Case Study: Gazing at Starbucks?
1. In this case study you can read the four reasons why gazing has become an important trend. Why is it important for companies like Starbucks to know the reasons behind this trend?
In the case author states four reasons why gazing became an important trend:
Fast pace life and time pressure leave no time to cook and leads people to eat on the go
People spend much more time driving and eating in their cars
Lack of family life leads to unstructured life of teens affecting their eating habits
"Small households typically cook fewer meals" In the USA this number increased to 60 percent.
It is important for companies like Starbucks to know the reasons behind this trend because of the following. First of all this trend has an impact on strategic planning. It is crucial to take in to account uncertainties of changing market while assessing external environment (customers, industry, competitors, etc) and internal strength and weaknesses of the company. This trend influences company's formulation of objectives and business strategies.
Secondly, understanding reasons facilitates formulation marketing strategy. More specifically, the company formulates marketing concept and builds brand reputation by understanding customer's needs. For example, after analyzing customers eating behaviors and finding that only "35 percent of Americans eat two or fewer "square" meals daily" Starbucks sell only high quality coffees along with variety of pastries and few sandwiches in the "coffee bars."
Thirdly, taking into account reasons helps develop a customer oriented mission (what are we doing now? and visions (what do we want to achieve in the future?). The company tested four Café Starbucks in Seattle area, where they were serving meals. However, Cafés were soon closed as customers come to Starbucks to gaze rather than eat. Therefore, understanding the reasons behind this trend helped to identify the vision of the organization to stay a "coffee bar" rather than Café Starbucks.
To make best business and marketing decisions is only possible when acquiring all the possible knowledge about the current trends and the reasons behind it.
2. Suppose the marketing manager of Starbucks wants to use the information in this case as input for a strategic marketing plan.
a. Which information in this case should be part of the customer analysis?
Customer analysis includes potential customer's attributes, needs, and perceptions about the company. In the case author distinguished different segments of customers.
One critical obstacle for the Starbucks franchise is the over saturation of the market, they continued to build new businesses in local markets with out giving each the opportunity to solidify their customer base, some building as close as 2 blocks in large metropolitan areas. The economy could also have a direct impact on the Starbucks franchise. During times of prosperity and job security it is more comfortable to spend $2.10 on a 16 oz. cup of coffee than a $5.15 for a medium sized specialty coffee drink such as a Café Mocha or Carmel Macchiato. When the economy is down, the average consumer will cut
People felt Starbucks was bitter and tasted burnt (The Seattle Times, February 2007). But still Starbucks sells more coffee than McDonald’s. Starbucks means best cup of coffee for many. Question here arises is, why is that so? If McDonald’s coffee tastes better why customers buy Starbucks coffee? The answer to this question is the message we got from the article. Starbucks is customer oriented. It provides personalized services buy writing you name on your cup of coffee. If you a regular customer and drinks same type of coffee, the staff at the outlet you most remembers it. They are friendly. They make you feel
Over the years that Starbucks had been out, they have not only made very odd choices to their strategies, but they’ve notoriously found a way to also work in the past. Starbucks has made a name for itself in today’s society along with its competitor’s right behind them. The company has differentiated itself from various competitors making it one step ahead of all other companies. Starbucks has been introducing new products into its menu and spreading many services to offers. Their innovation to grow and expand has certainly take a whole step and
The importance of economic indicators to the strategic planning process in any organization is the ability to benchmark economic conditions that contribute to improve profitability, business growth and market size. Leadership sets up the mission “to establish Starbucks as the most recognized and respected brand in the world.” In doing so, they have created a set of industry-leading, comprehensive coffee-buying guidelines addressing coffee quality, financial transparency, social and environmental responsibility. Starbucks strategy is also expanding market in globally to provide high quality coffee in convenient and visibility locations. They are continuing to innovate and extend the business with imaginative new ready-to-drink beverages and expanded packaged coffee offerings (Starbucks Corporation, 2007).
There have been some distinguished controllable and uncontrollable elements Starbucks has encountered when entering global markets. The strategies of any company’s goals are vital to its success. This is one area Starbucks has excelled in, just as McDonald’s has in recent years. Starbucks has paralleled its branding with the actions found at any Starbucks across the world. They have an excellent company vision, which they stick to, which in turn assists their brand image. Starbucks’ image has been achieved not only through this and their massive global entrance, but through their ability to provide honest quality service.
Venkatraman, M., & Nelson, T. (2008). From servicescape to consumptionscape: a photo-elicitation study of Starbucks in the New China. Journal of International Business Studies, 39(6), 1010-1026. doi: 1535534671.
e number one concern in all business is profit. When someone wonders why Starbucks’ business is so successful they can find their answer in the statistics. In Q3 2015, the total net revenues rose about 18% amassing a new record at $4.9B. The company cited this substantial increase in revenue to obtaining Starbucks Japan and the opening of 1,592 new stores in the last year.1 The company also witnessed a 22% rise in profitability credited to sales leverage.2 Starbucks saw continued growth globally, in the Americas, and the China/Asian Pacific at 7%, 8%, and 11%, respectively, accounting for an increase in customer transactions climbing towards 18M in the U.S. and 23M globally.3 These increases across the board could be accredited for the 21%
Emphasis on quality, Starbucks Experience, brand image, and important suppliers to dispute lower price contributions to competitors hence increasing profits
Answer: the motivation behind this report is to basically look at the inward and outer components influencing the starbucks needs issues. This will be expert applying PESTLE investigation, PORTER 4 strengths model and SWOT examination of the association.
Koehn, N.F., Besharov, M.A., & Miller, K. (2008). Starbucks Coffee Company in the 21st Century. [Case study]. Boston, MA: Harvard Business School Publishing.
With clear core values towards providing quality coffee, the best service, and atmosphere, Starbucks has enjoyed great success since it was founded 30 years ago. The company has being doing very well for last 11 years with 5% or more store sales increase, even with the rest economy still reeling from the post-9/11 recession. However recent research, conducted to Starbucks, have showed some concerns regarding company’s problem meeting customers’ expectations.
One of the main problems that Starbucks is facing at the present time is the ability to maintain national competitive advantage (Monash South Africa, 2014). Due to their local demand conditions, Starbucks tries to satisfy all customers by trying “to inspire and nurture the human spirit – one person, one cup and one neighborhood at a time” (Starbucks Corporation, 2014). Local demand conditons consist of a company trying satisfy needs of their closest customers and expanding their competitive advantage by upgrading their strategic management policies (Monash South Africa, 2014).
In 2002, unexpected findings of a market research showed problems regarding customer satisfaction and brand meaning for Starbucks customers. The situation was unacceptable for a company whose overall objective is to build the most recognized and respected brand in the world. Starbucks was supposed to represent a new and different place where any man would relax and enjoy quality time, alone or with others. But the market research showed that in the mind of the consumers, Starbucks brand is viewed as corporative, trying to expand endlessly and looking to make lots of money. This huge gap between customers' perception and Starbucks' values and goals called for immediate action.
The structure of Starbucks business communication is exceptional. Rather you are in their store buying a Caramel Frappuccino®, visiting their website or watching one of their advertisements on television; as the consumer, the message is loud and clear. Pick up any newspaper and you are likely to find an article about the coffee giant. Starbucks pledges a commitment to their over 172,000 partners (employees) and the community. “We realize our people are the cornerstone of our success, and we know that their ideas, commitment and connection to our customers are truly the essential elements in the Starbucks Experience” (Starbucks, 2008).
In addition to being best-known supplier of the finest coffee and promising only the highest quality products, Starbucks emphasizes firm values, provides guidelines to enhance employee self-esteem. This is to ensure continued customer satisfaction. Moreover, diversity has become a priority to providing an inviting environment to all consumers. Starbucks continues to abide by a strict, slow growth policy in which they set out to dominate a market before moving on to expand, thus history has shown this strategy to be successful for Starbucks, making them one the fastest growing companies nationwide.