Fashion Channel Questions

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STARBUCKS QUESTIONS

For Question 3, provide financial calculations to support your recommendation. I recognize that it is early days in the program so do your best to consider the numbers.

1) At the time of the case, why had Starbucks been so successful?

Reasons;

1. With the public offering, raising $25 million. The proceeds allowed Starbucks to open more stores across the nation.
2. From a retail perspective, a successful branding strategy by creating an “experience” around the consumption of coffee. To enforce its exacting coffee standards, Starbuck;
: controlled as much of the supply chain as possible in high-traffic, high-visibility settings such as retail centers, office buildings, and university campuses
: worked directly with growers in various countries of origin to purchase green coffee beans,
: oversaw the custom-roasting process for the company’s various blends and single-origin coffees
: controlled distribution to retail stores around the world.
: by creating an effective atmosphere and customer service, referred to as “customer intimacy”

2) Summarize the research presented in the case in terms of the key implications for Starbucks management. What concerns should they have about the results?
1. Sound financial records. Starbucks profitability has been rising for the past few years.
2. Starbucks has a strong brand reputation associated with quality coffee and excellent customer service. Its brand is the most valuable brand in coffeehouse segment.
3. “Starbucks experience”. One of the strongest advantages Starbucks has is the experience it delivers to its customers with perfectly blended coffee, friendly staff and warm atmosphere, which results in incomparable customer service.
4. Starbucks’ strategy for expanding its retail business was to open stores in new markets while…...

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