Starbucks: Back to Basics?
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Case Details:
Case Code : BSTR307
Case Length : 18 Pages
Period : 2007-2008
Pub Date : 2009
Teaching Note : Available
Organization : Starbucks Corporation
Industry : Coffee Retailing
Countries : USA, Global
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Please note:
This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.
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Introduction Contd...
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Earlier, Starbucks had announced that it would close down
around 600 of its under-performing stores in the US and nearly all of its stores
in Australia, in addition to cutting about 1,000 non-store jobs6.
Analysts
attributed Starbucks' falling fortunes as much to its rapid expansion that
apparently eroded its competitiveness, as to the worsening US economy, with
falling home prices, rising unemployment, and cash-strapped customers.
The history of Starbucks goes back to 1971 when the first store was opened.
Initially, the stores sold coffee "by the pound".
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After Howard Schultz acquired the company in 1987, Starbucks
started setting up cafés, where customers could sit and sip their favorite
espressos and lattes.
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Schultz was instrumental in the rapid expansion that
the company saw in the 1990s and 2000s.
From being a small-sized company with around 165 stores in the US in
1992, Starbucks became a global behemoth with around 15,000 stores in
more than 40 countries by early 2008.
However, this rapid expansion brought with it some problems.
While
earlier Starbucks cafés were known for their high level of service, with
friendly baristas, by the mid-2000s, they were criticized for their
impersonal service... |
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