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Agenda
Every beginning has an end Morpheus (Matrix)
Starbucks positioning
A) Who is drinking Starbucks: premium segment B) The value proposition: the promise & what is being delivered
Assumptions: analysis
A) Customer service: is going down? B) Starbucks Growth-strategy: until 2008, crisis and current
A B
Recommendations & Further questions
Urbanization The rise of the middle class Ageing Population Female spending power Individualism & Single household Lifestyle changes
Source: Nestl Investor Seminar 2008 (Premiumization)
Growth in education
Sterile, cookie-cutter" store environments, they have lost the coffee aroma
Quality of service and personal touch have declined
What do you like the least about the Starbucks in-store experience?
Source: www.customerthink.com
When you are growing, your focus is on growing rapidly and you tend to be opportunistic about growth
7 New Stores a day - Goal of 30,000 stores worldwide Resulted in decreased profit Brand dilution 900 stores closing in 2008
What about the global crisis? There might be an amplifying effect - No causality
Source: es.finance.yahoo.com
New strategy:
- Expanding the number of foreign stores with business partners to share risk & costs - Expand in areas where historically succesful - Expansion with less upfront investment efficient way of boosting sales - Exception China & India
FOCUS FOCUS FOCUS New Strategy working? Share price goes up, future will tell
Recommendations
The great thing in the world is not so much where we stand, as in what direction we are moving Oliver Wendell H.
Centralize Marketing and closely tie it to the strategy (CEO involvement) Monitor what the customer wants in order to avoid gaps between what is delivered and what is perceived Deal with increasing local competition Communicate what makes Starbucks different Consistently deliver on what is promised Monitor and evaluate service
Further questions
O traveler, there is no path. Paths are made by walking. Antonio Machado
How are the sales in other channels related to the performance of the Starbucks retail? Analyze whether there is a different perception of Starbuck in divers local markets Global strategy with local characteristics? Is the American coffee-way-of-living working in all countries? Is the customer worlwide educated in the same way? Does the customer values the same thing in different countries?
When is a market saturated? Is Starbuck opening new stores in strategic locations? What drives Starbucks to open new stores?