A Case study

of Starbucks
Corporation
Cyrene mae estrada

This Photo by Unknown author is licensed under CC BY-SA.

VIEW POINT

• In the view point of the Starbucks CEO

Mr. Howard Schultz

This Photo by Unknown author is licensed under CC BY-SA.

TIME CONTEXT
JANUARY 2008
TIME CONTEXT and STATEMENT OF THE
PROBLEM
• MARCH 2008 the company took a hit during the economic slowdown
of 2008 as customers opted for cheaper options for their everyday
coffee. Starbucks was forced to shut 600 shops that were not making
profits. By March 30, 2008, its profit had fallen 28 per cent compared
to the same period in 2007. In 2009, it closed another 300 stores and
laid off 6,700 employees.
• Starbucks also faced competition from McDonald's, which had, in
2008, started setting up coffee bars that sold espresso.
STRENGHTS
• GLOBAL RECOGNITION • VISIONARY LEADER
• QUALITY PRODUCTS • STRONG FINANCIAL
• COMFORTABLE AMBIANCE FOUNDATION
• COMPETENT WORK FORCE • GOOD COFFEE
WEAKNESSES
• CEO TURNOVER • HIGHER PRODUCTION COST
• The previous leadership had • Under Trained employees
blamed the economy and the • HIGH PRICE
higher cost of dairy products for
the slump in business. They had • INCONSISTENCY
also stated this as a reason to
hike prices.
OPPORTUNITIES
• New Technology in buying • New Market Opportunities
across the world
• New product line • widen their market

• More Flavors to acquire

THREATS
• AGGRESSIVE COMPETITORS • Image Threat
➢Mcdonalds ➢Anti-Starbucks group {NGAC}
➢Dunkin Donut
➢Smaller privately owned Coffee • CUSTOMER STANDARD
houses DIFFER PER STATE
• UNION
➢Petition for salary increase • Economic Recession
➢etc
ALTERNATIVE COURSES OF ACTION
• The company must shift its focus
away from bureaucracy and back
to customers."
• Reigniting the emotional
attachment with customers.
• Starbucks had to rebuild its
customer relationships and show
the world that it cared for
quality and consistency.
• Create an environment where
employees could think freely
about the organization and
contribute in terms of strategies
and ideas.
• Intensive training of employees
• Mobile Apps
CONCLUSIONS & RECOMMENDATIONS
• The crisis at Starbucks was as much the result of the economic
recession as due to the expansion of the store network in the
previous years. To reconnect with its customers, Starbucks used social
media to engage individual customers with its products and brand.
• if customization slows down in-store processes, such initiative can be
unsuccessful. So Starbucks integrated 'customization' into its existing
processes. While in the past, Starbucks, as well as other companies,
have implemented social media activities, it remains challenging for
many to understand the effectiveness of individual social media
activities.