Starbucks Hbr Case Study

Also there were large restaurants trying to find ways to capitalize on the specialty coffee industry i.e.: Macdonalds, Krisspy, Dunkin, Donuts …..

When Starbucks first became a Public Traded Company in 1992, there were only 165 stores open at that time. The company set a goal for growing 125 stores per year and rapidly expanded until reaching 11,000 U.S. stores in 2008 (Starbucks website). When Starbucks first opened, it focused on the experiential. At its best, the coffee giant truly represented the ‘”third place” between home and work where a customer can chat with the barista, order a drink to his specification, then settle in for conversation, socializing, and relaxation (Wikipedia). People were not paying $3 per latte because it tasted that much better than Starbucks’ competitors. They were paying it because they could go into a Starbucks and get that European café feeling and then take the

Starbucks operates in 65 countries offering specialty coffee, tea, and food items to patrons through company-operated stores (Starbucks Corporation, 2014). Moreover, Starbucks sells trademarked items such as coffee grounds and pre-packaged drinks through grocery stores and similar channels (2014). In 2014, there were 21,366 stores globally (14,191 in America) (2014).

* Starbucks expanded to pursue sales of products in a variety of distribution channels and market segments. Products were marketed to restaurants, airlines, hotels, universities, hospitals, business offices, country clubs, and select retailers. In the airline industry, Starbucks coffee was served in flights United Airlines and United Airlines. Packets of Starbucks coffee along with coffee making equipment were made available in each room in Hyatt, Hilton, Sheraton, Radisson and Westin Hotels. Coffee service was also provided in several Wells Fargo banks in California. Foodservice distributors such as Sysco

Starbucks made operational changes to facilitate its rapid expansion. First, it changed La Marzocco machines for Verismo models, which were automatic and produced espresso quicker. This reduced the costs of training baristas and reduced the time of the process, so customers were served more quickly. However, some customers argued that the new machines produced lower quality coffee and the customer-barista relationship was lost. Other operational change was coffee grinding. At the beginning, coffee was grounded throughout the day for best tasting. In order to reduce time, Starbucks started shipping pre-ground coffee to its stores. However coffee quality could

Today, Starbucks coffee an American global coffee company has 21,160 stores in 63 countries. Coffee shop that scored top rating for customer satisfaction in 2008 American customer satisfaction index. With its practices, Starbucks take advantage in the five stages in consumer purchase decision making process. Next, Starbucks’ marketing strategy

When Howard Schultz launched Starbucks, its main targets were the competitors and the customers. Schultz’s brand aimed at gaining dominance in the coffee industry in addition creating a Italian coffee shop feel in the United States (Buchanan & Simmons, 2009). The strategy of Starbucks was based on new products, listening to customers wants and ensure future expansion (Buchanan & Simmons, 2009). In creating convenience for customers, Starbucks created stores almost on top of eachother. They hinged on the idea that, they did not want to lose out on a sale if a line was too long. This action, of placing stores in heavy populated areas, basing need on projected growth of an area caused some decline in sales during economic trouble with the economy. The 2007 recession, failure of subprime mortgages, increased competition from McDonald 's McCafe brand, and Dunkin Doughnuts all led to a decline in sales for Starbucks in the fourth quarter of 2007 (Buchanan & Simmons, 2009). To attempt to regain market share and recover after the

According to Exhibit 8, the profile of the customers retained had changed. The brand image was not as strong for the newer customers (first visited in the year prior to date of exhibit) as it was for established customers

In their annual report, the company states that their objective is to “maintain Starbucks standing as one of the most recognized and respected brands in the world.” To achieve this objective, the company has strategically expanded by adding stores domestically and in developing markets. Through their experience, the company aims to be stay respected by offering a diverse range of products and following Starbucks Global Responsibility Strategy, which involves choosing suppliers that source coffee beans ethically and contributing positively to the communities that the company operates in.

Cognition gives the companies information on how consumers respond to different marketing stimuli they face for the products used. It has to do with customer’s thinking and how do they behave toward a particular product. To be more specific and also reading the book “cognition refers to the mental structures and processes involved in thinking, understanding, and interpreting stimuli and events.” (Peter & Olson, pg. 21)

The larger known coffee businesses were beginning to show signs of stagnation in the 1970’s and 1980’s. Unlike Proctor & Gamble other large manufacturers, specialty coffee producers were small independent distributors. According to the Harvard Business School report on Howard Schultz; During the early 1980’s the average American consumed less than two cups of coffee per day, with almost one of every two men , women and children over the age of 10 does not drink coffee at all. The large coffee business started to compete for market share in a shrinking market. The smaller independent specialty coffee producers were selling only high quality Arabica beans. Arabica beans have less caffeine, less

In general the coffeehouse industry in the United States was experiencing an increase in coffee consumption per capita due to the “Starbucks effect”. At this time Starbucks was operating approximately 20,000 stores in the United States and was living a fast expansion strategy worldwide.

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

* Starbucks expanded to pursue sales of products in a variety of distribution channels and market segments. Products were marketed to restaurants, airlines, hotels, universities, hospitals, business offices, country clubs, and select retailers. In the airline industry, Starbucks coffee was served in flights United Airlines and United Airlines. Packets of Starbucks coffee along with coffee making equipment were made available in each room in Hyatt, Hilton, Sheraton, Radisson and Westin Hotels. Coffee service was also provided in several Wells Fargo banks in California. Foodservice distributors such as Sysco Corporation

These days Starbucks owns more than 18,000 stores in 62 countries and is the premier roaster and retailer of exclusive coffee in the world. Back in 1971, when the first Starbucks opened, the company already had two intentions to give to people every single day till now: share specialty coffee with friends and help to make the world a little better.