Starbucks Case Questions
Chapter 3 Starbucks Case
I. Answer the following two questions:
1. Assume now you are in the context of what is described in the case, how can you challenge Schultz’s business model? Justify your argument. (10 pts)
Howard Schultz actually has a really good business plan in our opinion, one that is actually very difficult to find an aspect to challenge. Any problem that has risen with it, Schultz has taken the necessary steps to correct it. For example, when the finances of the company as well as the massive growth were getting to be too much to handle, Schultz took the company public and listed its stock on NASDAQ. When growth began to slow Schultz’s stepped back into the chief executive spot. Some said it was because of rapid expansion and oversaturation. He made menu cuts, closed the least profitable stores, and focused on getting the company back to what led to its success in the first place. He also knew that international expansion was very crucial to the recovery of Starbucks. The only aspect that wasn’t really focused on as much as the competition was advertisement, but they really didn’t need to. It would have been unnecessary expenses since popularity skyrocketed due to word of mouth. Shultz also has incredible employee benefits that allows for good employee morale as well as employee retention. He offered health-care coverage that included part-time workers with as little as 20 hours a week as well as also covering employees who had terminal illnesses, paying full medical costs until they were covered by government programs. He also introduced a stock option plan for everyone, including part-timers had been with the company at least six months which made employees partners.
2. What are the limits to Starbucks’s growth in your mind? Justify your argument. (5 pts)
There are several limits to the growth of Starbucks, such as rising coffee prices, over-saturation/expansion, and over-extended product lines.
Rising coffee prices are not just a limitation
I. Answer the following two questions:
1. Assume now you are in the context of what is described in the case, how can you challenge Schultz’s business model? Justify your argument. (10 pts)
Howard Schultz actually has a really good business plan in our opinion, one that is actually very difficult to find an aspect to challenge. Any problem that has risen with it, Schultz has taken the necessary steps to correct it. For example, when the finances of the company as well as the massive growth were getting to be too much to handle, Schultz took the company public and listed its stock on NASDAQ. When growth began to slow Schultz’s stepped back into the chief executive spot. Some said it was because of rapid expansion and oversaturation. He made menu cuts, closed the least profitable stores, and focused on getting the company back to what led to its success in the first place. He also knew that international expansion was very crucial to the recovery of Starbucks. The only aspect that wasn’t really focused on as much as the competition was advertisement, but they really didn’t need to. It would have been unnecessary expenses since popularity skyrocketed due to word of mouth. Shultz also has incredible employee benefits that allows for good employee morale as well as employee retention. He offered health-care coverage that included part-time workers with as little as 20 hours a week as well as also covering employees who had terminal illnesses, paying full medical costs until they were covered by government programs. He also introduced a stock option plan for everyone, including part-timers had been with the company at least six months which made employees partners.
2. What are the limits to Starbucks’s growth in your mind? Justify your argument. (5 pts)
There are several limits to the growth of Starbucks, such as rising coffee prices, over-saturation/expansion, and over-extended product lines.
Rising coffee prices are not just a limitation