Starbucks Case Study Analysis
A CASE STUDY ANALYSIS ON:
A STORY OF GROWTH
-Riddhi Ravishekar Roll no:42
Q:1. In the beginning, how was Starbucks different from other coffee options for coffee drinkers in the United States? What activities and assets did Starbucks leverage to differentiate itself from competitors?
Ans. Starbucks was founded in 1971with an aim to roast and sell great coffee. At that time, coffee consumption in the US was nearly on the decline. Despite competitors like Folgers,Nescafe, Peet’s, By 1982, Starbucks had five retail outlets that sold supplies for brewing coffee at home and also the coffee beans butnot prepared beverages. When Schultz took over, he was determined to establish Starbucks as “the third place” beyond home and work. He wanted to differentiate and create a distinct identity of Starbucks and so was not receptive to the idea of selling prepared drinks. He justified it by saying that getting into the “restaurant business” would distract the company from its core assets and activities: roasting and selling coffee beans. The décor of the stores included earth tones and overstuffed chairs,wood floors and cozy fireplaces that created a home-like feel so that its patrons could linger and relax. La Marzocco machines were put up which added to the distinct taste of the coffee and the Barista that operated the machines stood as an unique attraction. The quasi-Italian lingo included in menu (drinks names and sizes) were very catchy. Starbucks positioned itself as a brand/company offering a “lifestyle product”. The locations were carefully selected where areas with large numbers of wealthy and highly professional workers (“Bobos”) were targeted.
Q:2. When Starbucks was rapidly expanding its store locations in 2006–2009 it made specific changes in order to facilitate that growth. What did Starbucks gain—and give up—as a result of each change?
Ans: During its phase of expansion,
A STORY OF GROWTH
-Riddhi Ravishekar Roll no:42
Q:1. In the beginning, how was Starbucks different from other coffee options for coffee drinkers in the United States? What activities and assets did Starbucks leverage to differentiate itself from competitors?
Ans. Starbucks was founded in 1971with an aim to roast and sell great coffee. At that time, coffee consumption in the US was nearly on the decline. Despite competitors like Folgers,Nescafe, Peet’s, By 1982, Starbucks had five retail outlets that sold supplies for brewing coffee at home and also the coffee beans butnot prepared beverages. When Schultz took over, he was determined to establish Starbucks as “the third place” beyond home and work. He wanted to differentiate and create a distinct identity of Starbucks and so was not receptive to the idea of selling prepared drinks. He justified it by saying that getting into the “restaurant business” would distract the company from its core assets and activities: roasting and selling coffee beans. The décor of the stores included earth tones and overstuffed chairs,wood floors and cozy fireplaces that created a home-like feel so that its patrons could linger and relax. La Marzocco machines were put up which added to the distinct taste of the coffee and the Barista that operated the machines stood as an unique attraction. The quasi-Italian lingo included in menu (drinks names and sizes) were very catchy. Starbucks positioned itself as a brand/company offering a “lifestyle product”. The locations were carefully selected where areas with large numbers of wealthy and highly professional workers (“Bobos”) were targeted.
Q:2. When Starbucks was rapidly expanding its store locations in 2006–2009 it made specific changes in order to facilitate that growth. What did Starbucks gain—and give up—as a result of each change?
Ans: During its phase of expansion,