CASE 1: STARBUCKS – GOING GLOBAL FAST
A – Summary:
This case was prepared in 2002, therefore, numbers and references also used at the time of the preparation. Starbucks is one of the largest chains of coffee shops in the world. Their business first started in the early 80s on Sixth Avenue and Pine Street in downtown Seattle as a tiny chain coffee shop. Then, they grew up rapidly in the 90s and spread out 5,689 outlets within 28 countries in 2002. Being very well managed by a well seasoned management team which is known as H2O from the combination of 3 names: Howard Schultz (Chairman and Chief Global Strategist), Howard Behar (Head of North American Operations) and Orion Smith (CEO), this first chain of Starbucks was successfully popular on that time. Since it went public in 1991, the company has expanded colossally. But it also encountered many problems. It was faced with the problem that it had mounted in home and abroad. The period of the Starbucks’ success was the baby boomers in the 90s, but now it change. The Generation X is different with before, now does not like the environment of the shop, in addition of the young generation feel out of place in the coffee shop. Once of their causes is also the price of coffee seems to be little expensive to them. Being with not much competition likes Mc Donald’s at that time, but they also faced with the competitors such as Tully’s coffee shop. Besides, they also faced with employees’ discontentment. The expensive and aggressive marketing strategy has given Starbucks market dominancy. In account of their earning $181.2 million in the year 2000, although sales was still growing, but it started grow in a decreasing rate. The problem is their aggressive strategy and attitude towards competitors. They not only grew rivalry with local business people but also starting lost customers. And it became so difficult to them to maintain their growth of 20% only on domestic market. Therefore, they decided to spread out overseas....
Please join StudyMode to read the full document