Discussion Questions for Starbucks Case
The discussion questions below will be the focus of the in-class case discussion. Try to answer them with as much detail as you can. Write down your answers and bring them to the class for discussion. Starbucks operates in the retail coffee market. In the home, it has 4% share specialty coffee. In the food service channel, it has 5% share. In the grocery stores, it has 7.3% in the ground coffee and 21.7% in the whole beans category.
1. What is Starbucks’ winning formula in its earlier days? Specifically, recall the four components that define a marketing strategy (discussed in week 1 lecture): what characterizes Starbucks’ products and their customers (i.e., the product-market component)? What are Starbucks’ core customer value propositions? And lastly, what does Starbucks do exceptionally well (e.g., think about the 6 types of assets and competencies that firms develop)?
Product market component:
+Diversification: Product mixes (a variety of pastries, sodas, and juices, along with coffee-related accessories and equipment, music CDs, games, and seasonal novelty items) + retail expansion: Market expansion
- Customer value proposition
+ live coffee mantra: keep the national coffee culture alive, create an experience around the consumption of coffee + highest quality coffee (functional)
+ customer intimacy
+ universal appeal, a sense of community (social)
+ just say yes policy to provide best service possible even if it goes beyond company rules
Assets and competencies
+ Innovation: product development and diversification (a line of premium ice creams) the new product development process generally operated on a 12- to 18-month cycle, during which the internal research and development (R&D) team tinkered with product formulations, ran focus groups, and conducted in-store experiments and market tests, store layout to create atmosphere, provide an upscale yet inviting environment + Manufacturing: supply...
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