Case Study About Starbuck

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MNGT 220 Workshop: Thursday 4-6pm Team D: Starbucks Written Summary: “Why Starbucks was initially successful and how customers ‘hire’ coffee shops to do different jobs”. Starbucks was created in 1971 in Seattle and since then has been leading the way in coffee retailer, remaining the global market leader with 18,000 stores in 60 countries. Starbucks success has been so magnified due to essentially being in the right place at the right time. In the USA in the 1970’s, Starbucks CEO Howard Shultz realised the popularity of the experience of coffee and that ‘coffee brought people together’. The main contributor to the Starbucks success story is the creation of The Starbucks Experience. This encapsulated the idea of Starbucks being the third place aside from home and work alongside the added-value of Wi-Fi in most stores. The experience consisted of high quality coffee, ‘partner’ involvement, community relationships, the stores themselves due to being designed according to local culture and finally, the location of all stores. Until the early 2000’s no other coffee brand could match the differentiation or strength of the Starbucks brand, combined with the continually diversification of the beverage menu, ensuring there was always a new innovation drink in order to entice another market segment. The most successful product launch being the Frappucino in 2000; this allowed Starbucks to enter a completely different market than just coffee lovers, targeting younger customers. Whilst also tapping into the bottled drinks market and creating VIA; Starbucks’ first instant coffee ranges. The constant innovation from Starbucks allowed them to constantly obtain a competitive advantage and keep their market leader position through a strategy of differentiation; customers were willing to pay extra for higher quality and personalisation. The main ‘jobs’ customers hired

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