The Starbucks experience

I’m currently sat in a Starbucks coffee shop enjoying a nice coffee and making use of their wifi. It’s got me thinking about the Starbucks phenomena and what strategy they have adopted in terms of growing their business.

CoffeeIt’s an interesting approach and whilst it undoubtedly has been very successful there are commentators that would argue that Starbucks is caught between various approaches.

There are numerous areas of the syllabus which we can link with Starbucks.

To the man on the street, when Starbucks first opened it was different and arguably felt like a very “differentiated approach” (Porter’s generic strategies) to drinking coffee. It served great coffee in a relaxed atmosphere. Good music was played and it felt like a special treat to drink coffee in a select coffee shop.

Their growth plans largely involved a classic market expansion whereby they expanded an existing product into new markets. There are now over 15,000 stores in nearly 50 countries.

They have however had some problems. Last year, they announced that they would close 300 underperforming stores in addition to the 600 closures they announced the year before.

Some people have argued that the expansion of Starbucks resulted in it feeling less “special” and as a result consumers were less willing to pay a premium price for what many felt was a standard product. Was it a case of over-expansion? One memorable headline in the US magazine “The Onion” joked that “New Starbucks Opens in Rest Room of Existing Starbucks”!

Whatever the outcome of their strategy, one thing for sure is that their coffee is nice but not quite as nice as their muffins!

Would you be able to remember all these meals?

A lot of the readers of this blog are either studying finance or working in a finance job. A lot of you no doubt enjoy[..]

Can a bottle of Coke save a child's life?

Coca-Cola is one of the worlds’s largest companies and is certainly one of the best known global brands. The company is good at lots of[..]

You are (probably) a liar...

Here’s a nice ethical question for you – have you lied recently? My guess is that you have. Now before you get all righteous about[..]

Zooming in...

At the start of the year zoom calls were relatively uncommon. Now though, with the global pandemic, they are a common feature of business life[..]

I'll stick to that...

New product innovation is vital for lots of organisations. Sometimes though the idea for a new product can come from unusual places. VELCRO is a[..]

Out of this world advertising...

Getting professional photos taken for advertising can be expensive but this particular photo shoot for Estee Lauder is expensive. Very expensive in fact. 4 hours[..]

An Apple for 100 Companies..

Whilst a lot of companies around the world are struggling or going out of business due to the Covid-19 pandemic, some are doing very well.[..]