Case Study: Starbucks - Innovation & Growth Analysis (June 2021)

This case study analyzes Starbucks' performance using qualitative and quantitative methods, focusing on pre- and post-COVID sales and profitability. Descriptive statistics reveal a decrease in net profit despite increased sales post-COVID, highlighting the impact of the pandemic. The analysis incorporates secondary sources discussing Starbucks' marketing strategies, particularly social media engagement. The study evaluates the pros and cons of qualitative and quantitative methods and provides recommendations for improving Starbucks' profitability through expense management and product innovation. The report concludes that continuous business analysis is crucial for performance improvement and suggests strategies for Starbucks to enhance its financial standing.

Case Study Analysis

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
Collection of data and applying qualitative and quantitative methods.......................................3
Pros and cons of both the methods..............................................................................................5
Recommendation for growth of company...................................................................................6
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
For the company to be successful it is necessary that the financial position and
profitability of business is good. Hence, for the business it is crucial that they continuously
monitor the performance and apply various qualitative and quantitative tool in order to evaluate
the actual performance of the company. the current report is based on Starbucks which is an
American multinational coffeehouse chain founded in 1971 and operates worldwide. The
current report will outline the use of various qualitative and quantitative methods for evaluating
the business and its need. In the end the after evaluation some of the recommendation will be
provided to the company for improving its performance.
Collection of data and applying qualitative and quantitative methods
The current pandemic has affected the hospitality sector to a great extent. Also, the sales
and profitability of the business has been affected in great way and majorly it is seen a decline in
both. Thus, for the effective evaluation of the performance of Starbucks the use of both
qualitative and quantitative data has been used and this will provide a wide range of information
relating to the company. for analysing the impact of pandemic the profitability and sales of the
business will be evaluated.
Data of sales pre and post COVID
Pre- COVID Post COVID
Year 2017 2018 2019 2020 2021
Sales 22386.8 24719.5 26508.6 23518 29060.6
Net profit 2884.7 4518 3599.2 928.3 4199.3

Descriptive statistics
Pre COVID
Sales
Pre COVID net
profit
Post COVID
sales
Post COVID net
profit
Mean 24538.3 3667.3 26289.3 2563.8
Standard Error 1193.305478 472.7209995 2771.3 1635.5
Median 24719.5 3599.2 26289.3 2563.8
Mode #N/A #N/A #N/A #N/A
Standard Deviation 2066.865716 818.7767889 3919.21 2312.95
Sample Variance 4271933.89 670395.43 1.5E+07 5349721
Kurtosis #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Skewness -0.391478243 0.37168868 #DIV/0! #DIV/0!
Range 4121.8 1633.3 5542.6 3271
Minimum 22386.8 2884.7 23518 928.3
Maximum 26508.6 4518 29060.6 4199.3
Sum 73614.9 11001.9 52578.6 5127.6
Count 3 3 2 2
Confidence
Level(95.0%) 5134.379071 2033.954299 35212.7 20781
With the analysis of the above descriptive statistics it is clear that there is a difference in
the sales and profit of pre and post COVID. This is pertaining to the fact that due to the
pandemic the working efficiency of the company has reduced and the profitability as well. With
the help of the mean pre COVID sales it is clear that it is 24538.3 whereas post COVID it is
more that is 26289.3 (Starbucks Fiscal 2021 Annual Report, 2021). But on the other side, the

average profit pre COVID is 3667.3 and post COVID it is 2563.8. This simply implies that the
profitability of Starbucks has reduced after the pandemic. Even though the average sales have
increased but the average net profit has reduced to a great extent. this simply means that due to
the pandemic the expenses of the company have increased and as a result of this the profits of
company have declined.
With the discussion of secondary sources, it is clear that the company has worked much
on the marketing in order to improve the sales. In accordance with opinion of Lombardi, Chidiac
and Record (2021) with the good use of social media marketing the company has increased the
sales of the business. But in proportion to the sales, the company was not able to reduce the
expenses and as a result of this the overall profitability of business reduced. The outbreak of the
current pandemic has affected the sales and net profits of the company to a great extent. This is
because of the reason that there was economic shutdown and as a result of this, the working was
affected to a great extent. Further, by focusing on the various strategies and operation the
company was able to revive and improve its performance.
As per the views of Wang (2021) Starbucks has utilised the social media marketing
strategy in very good manner and this provided better outcome to the company. The company
undertakes the use of combination different platforms like Facebook, Instagram, YouTube,
Twitter and many other platforms. In addition to this the company has also undertaken many
different types of marketing campaign like Tweet- a- Coffee campaign for improving the
working and sales of the company.
Moreover, Tong (2021) supported that the post COVID revival of business assisted the
company in improving many aspect of the business. This is because of the reason that for coming
up from pandemic effects the company has implemented many new technologies in order to
improve the working efficiency of the business. Further, the company has also worked for
improving the supply chain and the delivery system as well. this is particularly because of the
reason that use of technology will definitely improve the working of the business to a great
extent.
Pros and cons of both the methods
Type of method Pros Cons
Qualitative method This method does not
undertake use of numeric
There is possibility of biasness
which can be both intentional

information and focus on
concept.
Another benefit is that it is
more flexible and improve
knowledge of reader.
or unintentional
Quantitative method Provides precise and accurate
outcome.
Outcome is backed with
numbers and facts.
There can be biasness of
researcher at time of selection
of sample.
Recommendation for growth of company
With the above evaluation there is a need for company to improve the profitability of
business. hence, some of recommendation for Starbucks are as follows-
 The company need to manage and reduce the expenses so that profitability of business
can be improved. This is because already the company expenses are high and because of
this post COVID profit was low. Hence, for improving Starbucks it is necessary that they
cut down their expenses to improve profitability.
 Another recommendation to Starbucks is to bring some innovation within the product so
that consumer is attracted towards the new product range (Gangadharbatla, 2021). This
will improve the interest of the consumer and as a result of this sales of business will
increase.
CONCLUSION
With the above report it is concluded that analysis of business is very important with
respect to performance of the business. the above analysis inferred that after pandemic the profits
of company has reduced and this need to be improved. For this the recommended strategy to
company was to reduce expenses and to bring innovation.

REFERENCES
Books and Journals
Lombardi, C. V., Chidiac, N. T. and Record, B. C., 2021. Starbucks coffee corporation’s
marketing response to the COVID-19 pandemic. Obtenido de Innovative Marketing. 17(2).
pp.177-188.
Tong, H., 2021. The Competitive Advantages of Starbucks in the Chinese Market and the
Success in Recovering from the Coronavirus Outbreak. ECON-Journal of Economics,
Management & Business. 9(1).
Gangadharbatla, H., 2021. Covid-19 and advertising: The case for a paradigm shift. Journal of
Current Issues & Research in Advertising. 42(1). pp.1-18.
Wang, S., 2021, June. Different Marketing Strategies Between Starbucks and Luckin Coffee and
the Impact of the Epidemic. In 2021 International Conference on Enterprise Management
and Economic Development (ICEMED 2021) (pp. 1-5). Atlantis Press.
Online
Starbucks Fiscal 2021 Annual Report. 2021. [Online]. Available through:
<https://s22.q4cdn.com/869488222/files/doc_financials/2021/ar/Starbucks-Fiscal-2021-
Annual-Report.pdf>