Trouble Brews at Starbucks Case Solution & Answer

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This Case is about GROWTH STRATEGY, PRODUCT DEVELOPMENT

PUBLICATION DATE: January 22, 2009 PRODUCT #: 909A02-PDF-ENG

Trouble Brews at Starbucks Case Solution

Succeeding going public in the year 1992, Starbucks’ strong balance sheet and double digit increase made it a growth stock that was hot. The Starbucks vision was coffee culture as community, the Third Area between residence and work, where friends shared the exotic and encounter language of gourmet coffee. Rapid expansion in the amount of shops fueled its increase both in America and in foreign markets, the inclusion of drive through service, its own music label that marketed and sold CDs in shops and other add on sales, including sandwiches and pastries. In an incredibly brief time, Starbucks became an international brand that was extremely successful. But in 2007, Starbucks’ operation fell; the firm reported its first-ever decrease in customer visits to U.S. shops, which led to a 50 per cent fall in its share price. Starbucks’ growth strategies assessed and have been extensively reported, but seldom with an eye to their impact on the brand. Analyzing the increase choices made in America provides a rich context in which to analyze both drawback and the guarantee of additional foreign expansion.