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- 1. CASE STUDY ON STARBUCKS
- 2. CASE STUDY CONTENTS 1- INTRODUCTION 2- STARBUCKS STORY 3- CLOSING OF STORES AND JOB CUTS 4- REASON BEHIND STARBUCK DOWNFALL 5- RETURN OF HOWARD.D.SCHULTZ 6- MEASURS TAKEN TO GAIN INVESTORS CONFIDENCE 7- EFFECTS OF EXPANDING STORES 8- REBIRTH OF STARBUCK 9- SOCIAL MEDIA CAMPAIGNS 10-TRANSFORMING THE INSTORE EXPERIENCE 11-EMPLOYEES AND BARISTAS 12-ROLES OF DIFFERENT MANAGEMENT FUNCTIONS IN A CASE 13-CONCLUSION 14-QUESTIONS TO DEBATE
- 3. THE WORLDS LARGEST COFFEE RETAILER STARBUKS PULLED ITSELF OUT OF THE FINANCIAL MELTDOWN OF 2008 BY ALIGINING ITS OPERATIONS WITH CUSTOMER DEMAND THROUGH SOCIAL MEDIA.
- 4. INTRODUCTION STARBUKS founded in 1971 in SEATTLE, It has there outlet in 43 countries around the world. It is one of the most respected brand, winning award such as- BEST BUSINESS MOST ADMIRED COMPANY 100 BEST CORPORATE CITIZENS There was a time when WALL STREET portrayed STARBUKS as the “THIRD PLACE” after HOME and WORK.
- 5. JOB CUTS While its quality is unquestionable, its price has always been higher than those offered by the domestic coffee houses in various countries. This was one of the reasons why the company took a hit during the economic slowdown of 2008 as customers opted for cheaper options for their everyday coffee. STARBUKS forced to shut 600 shops that were not making profit. By MARCH 30, 2008 its profit had fallen 28%compared to the same period in 2007. In 2009, it closed another 300 stores and laid of 6700 employees. The closer will account for 8% of all company operated US stores and will leave the company with 6600 US outlets. They have to eliminate as many as 12000 full and part time positions as a result.
- 6. RETURN OF HOWARD.D.SCHULTZ On January 8, 2008 HOWARD.D.SCHULTZ returned as a CEO of STARBUKS after a gap of 8 years replacing JIM DONALD. Experience of SCHULTZ- He nurtured the company since 1982, when it had only 4 outlets. He had served as a CEO from 1987 to 2000.
- 7. TWO MAJOR REASONS BEHIND COMPANY’S DOWN FALL AND CLOSING ITS STORES 1-Economic crises in US and world economy. 2-STARBUCKS rapid expansion strategy. These two factors distracted it from making its cafes an inviting place with new products. It also faced competition from Mc Donald’s which had in 2008, started setting up coffee bars that sold espresso.
- 8. WHAT ARE THE EFFECTS AFTER EXPANDING ITS STORES AND CHASING GROWTH TARGETS- 1-The regular customers who valued the club like atmosphere of relaxing over quality cup of coffee found themselves in minority. They didn’t believe in the speed of order rather than prefer recognition by and conversation with baristas. As a result many STARBUCKS veterans have now switched to PEETS, CARIBU and other more exclusive brand. 2-STARBUCKS introduced many new products to broaden its appeal for EX- sandwiches. 3-Opening of new stores and launching a blizzard of new products create only superficial growth.
- 9. WHAT DIFFERENT STARBUCKS DID TO REGAIN THE CONFIDENCE OF INVESTORS AND STAKEHOLDERS Every time when this kind of situation arises top leadership blamed the economy and the higher cost of products. However SCHULTZ adopted a entirely different kind of approach. He told his employees- “The company shouldn’t just blame the economy; STARBUCKS heavy spending to accommodate its expansion has created a bureaucracy that masked it problems.” SCHULTZ recognised the problem that STARBUKS growth strategy is root cause behind its downfall. “Stores no longer have the soul of the past and reflect a chain of stores Vs the warm feeling of neighbourhood store.” They tried to add value through innovation, offering, Wi Fi services, creating and selling its own music and in the end they put their focus back on the COFFEE, revitalizing the quality of its STANDARD.
- 10. REBIRTH OF STARBUCKS In a departure from conventional strategies STARBUKS soon embraced on a technology oriented strategy. Where employees could think freely about the organisation and contribute in term of strategies and ideas was forecasted. As a result a community involvement concept was developed.
- 11. MY STARBUKS IDEA In March 2008 “MY STARBUCK IDEA” was rolled out for customers to exchange ideas with each other and directly with the company. As a part of it customers were able to give opinions on everything such as products, services, layouts, advertising corporate social responsibility, instore music and so on. More than 93000, ideas were shared by about 1.3 million users on social media and page view per month rose to 5.5 million. STARBUKS implemented over 100 ideas. Through this initiative, the coffee retailer builds a robust fan base. By giving customers a platform to voice their ideas and views on the brand by responding to it, It was able to reignite the brand trust.
- 12. MY STARBUCKS SIGNATURE The company embraced mobile apps much before its competitors they uses it to reach to their customers and helped their costumers to personalize their companies offering to customize the company’s offerings. The initiative “MY STARBUCKD SIGNATURE” helps consumers to develop their own signature drinks (hot or cold coffee) name the drink and share the new flavor with community.
- 13. EMPLOYEES AND BARISTAS They are awakes an integral part of STARBUCK ONLINE and SOCIAL MEDIA COMMUNITY. It has a separate page for its employees who used to generate and debate ideas. “THE CRISIS AT STARBUCKS WAS AS MUCH AS THE RESULT OF THE ECONOMIC RECESSION AS DUE TO EXPANSION OF THE STORE NETWORK IN THE PREVIOUS YEARS. SO TO RECONNECT WITH ITS COSTUMERS STARBUCKS USED SOCIAL MEDIA TOENGAGE INDIVIDUAL COSTUMERS WITH ITS PRODUCT AND BRANDS”
- 14. Roles of different management function We can observe that how much important role these management functions play in the case study. Planning As we all know planning is the conscious determination of future course of action.in this case we can see that in the lack of proper planning improper situation analysis and inappropriate decision making is the biggest reason for the downfall of the STARBUCKS. Initially they failed on the forecasting part and did not consider the economic condition which resulted in decline of revenue and their brand value. After a considerable planning effort by a reappointed CEO Mr. Howard Schultz STARBUCKS regained the market share and the brand value. .
- 15. Organizing Organizing functions can be viewed as a bridge connecting the conceptual ideas developed in planning two specific means for accomplishing these ideas. STARBUCKS has always followed a strategy to blanket a region with its new stores. This means that by opening multiple stores in the same street or close by location it could, reduce the customers rush in one store, and also increase it revenue through new stores, but this strategy seriously backfired because of lack in implementation on the ground level and they failed in the organizing efforts which affected its brand image. When Schultz returned as a CEO he brings back the old charm of the STARBUCKS with the proper organizing efforts and team work.
- 16. STAFFING Staffing involves manning the organization structure through proper and effective selection, appraisal and development of the personals to fill the roles assigned to the employers/workforce. STARBUCKS wants to make every employee a part of a worldwide family and in order to do so to make them aware of challenges of the company. Every partner/barista hired for a retail job in a STARBUCKS and they have to master a STAR SKILL. STARBUCKS has a very rich culture and their employee customer relationship is very strong they believe that – `Customers can replicate the products STARBUCKS serves, but competitors can’t replicate the STARBUCKS people serving their products to customers.
- 17. DIRECTING When people are available in organization, they must know what they are expected to do in organization. Directing is said to be a process in which the managers instruct, guide and oversee the performance of the workers to achieve predetermined goals. Directing is said to be the heart of management process. In the case of STARBUCKS HOWARD.D.SCHULTJ is a beautiful example, how he leaded from front. He nurtured the company since 1982, when it had only 4 outlets. He had served as a CEO from 1987 to 2000.
- 18. CONTROLING Controlling involves identification of actual result, comparison of actual result with expected result as set by planning process, identification of deviation between the two, if any and taking of corrective actions so that actual result match with expected result. This case study is a perfect application of controlling function. We can observe that for any company expansion is a good thing but that was not in the case of Starbucks, due to inappropriate execution of different management functions, they failed on achieving there goals. With the proper controlling and team efforts of all the employees and top level management they regained their MARKET SHARE and BRAND IMAGE.
- 19. Conclusion To conclude we can say that STARBUKS is a great example of brand turning around its business by returning to its roots and reconnecting directly with its customers. While many companies are struggling to get back to pre-2007 financial figures, STARBUKS has shown that people are willing to spend $5 or 3 pound every day on their LATTE and TWEETS about it. STARBUCKS is a company to watch out for as it continuous to innovate, a story where every customer is a stakeholder and vested in the company.
- 20. REFRENCE ANJA LAMBRECHT Assistant Professor of Marketing, LBS John Quelch Professor at Harvard Business School Tripti Lochan Chief Executive officier,VML Qais
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Presentation on : Case study- Starbucks- Going Global Fast
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The astounding growth and expansion of Starbucks is outlined, both on a global scale and within Austra-lia. The focus then shifts to the abrupt closure of three-quarters of the Australian stores in mid 2008. Several reasons for these closures are described and examined, including that: Starbucks overestimated their points of differentiation and the perceived value of their supplementary services; their service standards declined; they ignored some golden rules of international marketing; they expanded too quickly and forced themselves upon an unwilling public; they entered late into a highly competitive market; they failed to communicate the brand; and their business model was unsustainable. Key lessons that may go beyond the specifics of the Starbucks case are the importance of: undertaking market research and taking note of it; thinking globally but acting locally; establishing a differential advantage and then striving to sustain it; not losing sight of what makes a brand successful in the first place; and the necessity of having a sustainable business model.
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The purpose of this research is to examine the effects of external environment pertaining to the marketing strategy of Starbucks, a coffee chain in Malaysia. An external environmental analysis has been conducted to examine the environment in which the company operates. These paper overviews several theoretical approaches to explore the strategic marketing planning process of the Starbucks Malaysia.
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Starbucks Case Study - PowerPoint PPT Presentation
Starbucks Case Study
Starbucks case study john baab, charly costigan, tyler kleckner, ashley kreuer, ellen park, ashley wooding outline background and history gerald baldwin, gordon ... – powerpoint ppt presentation.
- John Baab, Charly Costigan,
- Tyler Kleckner, Ashley Kreuer,
- Ellen Park, Ashley Wooding
- Gerald Baldwin, Gordon Bowker, and Ziev Siegl opened a small coffee shop in Seattles Pike Place Market in 1971
- Howard Schultz Joined the Starbucks marketing team
- Traveled to Italy and became interested in the espresso bars and tried to bring it to America
- Founders sold the company to Shultz
- Began to open new stores and had 140 stores by 1992
- Decided to take the company public and succeeded by opening more stores
- Shultz continued to take the position as chairman and chief global strategist and hired CEO Orin Smith in 2002
- To satisfy customers and to create a third place environment
- Three components to branding strategy the coffee itself, service, and atmosphere
- 5,886 stores(4574 National, 1312 International)
- Customers(20 million total, 570 per week per store)
- Net Income of 215 million
- Customer Demographic (Traditional vs. New)
- Menu (Average price of drink 3.85, 30 drinks, and 23 whole bean coffee blends)
- Partners 360 total labor hours and an average pay rate of 9.00 per hour
- Partnerships (Pepsi Bottling Co., Kraft Foods, and Dreyers Ice cream)
- Starbucks Share of Specialty Coffee Market 50 (estimate) 20.5 Total Market Share
- Well developed and established brand strategy live coffee
- Product Mix
- Customization of Drinks
- Caused tension between product quality and customer focus
- Increased menu size
- Lacked a strategic marketing group
- Very little image product differentiation
- Increase Customer Satisfaction
- Customer Quota
- Increase the number of stores
- Domestically/Internationally
- Create New Products Services
- Competition
- Donut Bagel Chains
- Small scale specialty coffee chains
- Key Problem Maintaining a customer focused brand image while continuing expansion
- Customer Satisfaction
- Lost sight of the consumer
- Lost connection between customers and growing business
- Service gap
- Investment Plan
- 40 million annually
- Add 20 labor hours a week
- Maintain 3 minute service time goal
- Increase customer satisfaction
- Goal All stores achieve 20,000 increase in weekly sales
- New Incentives for customer
- Ideas Drink of the day, membership cards, serve at your seat
- Incentives for Partners
- Adding 20 hours during peak hours to maintain 3 minute time
- More authority to regional retail managers
- Install a rolling menu policy
- Moving into new domestic and international markets
- Not saturating existing markets
- Instead move into untapped domestic markets and increase through put at current stores through added hours
- Advantages Will appear more customer focused locally, faster
- customer service
- brand image
- Marketing plan
- International
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STARBUCKS A Case Analysis
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Starbucks Case Study
Starbucks Case Study. The Acquisition of Seattle’s Best Brad Gilbert Jessica Iversen Holly Kunz Methodist University . Overview. Who? What? When? Where? How? Why? Courses of Action Solution/Results. Who?. HISTORY Starbucks is the largest coffeehouse company in the world
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Starbucks Case Study The Acquisition of Seattle’s Best Brad GilbertJessica IversenHolly KunzMethodist University
Overview • Who? • What? • When? • Where? • How? • Why? • Courses of Action • Solution/Results
Who? HISTORYStarbucks is the largest coffeehouse company in the world -Founded in Seattle in 1971 -Over 17,009 locations in over 50 countries -2010 Net income $945,600
Who? Seattle’s Best Coffee HISTORY: -1970 Whidbey Island, Washington (Wet Whisker)-Stewart Brothers Coffee Pier 70 -Pike Place Market -1988 SBC- local restaurant blind taste test -1998 AFC Enterprises
Starbucks vs. Seattle’s Best 2003 Comparison • 4,952 location in North America • 90 Seattle locations • # of employees • Annual sales (2002) $ • 129 locations in North America • 22 Seattle locations • # of employees • Annual sales (2002) $
What? • The Acquisition of Seattle’s Best Coffee (Set the scene, give background) • AFC Enterprises accounting scandal • Seattle’s Best and Cinnabon up for sale • (The sale of these companies has allowed AFC Enterprises to shift focus to Popeye’s and maximize the value of their portfolio)
When? • April 2003 (timeframe)
Where? • Seattle, Washington (location)
How? • Both Starbucks and Seattle’s Best Coffee are major companies in the Seattle and the Pacific Northwest coffee scene. They are often competitors for the same retail space. Both have loyal fans with an almost cult-like devotion to their preferred brand. (Identify main players/relationships/interactions)
Why? • Should Starbucks continue to compete with Seattle’s Best Coffee? Starbucks had the money and saw an opportunity to acquire their competitor. Should they purchase them to close them down, prevent them from growing, or use them to expand the overall corporation? (address financial management issue-issue that forces an examination of all courses of action)
Courses of Action • 1. Do not buy Seattle’s Best. Continue to compete and operate as before. • 2. Buy SBC and close them down and completely absorb them. • 3. Buy SBC and keep them as a separate company. Create differentiation between brands. Use SBC distribution network to help Starbucks enter grocery stores.
The Future of Starbucks • Starbucks/Peet’s Merger • Starbucks/Green Mountain • Starbucks Specialty Barista Bar • Regional Beer/Wine/Cheese
Starbucks vs. Seattle’s Best
References • http://www.seattlepi.com/business/article/Starbucks-to-buy-Seattle-s-Best-Coffee-1112367.php • http://adage.com/print/96033
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1971 - Starbucks Coffee opens is first store in the Pike Place Market in Seattle, Washington. • 1984 - Howard Schultz convinces the original
CASE STUDY CONTENTS 1- INTRODUCTION 2- STARBUCKS STORY 3- CLOSING OF STORES AND. THE WORLDS LARGEST COFFEE RETAILER STARBUKS PULLED ITSELF OUT
Presentation on : Case study- Starbucks- Going Global Fast. ... IT'S NOT JUST COFFEE ITS STARBUCKS POTENTIAL SOLUTIONS Market saturation can be overcome
Starbucks Case Study John Baab, Charly Costigan, Tyler Kleckner, Ashley Kreuer, Ellen Park, Ashley Wooding Outline Background and History Gerald Baldwin
Presentation on theme: "STARBUCKS A Case Analysis"— Presentation transcript: ... Case Analysis Outline I. Executive Summary ~ T. Kelly II.
Starbucks' mission is to inspire and nurture the human spirit, ... The case study of sonny reveals various aspects of the information security system that
Courses of Action Solution/Results. Who?. HISTORY Starbucks is the largest coffeehouse company in the world Slideshow 1669209 by...
1982 - Howard Schultz joins Starbucks as director of retail operations and marketing. Starbucks begins providing coffee to fine restaurants and espresso bars.
Question: Read the "Howard Schultz and Starbucks Coffee Company" case study in the textbook. Create a PowerPoint presentation of 10-15 slides (with speaker
In addition, the brand image should also have appealing attributes. This is a positioning strategy that ppt allow the company to trade in other products besides