CASE - Starbucks-Going Global Fast
Review the case on Starbucks
Starbucks became a market leader by scaling its store concept. It was able to create and execute worldclass processes and to expand its product lines. At some point, however, its rapid expansion began to endanger the health of the company. The question for Starbucks became whether it could maintain its historic growth rate after saturating the domestic market.
In 2009, Schultz proposed a new strategy for viewing growth: "fewer, better stores reaching more customers."
In 2010, as the company seemed to be coming out of the woods, Schultz reflected:
We have fundamentally transformed Starbucks over the last two years...We've reframed the way we work and think to create a new kind of company...We will invest in our partners to ensure world- class customer service and bring relevant innovation to market, all while demonstrating a social conscience and remaining true to our core values.
Schultz pondered his options for future growth. He had read about a framework he liked, which categorized growth options into four buckets: improvements, innovations, scaling, and strategic acquisitions.
He knew the key to high growth was scaling unless Starbucks made a big acquisition. Should he learn from McDonald's, which recently stated that its goal was no longer to get bigger but rather to get better? Should Starbucks consider franchising? Should it scale its Seattle's Best brand through store openings? Should Starbucks compete with consumer products companies and distribute cheaper coffee in grocery stores? Should it create and scale tea shops? Should it create and scale other food and beverage concepts?
What should Schultz do?
Assessment:
1. How has Starbucks grown their business?
2. What led to Starbucks' challenges? What mistakes did Starbucks make?
3. How do you recommend Starbucks move forward? What needs to be done?
4. What are the key difficulties with the "path forward" you recommend?
Assignment:
a) Answer the four assessment questions in the discussions forum in about 100 words each.
b) In about 100 words, discuss how Starbucks might be able to pursue growth through innovation (using videos in the self-study materials).
Videos link:
https://www.youtube.com/watch?v=rZU0tv6OMI4
https://www.youtube.com/watch?v=rtSqlfZgnm4
https://www.youtube.com/watch?v=yVgxZnRT54E.
Attachment:- Case.rar