Essay on Starbucks: Forty Years Strong

1318 Words 6 Pages
Critical Thinking – Starbucks Case Study
"Whatever your culture, your values, your guiding principles, you have to take steps to inculcate them in the organization early in its life so that they can guide every decision, every hire, every strategic objective you set” (Schultz & Yang, 2007). That’s exactly what Howard Schultz, CEO of Starbucks, did when he first started with the company in 1982 (“Our Heritage,” 2011). The company’s solid business model of providing more than just a cup of coffee allowed it to flourish for over two decades. Then in 2008, Starbucks’ stock had plummeted and the company’s aggressive growth strategy led to the commoditization of this popular coffeehouse and its products. When Schultz saw this company become a
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However, the need for speed and growth led to weakened customer interaction and commoditization of the Starbucks brand (Koehn et al., 2008). For instance, the art of being a barista was reduced to the basic ability of operating a machine. An external analysis would show that the company had many opportunities that they could take advantage of, such as incorporating the sale of non-beverage items in their stores. Threats to their company included competition from other businesses, such as Dunkin’ Donuts and McDonald’s, who began to capitalize on the sale of specialty coffees. Furthermore, Starbucks touted itself as “socially responsible” and therefore had to set a standard for others as they were under the microscope with skeptics. All of these factors had to interlace with each other in order for the company to rebuild and maintain the strong Starbucks’ brand.
The next part of the process included formulating and implementing a plan for Starbucks to distinguish itself among other coffee companies. Starbucks developed a corporate renewal strategy to address the company’s declining performance and unveiled techniques to enhance the customer experience while building upon its social responsibility efforts. Fundamentally, the focus was centered on the “counter encounter”. Schultz decided to replace the pieces of bulky brewing equipment at the counter to enable employees to fully interact with and get to know their customers (Koehn et al., 2008). This replacement would

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