Starbucks: Back to Basics?

ICMR HOME | Case Studies Collection

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

To download Starbucks: Back to Basics? case study (Case Code: BSTR307) click on the button below, and select the case from the list of available cases:

Price:

For delivery in electronic format: Rs. 500;
For delivery through courier (within India): Rs. 500 + Rs. 25 for Shipping & Handling Charges

» Business Strategy Case Studies
» Business Strategy Short Case Studies
» View Detailed Pricing Info
» How To Order This Case
» Business Case Studies
» Case Studies by Area
» Case Studies by Industry
» Case Studies by Company

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.

<< Previous

"We [Starbucks] somehow evolved from a culture of entrepreneurship, creativity, and innovation to a culture of, in a way, mediocrity and bureaucracy."¹

- Howard Schultz, CEO, Starbucks, at the shareholders' meeting in March 2008

"The wheels have really come off of this train. It's amazing how fast business has derailed. If sales are down mid-single digits, [then] that is rapid erosion."²

- Larry Miller, Analyst, RBC Capital Markets,³ in April 2008, on Starbucks' weak earnings for the first quarter.

"At some point this [the US] is going to be a mature market. The big question is when does that occur."⁴

- Bill Hulkower, Analyst, Mintel International, in June 2007, on the impending saturation in the US specialty coffee retail market

Introduction

On July 30, 2008, Starbucks Corporation (Starbucks) announced a net loss of US$ 6.7 million, for the quarter ended June 2008⁵.

This translated to a loss of one cent per share, as opposed to a profit of 21 cents per share (with a net profit of US$ 158 million) recorded for the corresponding period in 2007.

This happened despite the fact that the company's net revenue grew 9 percent in the quarter to US$ 2.57 billion.

Starbucks: Back to Basics? - Next Page>>

1] Brad Stone, "Starbucks Plans Return to Its Roots,"www.nytimes.com, March 20, 2008.
2] Lisa Baertlein and Nichola Groom, "Starbucks off the Boil amid US Downturn,"www.brisbanetimes.com, April 25, 2008.
3] RBC Capital Markets is a Premier Investment Bank that provides a set of products and services to institutions, corporations, governments and high net worth clients in 160 countries.
4] "Starbucks Needs a Shot of Caffeine,"www.money.cnn.com, June 8, 2007.
5] The company's fiscal year ends on the Sunday closest to September 30.

Case Studies in Business Strategy Volume VI

Case Study Volumes Collection

Business Strategy
Workbooks Collection