Starbucks Case Study

Starbucks case study is related to possible reasons for the significant drop in traffic and profits at Starbucks in 2008 and the transformational initiatives, global economic problem, customer retention at the time of recession and other issues. Starbucks is the largest Coffee and Tea retailer in world and known in food and beverage industry type. Starbucks is an international coffee and coffeehouse chain based in Seattle Washington. Mantra case study section try to catch out interesting case study to help students in covering cases and stories hidden behind their name and fame. Starbucks was founded in the year 1971. Starbucks is located at more than 17000 locations in the world.

Starbucks is a major specialty coffee retailer, with presence in over 40 countries around the world. The financial crisis in the United States and the consequent global economic problems, together with rapid expansion in the number of its outlets created serious problems for the giant coffee retailer. With the economy showing signs of a recession, more and more customers started to cut down on consumption of expensive coffee. In addition, the rapid growth in the 2000s had diluted the ‘Starbucks Experience’ and the company’s customers were complaining of falling service quality levels. Moreover, cannibalization of sales as new stores were opened too close to existing outlets also became a serious issue for the company.

The case discusses the possible reasons for the significant drop in traffic and profits at Starbucks in 2008 and the transformational initiatives that Howard Schultz, the founder CEO of the company, implemented to revive the Starbucks brand and bring back customers to its stores.

Issues:

» Understand the efforts needed to transform a commodity like coffee into an ‘experience.’

» Recognize the role of leadership in turnaround management.

» Analyze the strategies undertaken to bring about a transformation in an organization.

» Recognize the need for retention of customers