Starbucks Case Study
Starbucks Case Analysis
By Rizwan Ahmad
Brief Contents: (i.) (ii.) (iii.) (iv.) (v.) (vi.) (vii.) Problem Statement Alternative Solutions Recommendations (A plan of action is summarized concisely in exhibits 3 & 4) EXHIBIT 1 EXHIBIT 2 EXHIBIT 3 (Short-term Plan of Action) EXHIBIT 4 (Long-term Plan of Action)
Problem Statement With the ‘Gate of Heavenly Peace’ to its north, the world’s largest public space is the centerpiece in a presentation of structures built on an inhuman scale. This UNESCO World Heritage site situated just outside the Forbidden City has hosted innumerable events of historical and cultural significance; including, from the years 2000 to 2007, a Starbucks franchise. Though locating a franchise near central Beijing would have been a strong strategic decision, placing a Starbucks in Tiananmen Square was both culturally insensitive and foolish. Such expansionary overload typifies the coffee company’s performance over the last several years. As a consequence, Starbucks’
excessive focus on growth has undermined its ability to provide a level of customer service consistent with its stated corporate identity. Fundamentally, an inadvertent regression from a marketing orientation toward a product orientation has been the cause of Starbucks’ problems. The company’s original strategy was
comprised of three simple components, each focusing upon the customer’s experience. § First, Starbucks “prided itself on offering what it believed to be the highest quality coffee in the world.” § The second component, “customer intimacy,” focused on creating an “uplifting experience” for each patron who visited a store. § Third, Starbucks wanted to create an ambient coffeehouse environment where people came for the coffee, but would stay for the atmosphere. Moreover, employees encouraged
customers to linger, lounge, and enjoy a sense of community in “an upscale yet inviting environment.”1 However, recent surveys of customer attitudes toward Starbucks have
By Rizwan Ahmad
Brief Contents: (i.) (ii.) (iii.) (iv.) (v.) (vi.) (vii.) Problem Statement Alternative Solutions Recommendations (A plan of action is summarized concisely in exhibits 3 & 4) EXHIBIT 1 EXHIBIT 2 EXHIBIT 3 (Short-term Plan of Action) EXHIBIT 4 (Long-term Plan of Action)
Problem Statement With the ‘Gate of Heavenly Peace’ to its north, the world’s largest public space is the centerpiece in a presentation of structures built on an inhuman scale. This UNESCO World Heritage site situated just outside the Forbidden City has hosted innumerable events of historical and cultural significance; including, from the years 2000 to 2007, a Starbucks franchise. Though locating a franchise near central Beijing would have been a strong strategic decision, placing a Starbucks in Tiananmen Square was both culturally insensitive and foolish. Such expansionary overload typifies the coffee company’s performance over the last several years. As a consequence, Starbucks’
excessive focus on growth has undermined its ability to provide a level of customer service consistent with its stated corporate identity. Fundamentally, an inadvertent regression from a marketing orientation toward a product orientation has been the cause of Starbucks’ problems. The company’s original strategy was
comprised of three simple components, each focusing upon the customer’s experience. § First, Starbucks “prided itself on offering what it believed to be the highest quality coffee in the world.” § The second component, “customer intimacy,” focused on creating an “uplifting experience” for each patron who visited a store. § Third, Starbucks wanted to create an ambient coffeehouse environment where people came for the coffee, but would stay for the atmosphere. Moreover, employees encouraged
customers to linger, lounge, and enjoy a sense of community in “an upscale yet inviting environment.”1 However, recent surveys of customer attitudes toward Starbucks have