Starbucks Case Study April 2012

Mashaeel Qurban (2593426)

Starbucks case study April 2012

Starbucks strategy based on developing “a kind of third place” where people can relax, enjoy, read or communicate with drinking a cup of hand made fresh coffee. Focusing on the people business by serving great coffee with the addition of Wi-Fi to make Starbucks store a place to work as well as to social, this was and still a good strategy for Starbucks to build a relationship with the customers. In addition, involving Starbucks employee to attract and recuing customers to achieve their loyalty and their sense of belonging for Starbucks stores, is a reason of making Starbucks different kind of company. Moreover, listening to the people needs and adapting with the changes in the customer life style, that what makes Starbucks on the right track. However, currently they changed their strategy which is the aggressive expanding locally and internationally. I think it is not the best strategy in this time but it could work in the future. There are some concerns that Starbucks should be aware to them, and must to take some steps to fix them. First, Starbucks are facing strong competition from the other companies such as, MacDonald’s (McCoffee) which made Starbucks little late in terms of the consumer demands. Second, coffee making is being expensive for Starbucks because of the increasing on the costs as a result of the higher costs of the external suppliers, and that would increase the consumer costs or decrease Starbucks profits. Third, Starbucks focusing in growth strategy and that made it difficult to provide high quality products and meet customers’ expectations of service worldwide.  I think the third one is the most risky, so my recommendations are, to refocus on the product value and differentiation strategy rather than expanding. Also, they can hire an internal strategic marketing team to allow Starbucks to receive feedback of people satisfaction.