Starbucks Case 2008

Starbucks- Early 2008

Andrew Stober 300175646

Intro:

Founded in Seattle, 1971, Starbucks was the brainchild of Jerry Baldwin, Zev Siegl and Gordon Bowker .

Their philosophy was simple, they put customers first and made them feel important and welcomed. They put great effort in emphasizing their support and focus towards the environment and ethical business practices. They were able to create a huge brand image without engaging in a massive marketing campaign. Word quickly spread about their premium cafe products, great customer service, and environmental standpoint.

The high quality environment and premium coffee products offered at Starbucks allowed them to charge much more for a cup of coffee than what was typically expected.

Recommendations:

If you take a look at Starbucks' business model, you can understand how they grew to the size they are today.

One of the most highly valued and easily overlooked aspects of a purchase experience, is the social side to it. People need to feel important and valued, and they are oftentimes more lenient regarding products prices if they feel genuinely welcomed.

This all comes down to employee training. Starbucks should continue to emphasize and focus on superior employee training when it comes to dealing with customers.

When you boil it all down, it's not the products which make Starbucks' unique, it's the buying experience. Competitors can easily replicate great tasting gourmet coffee, we've seen this with McDonalds when they introduced their new 'McCafe'. However, the ambiance, atmosphere and great employee training offered by Starbucks, where people feel welcomed and important is what differentiates them from their competition.

The bottom line is that it's really the element of human connection between employees and customers which gives Starbucks' their unique feel and experience. Starbucks' needs to stay pure to their roots, and continue to put an emphasis on employee training and maintaining that human connection, because I believe, that in the end, it's the main driving force behind people deciding to choose Starbucks instead of another gourmet cafe.

Discussion Questions:

What is Starbuck's product?

Starbucks specializes in selling coffee products. They offer more than 30 blends and single-origin coffees, handcrafted espresso and blended beverages, teas, bottled Frappuccino drinks, and Starbucks DoubleShot.

They also offer home espresso machines, coffee brewers, baked pastries, sandwiches, salads and a reloadable Starbucks Card.

What advantages does McDonald's have in competing with Starbucks for coffee sales?

McDonald's is an already established chain, they are able to diversify their product line quite easily without absorbing too much risk, McDonald's has a lot of money to throw around.

McDonald's began emphasizing the quality of their coffee products, which directly correlates and competes against Starbucks'

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