Starbucks case study.docx - Trouble Brews at Starbuck Chelsea Raney MRKT5500 September 18th 2019 Situational Analysis The article “Trouble Brews at

Starbucks case study.docx - Trouble Brews at Starbuck...

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Trouble Brews at Starbuck Chelsea Raney MRKT5500 September 18 th , 2019
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Situational Analysis The article “Trouble Brews at Starbucks” written by Lauranne Buchanan and Carolyn J. Simmons takes a look at the beginning and growth of the coffee shop chain. Despite their many successes, in 2007, the company saw a drastic drop in stock prices and customer visits. This article digs into how this happened to such a successful company. In the early 1970’s, Starbucks was a small company located in Seattle run by a group of men who wanted a simple coffee shop. The owners made every effort to make a good simple cup of fine coffee. Howard Schultz came across this simple company, fell in love with the idea of “fine” coffee, yet knew it could be more. However, once he secured a job at Starbucks, the owners did not share the same proud ambitions as Howard. After a visit to Milan and experiencing what coffee meant to Italians, Schultz saw Starbucks could be a place for people to enjoy their coffee as well as a place where they could stay and socialize. When Schultz could not change the owners’ focus, he left and started his own company. Soon after Schultz opened his own stores, the Starbucks owners decided to sell and Schultz bought it. The very next year, in 1988, fifteen more Starbucks stores opened; the company saw sharp growth. Throughout all of this growth, Schultz held on to control by handling the coffee from purchase to cup sold in his stores. He grew his customer base by creating what he called a “third place.” A culture with a focus on the customer and the customer experience was adopted - not just for external customers, but also for his internal customers, and his employees.
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After the company went public, the focus shifted to other products, such as Frappuccino’s and food items – first bakery goods, then breakfast, and even expanded to cold lunches. The company continued to grow and expand into new territories – even working with Pepsi to bottle its Frappuccino. With the rapid additions of new stores, it became clear that locating stores near
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