Case_Discussions_–_Starbucks

Starbucks is one of the largest chains of coffee shops in the world. What began as a little shop in Seattle has turned into more than a house hold name; it’s a name that everyone everywhere can associate with. Even if you have never stepped foot in a store, or don’t drink coffee at all you know the name. Starbucks has spread into global markets in the last few years, and with its U.S. ventures has been received very well, even in cities that weren’t forecasted to have open arms for the corporate giant. Up until recently, it was on the fastest-growing brands in annual Business Week surveys of the top 100 global brands. On Wall Street, Starbucks was one of the last great growth stories. Even the thirst of loyalists for high-price coffee cannot be taken for granted. Consumer spending tanked in the downturn, and those $3 lattes were an easy place for people on a budget to cut back. Starbucks can maintain a tight grip on its image because most stores are company-owned. Although, the company has expanded enormously, since it went public in 1991 but has also encountered a number of problems. Starbucks did not have much competition like Mc Donald’s and its new McCafes and the likes in the initial days but now they have competitors such as Tully’s coffee shop. They also had problems of employees’ discontentment. The expensive and aggressive marketing strategy has given Starbucks market dominancy. They earn $181.2 million in the year 2000, sales were still growing but it started growing in a decreasing rate, because their aggressive strategy and attitude towards competitors not only they grew rivalry with local business people but they lost customers. It was difficult for them to maintain their growth of 20% only on domestic market. So, they opted for going overseas. They maintain some aggressive attitude in other countries also. The largest overseas market of Starbucks was in Japan when they had 368 shops, UK was their second largest overseas market, and by the end of 2001 they started operation in the Middle East. They want to have 10,000 outlets abroad by next three years. Starbucks continues to try changes; it announces expansion of a high-speed wireless interest’s service to about 1, 2000 Starbucks locations in North America and Europe. Starbucks executives hope such innovations will help surmount their toughest challenge in the home market; attracting the next generation of customers. Younger coffee drinkers really feel uncomfortable in the stores. There really is nowhere for the company to go but up, especially at this time, Starbucks survived the recession, and along with a few other businesses all across the world they are holding their heads high, saying we are still here and ready to serve you.