This case analysis attempts to identify the problems faced by Starbucks and propose a realignment of its strategic focus. Starbucks has been experiencing decline in its net revenues even at a time of expansion. There are many external factors impacting its performance though its internal problems pose a greater threat to its survival than external environmental factors.
It can be established through analysis of the case that Starbucks’ key strength since its beginning has been offering value to its customers by providing a coffee experience to its customers. By offering not just a cup of coffee but also a comfortable place to relax coupled with innovative services at its outlet. Starbucks’ corporate image as an environment friendly, communitarian and socially responsible company has been its complementary strength. It has been aiding its core strength and maintaining high levels of customer satisfaction. However, in recent years its strategic importance on expansion to increase market reach has been posing a threat to its strengths. This shift in strategy has led to decrease in customer orientation of Starbucks causing customer dissatisfaction. Starbucks’ deviation of focus from developing its products, maintaining its high ethical standards and partnerships with its employees have been reflective in its financial performance. Its net revenues and net earnings have been decreasing over the years and its stock price has been reflective of this trend. Its share price has taken a hit and has reduced because the company’s profits continue to decline.
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