Starbucks Success

761 Words 4 Pages
Success and complexities: This was a break through and the drink became extremely popular. The number of customers increased in summers and this drink became a major contributor to the overall sales of Starbucks. In April 1995, in all 550 Starbucks stores Frappuccino was first offered.
Transformational Change: Seeing the success of Starbucks, many other fast food restaurants started getting into the coffee business. Starbucks started facing immense competitions. To stay in the competition, Starbucks changed its concept of Italian café. To make Starbucks a socializing place in US, the structure of the store was redone. The area of the store was increased and more comfortable seating arrangements were done. The atmosphere was made more soothing
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For example they introduced nice looking coffee cups, which bears Starbucks logo. This cup was made up of material, which prevents the hands from burning. This little innovation came at a very little extra price to customers.
Success and complexities: Starbucks was able to do its promotion through these cups because whether the customer will later use those cups for Starbucks coffee or not, it will always bear the logo of Starbucks which will do its promotion.
Transformational Change: In 1996, Schultz decided to expand the business of Starbucks outside the United States. Japan was the first country where a Starbucks store was opened outside US. Expansions were done in other countries as well such as Singapore, UK, China, Taiwan etc.
Success and complexities: The financials of Starbucks kept growing continuously and at a very fast pace. Expansions were very crucial for the business to sustain among its rivals. Popularity of Starbucks also grew exponentially.
Transformational Change: Starbucks start adding new items in the menu to compete against fast food restaurants. In introduced sandwiches to their list.
Success and complexities: In China, this model did not work. They had to introduce a range of other snacks and food in their menu to sustain their business in Taiwan and
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He took stringent measures like shutting down its 900 stores in the year 2008 and 2009. He took feedbacks of customers and employees on the Internet, which aimed to improvement of the coffee houses. Some ideas were even implemented. This resulted in improved services and quality.
Transformational Change: Between 2007 and 2008, Starbucks started facing losses due to very high operational costs and the revenues were declining. Because of the high procurement cost of high quality coffee beans and the supply chain expenses, the net profit of Starbucks kept decreasing continuously. Starbucks come up with a plan, which reorganized the supply chain of Starbucks significantly. The complex structure that was laid initially was broken down to simple, smaller modules. Another factor that increased the cost of supply chain was its outsourcing.
Success and complexities: When the complex structure was broken down into smaller units, each unit was defined to look after a particular function. I.e. the production unit will look ways to improve the production efficiency; delivery unit will look after transportation and distribution etc. Starbucks also acquired many coffee roasting plans and distribution centers at various levels of supply chain, which resulted in reducing costs and improving the

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