Case Study:
How has Starbucks grown their business?
Starbucks has grown its business creating a great brand that not only attracted people to its products but that people could identify with. Starbucks mainly emphasized on creating outlets that whose design brought out a particular social culture as not only a coffee house but a place of connection. They did so by customizing the furniture the artwork and the music creating an atmosphere to suit coffee lovers. After developing a brand they emphasized on serving high quality, tasty and uniquely prepared coffee products, by using dark roasted coffee.Good customer service is promoted to encourage return customers which is maintained through provision of benefits to all employees.
What led to Starbucks' challenges? What mistakes did Starbucks make?
Starbucks' primary challenge was the rapid expansion which was considered reckless whereby 1,300 stores were opened each year. The move saw the stores open virtually everywhere, some of which were remitting minimal returns due to competition with other Starbucks in the area. At the end, it resulted in retrenchment and closing of some stores. The challenge was compounded by the mistake of venturing into new products, beverages and food items considered questionable. Starbucks is known for its quality coffee. Nevertheless, introduction of other products such as breakfast, sale of CDs and sandwiches made the company go off course and cause confusion to its customers.
How do you recommend Starbucks move forward? What needs to be done?
Starbucks can move forward by focusing primarily on the product that made the company successful and maintaining the existing stores as opposed to expanding. Introduction of other beverages and sandwiches made the stores look more as juice and tea shops as opposed to traditional coffee shops as they were meant. The coffee brand has been the most successful product for Starbucks, therefore concentrating on it in its marketing strategies and in the stores will promote its former glory, while focusing on quality and customer satisfaction. It means that other products such as the breakfast and other beverages are eliminated from the menu so that the foremost product is sold.
What are the key difficulties with the "path forward" you recommend?
Starbucks is widely known for coffee sale. Therefore, its attempt to introduce new products that were being sold and that were maintained are likely to falter over time as the primary product talks over resulting in the collapse of the products developed and the loss of customers who were gained primarily due to other products apart from coffee, which is disadvantageous for the business. Additionally, Starbucks' reputation is of only a major coffee competitor. Henceforth, its attempt to venture into otherbusinesssectors if needed will be more difficult and slow for the company.
How Starbucks might be able to pursue growth innovation?
Innovation is the lifeblood of an organization which makes it more likely to adapt and survive despite the changes in the market. For Starbucks expansion into other countries apart from the United States will ensure it promotes its products while pushing the market. Additionally the use of internet and creation of a website where the can build its customers, sell its product at ease and to customers all over the world is vital. Also, expansion through franchising the brand to other goods and services manufacturers in different parts of the world create more capabilities for the product.