplifies the result of deftly executing a well-planned business strategy. Moreover, Starbucks is well positioned for what is expected to be a continuing rise in the popularity of specialty coffee products. The question before Starbucks’ leadership, however, is what avenues will lead to Starbucks’ goal of remaining true to its core, the highest quality coffee products while providing a “total coffee experience” for its customers?
The décor of the stores included earth tones and overstuffed chairs, wood floors and cozy fireplaces that created a home-like feel so that its patrons could linger and relax. La Marzocco machines were put up which added to the distinct taste of the coffee and the Barista that operated the machines stood as a unique attraction. The quasi-Italian lingo included in menu (drinks names and sizes) were very catchy. Starbucks positioned itself as a brand/company offering a “lifestyle product”. The locations were carefully selected where areas with large numbers of wealthy and highly professional workers (“Bobos”) were targeted.
This assignment is based on the Starbucks case study; Trouble Brews at Starbucks written by Lauranne Buchanan and Carolyn Simmons (2009). The aim of this paper will be to discuss the the changing consumer experience, competitive landscape and external circumstances affecting marketing opportunities for Starbucks, while determining how Howard Schultz can provide Starbuck’s customers a greater long-term value.
Starbucks customers are diverse, well educated, young business people looking for a quick and easy way to grab coffee on their way to work. Starbucks values a strong relationship with their customers so they are
Starbucks is acclaimed for its superior value proposition in the early 1990’s by creating an experience around the consumption of coffee, a ‘third place’. The brand is positioned to offer the highest quality coffee, close customer intimacy, and warm atmosphere or ambience.
This case assignment discusses the history of Starbuck’s accomplishments as they entered the American coffee culture heritage. In 1983, The chairman and CEO Howard Schultz traveled to Italy and had a dream to carry the Italy coffeehouse ritual back to the United States. Schultz was focused on creating an environment meeting company that makes good coffee but also be a social experiment. Starbucks today opened more than 19,000 stores functioning in 62 countries. Starbucks has numerous rewards that globalization has offered and they have significantly benefited from it, while in the coffee industry. Starbucks has a wide-range in marketing strategies to benefit the customers. During the different obstacles that Starbucks has encountered, they must stay reliable in quality and uphold to adjust to different customer values.
Starbucks first opened its doors in Seattle’s Pike Place Market with the name being coined from that of Moby Dick’s first mate (Schultz & Yang 1999). It has spread its shops across North America, all over Europe, the Middle East, Latin America as well as the Pacific Rim with an estimated 35 million customer weekly (Michelli, 2008). With tremendous growth from a small time coffee shop, the company has matured to an international icon that today it is one of the world’s leading retailer, roaster and brand specialty coffee (Story, 1971). The company offers whole bean coffees, espresso beverages, and confectionery and bakery items.
The CEO (Chief Executive Officer), Howard Schultz pointed that the main reason from the decline of “Starbucks Experience” was that the number of Starbucks shops increased sharply from only 1,000 to 13,000 within ten years. Other people considered their brand has been commercialized, and the customers hadn’t had enough enthusiasms to appreciate every moment of their coffee any longer. He suggested that Starbucks should re-find its origin. Nevertheless, his advice apparently was opposite to the
In addition to their coffees Starbucks also provides coffee makers, grinders and various logoed merchandise. They have worked hard to establish a network ensuring the merchandise is the same throughout North America in every store. Though their merchandise is the same across the board in all their stores they do not have “cookie cutter” stores. Starbucks has designers on staff that can fit a store into any prime real-estate no matter the size; they are more concerned with projected coffee drinker traffic than with all the stores looking the same.
The original idea for the Starbucks format came from the 1980´s when the company´s director if marketing, Howard Schultz, came back from a trip to Italy enchanted with the Italian coffeehouse experience, the idea was to sell the company´s own premium roasted coffee and freshly brewed espresso-style coffee beverages, along with a variety of pastries, coffee accessories, teas, and other products in a tastefully designed coffeehouse setting. The focus was to sell a “third place experience”.