Starbucks Case Study
History of the company
The story of Starbucks started in 1971 when 3 friends who like fresh coffee decided to open a coffee shop where they selled fresh roasted, gourmet coffee beans and brewing and roasting accessories.
But things changed from the 80s when Schultz is hired as head of marketing. He revolutionated the company's concept and by the way its future. After a trip to Italy, where he was amazed by the special atmosphere in coffee houses. Then he convinced the friends to export the experience he had by carrying out a test: to open/opening a small coffee bar in one of their existing stores. It was a real success. In 1987 Schultz took over the company .
-A success story: how a small local company can turn into a famous multinational with more than 9000 stores in 34 countries all over the world
-Well known company worldwide, pionneer company, revolutionised the way to drink coffee → innovative concept in the 80s. SB store: a place where you can drink a quality coffee while working in a comfortable atmosphere
-High profits $241.5m in 2009 ($64.3m in 2008)
Extensive cost-cutting work in 2009
Cut thousands of jobs and closed non performing stores
-Success mostly due to word of mouth advertising → shows a positive brand image
-Over expansion : too many outlets → Problem of “cannibalism” stores taking business to each other → SB has lost its exclusive image, that made it popular -Instant coffee
-Emplyee fear of losing their jobs
-Fall in sales (2007) in its home market, and fall in share prices too (-40%)
These problems are threatening its image for social responsibility, environmental awareness, sensitivity to worker's right
→ All the coffee stores brands are similar. They can innovate in order to be different from its competitors and win customers
SB started to react:
→ Lower price coffees
→ Schultz wants...
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