Starbucks Case Study Analysis Essay

1152 Words Feb 28th, 2014 5 Pages


-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
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By 1996, It had opened about1,000 stores. By 2001, The count stood at 5,000 stores. In 2007, It was operating about 15,000 stores. This move resulted in a mixed bag of reactions and consequences. Schultz remained undeterred by critics and revealed that in the course of time, Starbucks and its customers realised that their coffee was found filling a need that customers themselves didn’t know that they had. In line with the expansion, a few changes were brought into place.
1. Operational Changes included the replacement of the La Marzocco machines with Push-Button Verismo machines.
Simplified the hiring and training of Baristas
Reduction in time to pull an espresso shot from 60 to 30 secs.
Uniform product CONS:
The grinding apparatus blocked the customer’s view of the barista
Simplicity eliminated the romance and theatre.
Lack of customization.
Longtime customers believed the quality was inferior.
2. Another change involved the coffee beans. Delivering a consistent flavour required that there be a central system of roasting the beans and then global distribution.However, measuring and grinding each time was time consuming and hampered the 3min service goal. So it stopped shipping the coffee beans to be ground and instead shipped air-tight packs of pre-ground beans.
Time saved
Service Goal was achieved. CONS:
“Skimped on quality”

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