Starbucks Analysis
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Schultzs strategy is focused on cost cutting. As there were store closures and store openings were also reduced. Moreover he reduced his salary $1.2 million to $10,000 and put up some corporate jets for sale.
Most importantly he emphasized on the fact that company needed to rediscover and revitalize the “Starbucks Experience” and reestablish its connection with the customers. He was also of the view that focus should be maintained on the core products.
However I believe that the measures taken by Schultz are partly satisfying because he is ignoring the fact that market for gourmet coffee has changed greatly over the past decade and the competition is really strong.
As it is also attacked from above and below, so it needs to develop its own market which may be done by giving the same ambience to customers but yet catering to the needs of people and ensuring that services are delivered in a faster way. Although core products should be focused he should not eliminate the noncore products.
As its competitors such as McDonalds are known for its quick services so going back to the Starbucks experience should not mean that it take longer time to serve customers
Starbucks has lost its unique connection with the customers for what it was famous. It has focused on non core products .More over it has lost that ambience which was valued most by customers.
As in February 2009 it planned to start instant coffee which deviated it from its main goal of delivering “Hand made” Coffee made. Due to these factors it lost its class appeal and these actions became harmful for the brand.