Starbucks: A Strategic Change and Management Perspective
Starbucks Coffee Company's success in the coffee business echoed resoundingly across the globe. The company was able to attract many customers despite its overpriced coffee. The coffee-chain managed to draw the attention of investors as well, as they saw in the Starbucks a profitable investment. Starbucks is best known for its overpriced coffee and its excellent stores adorned with comfortable couches and wonderful music. Starbucks marketed itself as the "Third Place" - a place where people can go aside from home and the workplace.
The rapid growth of Starbucks has become a success story in the business world and many people are bewildered by the company's business strategy. Who could have imagined that a coffee outlet, selling overpriced coffee with fancy Italian names, can persuade people to buy its products, and can make these people happy? Why are financiers lured into investing in the company? Why do investors put their money in Starbucks stocks? What's in Starbucks that made it very successful in the coffee business, selling its products at grossly high prices and yet been able to attract both the buyers and the investors?
For sure, the speedy success of Starbucks is a mystery in the industry of coffee business. Starbucks' rivals were not able to match the rapid growth of the company. In a span of less than two decades, Starbucks was able to open tens of thousands of stores across the globe. The value of its shares in the stock market also increased rapidly, evidence of its attractiveness to investors.
However, the Starbucks "miracle" ceased to become a miracle. The fast-paced growth that the company experienced had gone to a sudden stop. Starbucks posted a 50% decline in profit by the end of the 2008 fiscal year. The company's stocks fell sharply to $9.44 at the end of 2008, from a high of $38.45 in mid-2007. Currently, the coffee store is undertaking a major organizational retransformation. Starbuck has always associated itself with high customer satisfaction level. In the recent survey carried out by the marketing department found out that Starbucks was not meeting its customer's expectations in terms of customer satisfactions.
This disturbing new finding has concerned Starbuck and through analysis of key indicators it was necessary to find out what has caused customer satisfaction level in Starbucks to fall.
Assessment Requirements:
1. Write a critical review of the article above. Critically evaluate the strengths and weaknesses of the opinions of the author and discuss both the positive and negative points based on your overall judgment.
2. Discuss your own point of view on how change can be implemented based on your evaluation. Relate your critical analysis to any of the theoretical models of change.