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Strategic management starbucks case study
Strategic management starbucks case study
Strategic management starbucks case study
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The Rise of Starbucks
The Starbucks Corporation has enjoyed phenomenal growth since its early days in 1971 as a quaint coffee shop in Seattle, Washington. The rise of Starbucks can be directly attributed to the following factors; the emphasis placed on product quality, high employee standards, and creating the perfect cup of coffee.
How a small idea became a huge business. Growing up in Brooklyn Howard Schultz had no aspirations. His only goal was to escape the struggles his working-class parents lived every day (Schultz 107).
Eventually, Schultz discovered his talent for sales, and was hired by a Swedish housewares corporation. By age 28, he was vice president in charge of sales in the United States. He has an excellent salary, a co-op apartment in New York City and was happily married. However, Schultz wasn't satisfied with all he had accomplished. He wanted to be in charge of his own destiny (107).
It was then in the early 1980's that he was introduced to the company, Starbucks Coffee and Tea. Starbucks's original was modest but full of character. Schultz was immediately impressed by its charm. Importantly, he thought the coffee was wonderful (Schultz 108). He then had dinner with a friend, Jerry Baldwin owner of Starbucks and his partner, Gordon Bowker. Schultz tried to persuade Baldwin to hire him as an employee, even though it did not seem to be a logical career move. But for Schultz Starbucks held an inexplicable attraction. He soon found many reasons to get back to Seattle and visit (108).
Then in the spring of 1982, Jerry and Gordon invited Schultz to meet Board member Steve Donovan. Schultz told the men what he saw for the future of the company. The partners seemed inspired by his vision. But they had decided not to hire Schultz. They felt his vision, was not what they had in mind for the company (108). Schultz still believed so much in the future of Starbucks that he couldn't except 'no'; as an answer. He then contacted Baldwin and protested that he wasn't selfishly interested in a job but it was more so about what he wanted to do for the company. Finally, Schultz had a job working at Starbucks (Schultz 109).
Then, after working there for a year, he had a simple experience that changed his life. He traveled to Milan, Italy to attend an international housewares show. While, traveling he noticed a little espresso bar.
Becoming a successful businessman in today’s society is truly a commendable triumph. Success in their career is something every assiduous businessman strives to achieve. Jeff Kaplan can rightfully hold this title, he is the epitome of a successful business man due to working hard his entire life. Throughout his interview the stories that are told establish his credibility and make him relatable to his audience. Kaplan appeals to ethos and pathos through his life experiences, the lessons he learned, and the roads he walked to gain his success, making it crystal clear that his example is one to be followed by aspiring businessmen everywhere.
Founded in 1971 at Seattle’s Pike Place Market, Starbucks Coffee, Tea and Spices, as it was originally called, has been “brewing-up” its famous blends in over 43 countries, including the United States. Now called Starbucks Coffee Company, business isn’t just about the coffee and tea anymore. Starbucks has its own line of bottled water, handcrafted beverages, fresh food, entertainment, merchandise and a Starbucks Card. The company has received numerous awards for their outstanding business practices. Fortune Magazine has ranked them as one of “The Best 100 Companies to Work For” in 1998, 2000, 2002, and 2008 (Starbucks, 2008). The Starbucks Experience provides consumers and the general public a direct line a of business communication. From friendly baristas to press releases from CEO Howard Schultz, Starbucks keeps its “partners” informed.
Sam Walton, the retailing maverick and founder of the now largest company in the world, started his career with a small investment, a small loan from his family and a lot of determination.
He started asking questions and becoming more and more interested by every moment. He loved how the founders had so much knowledge on the coffee and each blend. In 1982, Schultz became director of retail operations. This was just the start of a new phase with the company. When Shultz took over, this started the beginning of a new era.
Around 2007 or 2008, Howard returned to Starbucks after leaving for a few years. Everything became very difficult for the company. At the time, their coffee prices were shown as extremely ridiculous and their sales began to decline. Other companies took this as their time to join the coffee business and gave Starbucks a run for it’s money. As for the people buying their product, bloggers began discriminating against how Starbucks handled some things in their stores, like wasting water while washing their equipment. Since publicity relates to a lot of company’s success, this took an even bigger toll on Howard’s decision making process as CEO. Now that they have passed those bad days of criticism, their main problem and focus is to maintain intimacy with their customers and their people even as their business continues to grow and become a bigger company and not a small Seattle shop any
Schultz found it humorous the way other businesses surrounding him were ran. After launching Starbucks, Schultz was adamant about running a business that was about more than just the coffee.
Ralph Lauren didn't always wanna work in the fashion business. Up until high school, Lauren wanted to be an athlete, he loved basketball and stickball. During high school, Ralph started getting interested in fashion, and that is where his dream to have his own company began. He has been working towards his dream for multiple years and even when things got tough he always kept going and worked harder. Ralph has worked with many different companies and multiple people, to finally have his own company.
The company’s founder and CEO, Howard Schultz, has been successful in creating Starbucks into something that we didn’t really know we needed until we had it. He has meticulously crafted a brand for the company that adds a psychological value to its offerings. Thereby, when you buy a cup of coffee at Starbucks, you buy an experience. The somewhat quiet, not-so-rushed atmosphere along with dimmed ambience and friendly staff found at Starbucks’ stores add a feel-good factor to your purchase. As a result, people are willing to pay a premium for coffee at Starbucks even if McDonald’s were running a promotion offering free coffee. The premium prices translate to superior margins for its investors.
Question 1:When Howard Schultz launched Starbucks, who was the target market and how was Starbucks positioned to appeal to this target market?
Howard Shultz and the senior management at Starbucks have to decide how to react to the opportunities that are being made available because of their rapid growth. The decision for a strategic growth plan has to be made in the near future. This will prove to be key for Starbucks reaching their long-term goal of becoming the most recognized and respected brand of coffee in the world.
In 2000, Schultz promoted Orin Smith to the position of CEO. Schultz remained chairman for the corporation. This allowed Schultz to focus on Starbucks¡¦ global strategy. Starbucks operates and licenses more the 7,500 coffee shops in more than 30 countries.
At an early age of 10 he started his first business, buying matches at wholesale in Stockholm and selling them for small profits to his neighbours, the demand for this type of selling increased so he planned to give some discounts to make his sales bounce high.
There are many topics that arise throughout the case with Starbucks Corporation. Starbucks Coffee is located worldwide and there are many different ways to look at this situation. The company offers a unique range of coffee, lattes, espressos, and café style drinks. The company intended to reach a specific target audience, but has ended up in many different markets and has been growing rapidly. Starbucks has greatly used the “youth appeal” strategy to gain entrance into new markets. However, such enthusiasm cannot be counted on indefinitely; other strategies are always in the works. Over time Starbucks has been able to acquire a solid brand reputation and has a world renowned company logo.
In 1971, three young entrepreneurs began the Starbucks Corporation in Seattle Washington. Their key goal was to sell whole coffee beans. Soon after, Starbucks began experiencing huge growth, opening five stores all of which had roasting facilities, sold coffee beans and room for local restaurants. In 1987, Howard Schultz bought Starbucks from its original owners for $4 million after expanding Starbucks by opening three coffee bars. These coffee bars were based on an idea that was originally proposed to the owner who recruited him into the corporation as manager of retail and marketing. Overall, Schultz strategy for Starbucks was to grow slow. Starbucks went on to suffer financial losses and overhead operating expenses rose as Starbucks continued its slow expansion process. Despite the initial financial troubles, Starbucks went on to expand to 870 stores by 1996. Sales increased 84%, which brought the corporation out of debt. With the growing success, Starbucks planned to open 2000 stores by year 2000.
The strategic vision that Howard Schultz had for Starbucks was "Establish Starbucks as the premier purveyor of the finest coffee in the world while maintaining our uncompromising principles while we grow". This s...