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AGENDA
Synoptic View
Introduction
Starbuck Competition
Problems faced
Back to Basic Q & A Conclusion
Brand
2000- Number of outlets rose to 2200 and Schultz stepped down
STARBUCKS COMPETITION
MCDONALDS Sold coffee at 60-80 cents lower than Starbucks DUNKIN DOUGHNUTS: Sold coffee at rates lower than Starbucks HARD ROCK CAFE
Impersonal service
High Input Cost Image Conflict Change in Leadership
Transformational Agenda
Five main initiatives:First initiative was introduction of Mastrena, semi automatic espresso machine Second initiative was complete renovation of brewed coffee in store. Third was introduction of loyalty program that would reward registered card holders. Fourth was launch of mystarbucksidea.com, an online community. Fifth was to strengthen relationship with Conservation International (CI).
Examine the strategies that an established player can adopt in a mature market
SPECIALIZE / SUBNICHE
FEATURE
PRICE
PROMOTION
Even though the upper middle class has been affected by recession, the higher income upper class maintained their loyalty towards the brands. Moreover, the luxury brands preserved their high investments at the time of recession, thus providing a creative leadership and protecting their image as a luxury product.
Increasing Competition
Changing Perception
70
60 50 40 30 20 10 0 2000 53 48
61
55
Starbucks cares primarily about making Money Starbucks cares primarily about building more Stores
2001
Dissatisfied Customers
Starbucks was not meeting expectations in terms of Customer Satisfaction and there was a direct link between Satisfaction and Customer Loyalty
Increasing Competition
Though Starbucks is still a dominating chain but its hold on coffee has loosened. Facing Competition not from newcomers but from older coffee chains that have increasing customer loyalty. Another threat are the established food chains that have altered their focus to incorporate the rising trend of coffee.