Starbucks Case Study
To: Mr. Howard Schultz, Starbucks Corp.
Date: Spring 1997
Problem Statement: Continue to expand Starbucks brand and market penetration throughout the world, without sacrificing brand quality, product quality or the high quality experience Starbucks values for its customers.
Vision for the Company: To be the world’s best, most respected and desired purchaser and seller of coffee and coffee products.
Mission for the Company: We will hire and train enthusiastic and eager people to serve to our customers. We will maintain the highest quality standards from our suppliers, and in turn treat them fairly and ethically. We will offer people a unique coffee experience that no other retailer will be able to duplicate, while providing superior coffee products and services.
Strategic Options:
Expand North American operations. A wide majority of coffee is still consumed from home, so it is in Starbucks’ best interests to pursue that market to increase brand loyalty and exposure to people who are not currently Starbucks regular customers. This can be done by:
Increased penetrations into the grocery chain market
Increased focus and marketing on ready-to-drink beverages
Expand into Europe. Europeans are far larger coffee consumers than North Americans. Being also more densely populated, the European market is ripe for Starbucks expansion. The company already has successfully penetrated most major North American cities. The same business model could be transferred to Europe.
As Starbucks recovers the cost of opening a new store within 3 – 4 years, this expansion can be done with borrowed capital, as repayment would be quick. This would allow for rapid expansion and quick market penetration.
The strong property development model used in North America should be exported to Europe. With the same large cities and dense populations, the model would be an effective way to find and establish new store locations.
The dense European population density would mean easier
Date: Spring 1997
Problem Statement: Continue to expand Starbucks brand and market penetration throughout the world, without sacrificing brand quality, product quality or the high quality experience Starbucks values for its customers.
Vision for the Company: To be the world’s best, most respected and desired purchaser and seller of coffee and coffee products.
Mission for the Company: We will hire and train enthusiastic and eager people to serve to our customers. We will maintain the highest quality standards from our suppliers, and in turn treat them fairly and ethically. We will offer people a unique coffee experience that no other retailer will be able to duplicate, while providing superior coffee products and services.
Strategic Options:
Expand North American operations. A wide majority of coffee is still consumed from home, so it is in Starbucks’ best interests to pursue that market to increase brand loyalty and exposure to people who are not currently Starbucks regular customers. This can be done by:
Increased penetrations into the grocery chain market
Increased focus and marketing on ready-to-drink beverages
Expand into Europe. Europeans are far larger coffee consumers than North Americans. Being also more densely populated, the European market is ripe for Starbucks expansion. The company already has successfully penetrated most major North American cities. The same business model could be transferred to Europe.
As Starbucks recovers the cost of opening a new store within 3 – 4 years, this expansion can be done with borrowed capital, as repayment would be quick. This would allow for rapid expansion and quick market penetration.
The strong property development model used in North America should be exported to Europe. With the same large cities and dense populations, the model would be an effective way to find and establish new store locations.
The dense European population density would mean easier