Case: Starbucks
Starbucks was founded on a vision of a coffee community or “third place” where friends could meet to talk, work, or just hang out. The company quickly became a worldwide phenomenon characterized by rapid store expansion, add-on services (drive thru, music, sandwiches, etc.) and the best place to find gourmet coffee. Just as quickly, however, Starbucks’ success began to slip with declining customer visits, a falling stock price, and the actual closing of some locations. This case looks at how non-brand decisions (financials, contracts, locations, add-on services) eroded Starbucks’ brand positioning and brand equity over time. It serves as a reminder that even great brands can sometimes lose their way.
How was Starbucks able to take a commodity product and successfully differentiate it to the point where customers would pay seemingly high prices to obtain it?
How did Starbucks’ non-brand decisions erode the brand’s positioning? How did this brand erosion lead to customers losing interest in the brand?
Assume it is 2008 and you are Howard Schultz. You have just been brought back to the company you founded to turn it around. What would you do to reinvigorate the Starbucks’ brand? Discuss both short-term and long-term strategies.
Number each answer 1, 2 and 3.
2 scholarly references
