Starbucks Essay

668 Words3 Pages
After reviewing the case I believe there are some possible alternatives to fix the Starbucks situation. * Instead of Mystery shopper program they should have real customers to grade their services * Active and aggressive advertising as well as an intensive image campaign accomplished through a drastic increase in marketing expenses characterise this option. * Starbucks could introduce new healthier products or emphasise the quality of existing ones. Furthermore, Starbucks could start to aggressively fight attempts in the media and to portray the company as a asocial symbol for free-market capitalism. * Investing 40 million per year to increase labor hours per store. This solution does not appear as the best way to fix Starbucks’ problems. As we clearly saw from the exhibits provided with the case, there are some more important issues for customers than fast service. In the long run, company will get into another downturn without more complex changes, than simply add 20 hours of work a week in every store. Besides that, I believe Starbucks customers are linked to the company because of its unique style created by Howard Shultz. Speeding up service could help increasing market share, but it is not the most important issue faced by Starbucks. * The company could lower prices for its products. This solution should bring more new customers to Starbucks, but with profitability around 6% in 2002 (according to exhibit 1) every change of lowering the price will implement more variable costs and fixed costs to reach similar revenue, so it means the net profit will be lower even with similar amount of revenue. This move would also lead to lose Starbucks’ customers, who have been willing to pay more for coffee because of its premium kind. * Starbucks would increase prices of its products to receive more money to be spent for speeding up the service

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