Essay about Starbucks Case Analysis

1172 Words Oct 22nd, 2012 5 Pages
Subject: Starbucks Case Analysis

Having been through the great expansion and the economic depression, Starbucks has become one of the most valuable brands in the world by its ability to immediately distinguish consumers’ needs and fulfill those needs with extraordinary services. In other words, Howard Schultz has made Starbucks the solution to consumers’ unsatisfied need, which gives the brand a strong positioning that not only benefits the company, but also creates customer value. However, as the rapid expansion goes on and growth opportunities emerge, Starbucks also runs the risk of attenuating its brand equity as a result.

In order to evaluate the acquisition of the coffee equipment company, a situation analysis is
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The fact that Starbucks hasn’t committed to its brand mantra has caused customers to shift. Its current customers who favor speed and convenience don’t fit the brand mantra (Keller, 2012), which used to satisfy those customers who came for the experience of Starbucks. Its customers are different, but not unique as they can be satisfied with Dunkin Donuts or McDonalds just as easily. Thus, the customers who were loyal to Starbucks have turned to its competitors. Moreover, Starbucks tends to appeal to all customers by tapping into instant coffee and single-served coffee categories. This strategy boosted the short-term sales, but diluted the brand equity in the long-term. Starbucks has been trying to attract all customers by increasing the point-of-parities to take part in various categories while jeopardizing the point-of-differences at the same time (Keller, 2012).
Starbucks should not only think about who are its most beneficial customers that fit its brand mantra, but also figure out whether it’s the tangible product or intangible service it is selling when evaluating the acquisition of the coffee equipment company. Drip coffee is a new category that Starbucks wants to enter in order to draw drip coffee drinkers and bring quality and aroma back to stores. Moreover, Clover machine was expected to help Starbucks differentiate from competitors and aid the brand association in customers’ mindset. However, in light of the experience of brand

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