Starbucks‘ main problem is that the expansion of the company was not under control and therefore Starbucks has not to be able to manage and cut the rapid growth. The cost of the commodities and food is much higher now than in the past theerby increasing the price of the Starbucks products. But according to the CEO, the main problem is that the company got worse because of its corporate image and identity. The truth still remains that the strength of the firm has been always represented by a strong brand quality. Unfortunately, Starbucks started losing their brand quality due to their changes in terms of quality, and vision that were their initial strengths.
Starbucks went through a bit of an Identity crisis. For example, one of the CEO’s critics is that, coffee machines are used in order to increase efficiency and save time. On the other hand, they are not able to transmit to the customer the real Italian coffee experience based on stimuli and tradition. In addition, the food available at the store and its smell overtake the aroma and flavors of the coffee.
Helmore (2008), Starbucks’ famous firm which invented the coffee diffusion all over the word is facing some problem in conserving its brand quality. Starbucks has evolved from a vision and philosophy characterized by innovation and creativity to an approach based on bureaucracy without stimuli. Furthermore the company has been affected by many competitors such as Costa and Cafe Nero and McDonald. For example, McDonald has achieved in improving its coffee credibility and reputation.
According to the CEO, the company is a victim of the overexpansion. He then suggested that the solution to overtake the crisis is not represented by a new business strategy. The company only needs to focus again on passion, love and inspiration. Originally, when Schultz was managing the company, its goal was to make coffee a unique experience and the store was a kind of place between home and work.
First of all, the company needs to invest in people, influence its employees by giving them a new vision based on passion, hope and inspiration. In other words, Starbucks’s rapid expansion has distracted the member of the firm to consider the company not only as a place where coffee is enjoyed, but a place where customers can live a positive remark. The goals of Starbucks is create an environment where people can taste a good Italian coffee and atmosphere regardless of their geographic location.
John Quelch (2008) points out that among the very first individuals who had an opportunity to enjoy the surrounding of the club and the general environment to relax and have a cup of cofee always had a feeling of minority. In order to positively develop, Stuckbucks aspired to have more customers by quickly serving them and not only recognizing them with a conversation. Stuckburks therefore introduced ways of responding to arguments without undermining anyone. Many customers have now switched to other joints such as Peets, Caribou among others.
Secondly, Stuckbucks decided to widen its appeal. The products that were introduced for the first time out did thee most important part of the Stuckbucks in purifying coffee. They had to introduce and attract more lawyers who had to enjoy the other type of drinks which they considered complicate that were in the menu. More than half of customers always customized their drinks and thereby lawyers increased their passion for coffee. The experience of the brand decreased and the duration of waiting increased.
Thirdly, new stores and new products have been launched. This has created a very significant perspective of growth. This has taken out the attention of top management that has improved store sales over years. The upgrading of sales where store managers had to earn great respect increased the number of purchases in the neighborhood. Managers made efforts to store products when their prices are lower than other neighboring stores.. In the end, the saturation point of sales of existing stores does not only undermine the well-being of the brand but also the morale of the manager.
According to Emily Bryson York, one of the biggest mistakes of the company has been the lack of promotion and advertising. The company did not inform consumers about its potentiality based on high quality products. The difficult situation has been caused partially by the anti-advertising policy over the last years. During that period, competitors and all small coffee shops were able to express their opinion about Starbuck’s high prices products. Due to this situation, its CEO has planned a forthcoming advertising with the goal to convince people that Starbucks products are not so expensive.