JerryBaldwinStarbucks 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 . SWOT Analysis Strenghs: -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 2009Cut thousands of jobs and closed non performing stores -Success mostly due to word of mouth advertising ; shows a positive brand image Weaknesses: -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 -Fourbucks nickname -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 rightOpportunities: > 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 to improve the atmosphere in stores, make them unic. He started by improving the smell in stores. > Meals combination Threats: -SB is not ecofriendly: Waste of water (about 6.
2 million of gallons/day): policy of keeping taps running non-stop to prevent from possible infection> SB is now trying new alternatives to disinfect -Trial with pro union workers.SB accused of discrimination -Ethiopia wants recognition for its high-value speciality coffee beans > landmark deal between SB and the Ethiopian government -Market saturation : increasing numbers of competitors: Caribou Coffee, Peet's Coffee ;amp; Tea, McDonald's -Loss of customers: they became conscious of the price. Whealthiest customers have moved to other coffee chains, smaller and more exclusive. The modest ones have moved to fast-food chains which have improved the quality of their coffee, and cheaper than SB's coffee Bad economic context Main problems: Too many competition in the market, SB is losing market shares Brand image: no longer perceived as an exclusive place. Image similar to big fast food chains ; bad quality service image and high prices Solutions: Inovation to reconect with its customers and to become really different from its competitors because they have no point of differenciation.
To be more ecofriendly and work on its image of a socially responsible company by supporting fair trade that would improve its reputation
