When retailers decide to compete in new markets, or introduce new product lines, they may find it difficult to predict how the decision will impact customers (current and new), operations, and competitive position. For example, McDonald's recent move to serve breakfast products all day has made customers happy but made business more complicated for their franchise owners. There have been complaints that kitchens are not set up for the variety of foods being prepared, more staff are required, and average customer bills are lower due to people eating less expensive breakfast menu items instead of more expensive lunch and dinner items. Even though McDonald's stores have experience preparing and serving the breakfast foods, and they already have suppliers lined up to provide ingredients, the logistics of implementing this new
strategy require more than the company anticipated.
Starbucks has pursued a growth strategy through geographic expansion, market penetration (selling hot beverages through grocery stores and Barnes and Noble Starbucks Café agreements), and the introduction of new items: frozen coffee drinks, juice drinks, instant coffee, breakfast foods and teas). Starbuck's latest strategy is the inclusion of beer, wine and appetizers sold in the afternoon and evening in some stores (see article in Doc Sharing).
Your task is to evaluate this new strategy by anticipating potential consequences (positive and negative) that will result from this decision. Not every location will be pursuing this direction. Initially only three stores in the DFW area are serving beer, wine and appetizers.
I would expect a minimum of 3 recent news or industry articles, in addition to your textbook, to adequately research this situation. You may want to observe regular Starbucks stores (not serving wine and beer) in the late afternoon or evening to see how much traffic, and what types of customers visit Starbucks at that time of day. The rubric at the end of the syllabus shows my grading criteria.
1. Impact on current customers and new customers
2. Possible Competitive Responses
a. Who will respond?
b. What are they likely to do?
Attachment:- starbucks_article.rar