Starbucks Case Analysis

509 WordsDec 2, 20133 Pages
1. When Howard Schultz took over Starbucks in 1992 many people were skeptical about his business model. His plan was to sell coffee, catered to “affluent, well-educated, white collar patrons (skewed female) between the ages of 25 and 44.” By 1992 the company had 140 stores and was effectively competing against other small coffee chain stores. The skepticism began when Schultz began to take the company public. At that time in America, no one was really drinking coffee and if you did drink coffee you could get it for much cheaper than what Starbucks was asking you to pay for it. Schultz decided to push forward and thus Starbucks’ success was born. Their achievement was probably due to a lot of their positioning and the type of customer they were targeting. They got into very granulate detail about how they wanted their main customer base to be this select “affluent, well-educated, white collar patrons (skewed female) between the ages of 25 and 44.” With that, they were able to strategically place stores and cater to this very specific group of people. They crafted specific “specialty” drinks to the typical tastes of the populaces that fit this precise category. This directly contributed to Starbucks’ initial success. 2. As Starbucks became more and more successful a big change occurred from the original plan of the company. Many costumers began to realize that the people who ran the company started to care more about the capital than they do of the customers. The customer base also began to change, instead of it being the “affluent, well-educated, white collar patrons (skewed female) between the ages of 25 and 44”, it expanded to the “younger, less well-educated, and in a lower income bracket than Starbucks’ original customers.” The company decided to make a lot of changes to each particular store. They put in a lot of effort in order to cut down service time to a 3

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