STARBUKCS CORPORATION Harvard Case Solution & Analysis

PROBLEM STATEMET

The problem associated with Starbucks was that it had achieved tremendous growth in a very small amount of time, but the company was not able to manage and sustain its leadership position, when the strategy to open as many stores in the US led to the failure of the company during the 2008 crisis, founding member and former CEO Howard Schultz was asked by the board to retake its former position and derive the company out of new found financial difficulty.

ANALYSIS

SWOT analysis was conducted to evaluate the internal as well as an external factor affecting the company with Strength and Weakness measuring the internal factors and Opportunity and Threat evaluate the external factors.

The SWOT analysis indicated that the company holds a very strong and motivated management but it is focused in a single market making it susceptible to all the market changes where as the market provides veryhigh growth opportunities in the coffee industry with changing desire and increase in need of the coffee everyday but with growing market comes the threat of the competition which includes other companies that provide coffee and other companies that provide alternatives to coffee which are targeting the same market Starbucks is targeting.

The Financial analysis showed that the increased focus on the needs on the customer and making customer satisfaction an important element for the company along with training and development of the employees has led fruitful results for the company with revenue showing an increasing trend from 2008 to the current year with 2013 only showing a moderate result because of a legal settlement of $2.7m, also the company has improved its current ratio, quick ratio and debt to equity ratio showing the company holds adequate assets to pay off its liabilities.

ALTERNATIVES&RECOMMEDNATION

The company needs to focus on the following,

  • REWARD BASED SCHEMES FOR EMPLOYEES
  • INCREASE CUSTOMER SATISFACTION WITH ADDITIONAL SERVICES
  • DIVERSIFY IN OTHER MARKETS (OUTSIDE US)

It is recommended for the company to implement these strategies to be able to increase its customer base.

CASE STUDY REPORT

SUMMARY

Starbucks was glorified with the status of premium roaster and retailer of Coffee around the world, which was not just because of its premium taste of coffee or the use of high quality coffee beans but also because of its leadership strategy, innovation and focus on values.

Starbucks was developed in the Era of 1980s with nearly a 9 store operation in Seattle, Washington but the most remarkable aspect is that drinking coffee in public was not a norm of that Era. Starbucks was able to create a new trend in the beverage business and today it holds 17,400 outlets around the world in more than 55 countries.

The success history of Starbucks holds a dark patch of the 2008 crisis in the United States, which affected many companies around the world, including Starbucks, the company’s sales had massively declined, which led the management to close to 800 stores in the US and around 100 stores around the world forcing a layover of 6,700 employees.

It was during these difficult times company founder and former CEO, Howard Schultz stepped down from the board to retake his position as CEO to lead the company in a direction of prosperous growth.

Schultz operated as a Chief Strategic Officer, and was focused to revitalize the company for which he took multiple initiatives which included,

  • Training programs to motivate employees
  • Setting best practices for the company and sharing them around the world
  • Changing the menu at each store to give it a more refreshing end
  • Making the company and each store more environmentally friendly
  • Introducing integrated softwares for scheduling work hours of employees
  • Focus on innovation and development
  • Finally, focusing to increase its reach around the world by opening new stores.

These strategies created by Schultz created wonders for the company and the company was able to turnaround from its financially difficult position to a finally strong position, which was reflected in the recent financial statements of the company.

ANALYSIS

INTERNAL ANALYSIS OF STARBUCKS CORPORTAION

SWOT ANALYSIS

SWOT analysis is a composition of 4 components describing 4 different aspects of the company, those are Strenght, Weakness, Opportunity and Threats. The Strengths and Weaknesses provide an internal analysis of the company whereas the Opportunity and threats faced by the company provide an external analysis.

there is a high chance he will return for another visit. For that very reason Starbucks pays very high attention to staff motivation and development, it encourages its staff to believe in the company’s vision and adopt its personality. It is because of its highly motivated and skilled staff Starbucks it able to provided premium services to its customerswhich leads to customer retention. This provides the strong impact that the company needs to lead in this market.

WEAKNESSES

DEPENDANCY ON THE US MARKET

One of the biggest flaws in the strategy of Starbucks is that it is highly concentrated in the US market with its core chunk of revenue is attributed to this market, which makes it open to risks as it is not well diversified in multiple markets..................

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