Starbucks Essay

810 WordsNov 8, 20114 Pages
Between 2004 and 2007, customer perception of Starbucks was changing. Perhaps one reason was that the customer demographic became younger with a lower income and was arguably more price conscious. This may be related to the planned rapid expansion that, in turn, increased the customer base. The Starbucks culture of each store being a customer destination was now being threatened by consumers wanting quick convenience. In combination with this, there was a noticeable shift in the competitive environment with companies such as McDonald’s and Dunkin’ Donuts making concerted efforts to enter into the fine brewed coffee market, and were perfectly willing to offer a similar beverage at a lower price. Beyond the control of Starbucks, was the general economic downturn of the global economy in 2007-2008. Long-term investors that would have purchased company stock on the first day of trading in 1992 for $21 a share, were faced with the reality of losing approximately 15 percent of their initial investment if they had held onto the shares by the end of 2007. All of the money that the company had invested into its strategy of global expansion had not yet had any beneficial effect on the company bottom line. Major conclusions drawn from analysis By the end of the case, it would seem that Starbucks had a shift in its marketing management philosophy, from being market orientated to becoming more product orientated. The satisfaction of customer wants and needs, while still meeting organizational objectives, seems to have been replaced by a focus on the internal capabilities of the company with respect to what products could be produced and how many stores could be built. There is no doubt that this shift was driven by several factors, including the rapid expansion in the number of stores globally, increasing competition, the decline in the global economy, changing

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