Case Study: Technology Helps Starbucks Find Better Ways to Compete

Starbucks is the world’s largest specialty coffee retailer, with over 24,000 shops in 75 markets. Starbucks’s reputation rests on its high-end specialty coffees and beverages, friendly and knowledgeable servers, and customer-friendly coffee shops. This was a winning formula for many years and has enabled Starbucks to charge premium prices for many of its items. But Starbucks has competitors, and must constantly fine-tune its business model and business strategy to keep pace with the competitive environment.

Starbucks tried online retailing and it didn’t work out. Starbucks stopped selling online in August of 2017. Starbucks management believes there has been a “seismic shift” in retailing, and merchants need to create unique and immersive in-store experiences to survive.

Starbucks is focusing on improving the in-store experience. The company rolled out a new Mercato menu of freshly-made sandwiches and salads to more than 1,000 stores in 2018 and plans to expand its line of caffeinated fruit juices (Starbucks Refreshers) and nitro-brew cold drinks.

Management hopes to double food sales by 2021. Starbucks is also building high-end cafes around the world under the “Reserve” brand to draw customers willing to pay more for premium coffee and pastries.

Starbucks continues to enhance the customer’s in-store experience through information technology.

 Introduction

  • Identify the key problems and issues in the case study.
  • Formulate and include a thesis statement, summarizing the outcome of your analysis in 1-2 sentences.

Background

  • Set the scene: background information, relevant facts, and the most important issues.
  • Demonstrate that you have researched the problems in this case study.

Alternatives

  • Outline possible alternatives (not necessarily all of them)
  • Explain why alternatives were rejected
  • Constraints/reasons
  • Why are alternatives not possible at this time?

Proposed Solution

  • Provide one specific and realistic solution
  • Explain why this solution was chosen
  • Support this solution with solid evidence
  • Concepts from class (text readings, discussions, lectures)
  • Outside research
  • Personal experience (anecdotes)

Recommendations

  • Determine and discuss specific strategies for accomplishing the proposed solution.
  • If applicable, recommend further action to resolve some of the issues
  • What should be done and who should do it?

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