Starbucks Case Study | Starbucks Assignment

Added on - 06 Jun 2020

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Case study on MBAprogram
TABLE OF CONTENTSA STARBUCKS ON EVERY CORNER........................................................................................1Introduction.................................................................................................................................1Background.................................................................................................................................1Key Problems..............................................................................................................................2Alternatives.................................................................................................................................3Proposed solution........................................................................................................................3Recommendation.........................................................................................................................4REFERENCES................................................................................................................................5
A STARBUCKS ON EVERY CORNERIntroductionThe decline in the Starbucks was seen after the year 2007, when a memo of HowardSchultz was leaked. It showed that there was no growth and company was having loss at theoutside stores. New strategies such as Wi-Fi, music for sale were included but then also their 600stores were closed in US and there was no improvements. Harvard Business Review (HBR)stated that there are three main problems that resulted in fall. Starting from Seattle-based-chainthey ended with great loss in 2008. The owners tried to minimize the threats, however, they havedeal with it in future (Chua, and Banerjee, 2013). As mentioned by HBR, that the price andexperience were no longer left and new planning is required by the Starbucks. There weredifficulties in raising the sales per store and removing the basic products. However, during thesame period there was rise in McDonald sales as they were providing better sales which raisedtheir sales to 13%. After 2003, there was decline in Starbucks trading and their sales went toolow (40%). HBR identified three issues that were restricting their growth, these were: isolatedearly-adopters, to broaden the appeal they added too many products and superficial growththrough new products. Superficial-growth has provided many issues and challenges to thecompany.BackgroundThere has been successful growth of Starbucks The main issues were related to themanagement turnover and due to this reason there was fall in the company's sales. There wasalso recession in US which lead to less customers and downfall in the sales. Due to this reasonthe company was unable to achieve its target were facing huge loss in market. Along with this,there were many competitors raised against the Starbucks which influenced the Customers.There were new exclusive brands such as Caribou, Peets etc (Ngai and et. al., 2015). which wereinfluencing the customers and they too were switching towards them. Additionally, there waspremium prices of for their coffee but Dunkin-Donuts has made improvements in their coffeethat too at lower prices. This led to increase their sales at period of recession and fall ofStarbucks. Increased in the stores have made have made people less prioritise the stores. Therewas no customer experience but prices were way too high for them. Moreover, the company hasto identify new ways through which they can reduce their fixed costs so that they can improvetheir operating leverage (He, Zha and Li, 2013). Major advantages was taken by the McDonalds1
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