What factors accounted for the extraordinary success of Starbucks in the early 1990s? How did VC react to the Starbucks business plan? On the other hand, what was so compelling about the Starbucks value proposition?What brand image did Starbucks develop during this period?
The major factors that accounted for the success of Starbucks in 1990 were the fact that it was one of the most established brands offering specialty coffee. There were no major competitors for the company, which made it a successful firm.
Along with this, the locations captured by the company were also quite visible, attaining high profits, located at ideal locations. Another major success factor for Starbucks in 1990 s was the fact that the company offered convenient coffee with high quality to the customers. It offered high quality goods to the business class specifically.
In addition to this, the company was also selling whole beans coffee and other products to the market. The quality of coffee served at the stores was also top notch and superior than the rivals. Another major or the most integral part which laid success for Starbucks was that it had made itself a player in the market that offered highest level of customer satisfaction. The above mentioned attributes were the major cause of profits and success for Starbucks in the market.
The value proposition of Starbucks is entirely focused upon the brand strategy that comprises of three major components. The most appropriate brand strategy of the company has been captured by the phrase “live coffee”. The phrase has actually reflected the overall importance of keeping the national coffee culture alive. From the perspective of a retailer, the company has created an experience where they have been offering high or optimum quality coffee to the world and they have also controlled the major supply chain.
Along with this, another value proposition of Starbucks has been its method of purchasing coffee beans from those markets that offer optimum quality. The company has maintained its level of quality since the start of the company.
Furthermore, another value proposition for Starbucks has been the element of customer satisfaction. The management of Starbucks has satisfied the needs of the customers to the best of their abilities. Finally, the third major value proposition that has gauged in reasonable profits for the company is the fact that the company offers an ambiance that is unmatched. Starbucks has been offering a sense of friendliness and soothing environment to the customers.
The brand image which Starbucks has been able to pull-off in the market has not necessarily been the best during that period. However, it has been able to attain the highest level of customer satisfaction. The company has been constantly facing a decline in the market share and the brand image simultaneously.
The major focus of the firm in the recent past has been upon expansion and growth. The firm has actually overlooked the element of building brand image during this period. The company has been looking to expand and grow itself in the market by offering its products in all the different locations.
However, in the past, the focus of the company has been on satisfying the customer needs. Since the element of customer satisfaction has been eliminated therefore, the company has been unable to gauge in the number of customers that are satisfied with the products.
Why have Starbucks customer satisfaction scores declined? Has the company’s service declined or is it simply measuring satisfaction the wrong way?
The scores for the level of customer satisfaction started to decline for the company in spite the fact that Starbucks has made reasonable efforts to maintain quality of its products. However, the quality declined for the company because the management did not pay attention to the minute details about the company.
The major reason which led to decrease in customer satisfaction was because the company focused on expansion. Although expansion is a major trait that leads to increased profits, however, it affected Starbucks in a manner where it lost the track of customer satisfaction. Similarly, the service gap increased amongst the company and the customers.Starbucks and Conservation International Case Solution
The management was more concerned with the fact that it did not want to decrease the profits. Moreover, the services offered by Starbucks also declined because of the limited market research. Along with this, the speed and the delivery of order also reduced which made the customer satisfaction decline considerably............................
This is just a sample partial case solution. Please place the order on the website to order your own originally done case solution.
Related Case Solutions & Analyses:
Atlantis Paradise Island Resort and Casino (B): Improving Performance with New Core Values
Immigration Policy in Germany
European Airline Industry, 1993 – 2009: Flying into Turbulence (A)
Foxconn V BYD (B): Strategic Approach to Intellectual Property Management in Emerging Markets
Host Europe: Advancing CSR and Sustainability in a Medium-sized IT Company
Meta Abo Brewery: Creating a Sustainable Value Chain in Ethiopia
Strategy Execution Module 15: Using the Levers of Control to Implement Strategy
When Expertise Becomes a Liability
Psaltry International Ltd: Challenges Refining Cassava Starch in Rural Nigeria
Strategy Execution Module 9: Building a Balanced Scorecard
