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Founded in 1971 and acquired by CEO Howard Schultz in 1987, Starbucks was an American success story. In forty years it grew from a single-location coffee roaster in Seattle, Washington to a multibillion-dollar global enterprise that operated more than 17,000 retail coffee shops in fifty countries and sold coffee beans, instant coffee, tea, and ready-to-drink beverages in tens of thousands of grocery and mass merchandise stores. However, as Starbucks moved into new market contexts as part of its aggressive growth strategy, the assets and activities central to its competitive advantage in its retail coffee shops were altered or weakened, which made it more vulnerable to competitive threats from both higher and lower quality entrants. The company also had to make decisions on vertical integration related to its expansion into consumer packaged goods.

Understand how strategy needs to be adapted to new contexts. Understand how to manage tradeoffs involved in growth. Be able to identify possible threats to competitive advantage as a result of growth.

This case describes the financial and non-financial performance of Starbucks, a large organisation provided as on 2007. Howard Schultz, the promoter and chairman of the corporation is disturbed by the decline in the performance of Starbucks, especially the dilution of customer experience. He is required to analyse what happened and adopt a course of action to strengthen Starbucks' performance vis a vis competitive attacks. The participants are required to analyse the situation, generate options for Starbucks and make recommendations for the future, including whether Jim Donald, the current incubent, needs to retained as the CEO of Starbucks.

By early 2009 Starbucks had nearly 17,000 stores worldwide, with about a third of these outside the United States. Despite multibillion-dollar annual revenues, the giant coffee retailer's yearly growth had declined by half, quarterly earnings had dropped as much as 97 percent, same-store sales were negative, and its stock price was languishing. Factors such as a global economic downturn and increasing competition in the specialty coffee market from large players such as McDonald's and Dunkin' Donuts had driven this decline, resulting in the closings of hundreds of domestic stores already, with many more planned. Founder Howard Schultz, who had recently returned as CEO, and his executive team were convinced that Starbucks's growth opportunities lay overseas, where the firm already had a strong foothold in markets like Japan and the United Kingdom and was preparing to open hundreds of new stores in a variety of locations. But recent international challenges, including the closing of most Australian stores due to sluggish sales, made clear that Starbucks had more to learn about bringing its value proposition—a combination of premium coffee, superior service, and a “coffeehouse experience”—to foreign soil. The key question was not whether Starbucks could transport its value proposition overseas, but how the value proposition's three elements would play in recently entered and new markets. And the stakes of making the right international moves rose with each U.S. store closure. Schultz and his team also faced a broader question, one that applied to both their U.S. and foreign stores: Could they “grow big and stay small,” remaining a huge retailer that delivered both high-quality products and a consistently intimate and enjoyable experience to consumers worldwide? This case presents this challenge in the context of Starbucks's history, well-established value proposition, and domestic and international growth and vision.

The key objectives of the case focus on the successful growth of local city brand, to a country brand, to a global brand, leaving the questions: 1. How much more can it grow? 2. Can it? 3. What is the impact of new competitors in a given market and/or the impact of the global economy on discretionary spending by a loyal customer base? 4. How important is it to the sustain a brand's core value(s) proposition when innovating for new audiences and customer preferences?

The case integrates frameworks on business models, the business model canvas (BMC) and Porter’s generic strategies in the context of the coffee industry in China. The case enables students to construct a Business Model Canvas for competing companies, analyze the canvas to deduce the generic strategy they are pursuing, and formulate recommendations based on this analysis.

The case is derived from secondary sources, including publicly available reports and information about Starbucks and Luckin.

This case looks at Starbucks in China as it faces a fierce Chinese competitor and evolving consumer behavior. Luckin, a Chinese coffee store company, had seen explosive growth since its inception in Beijing in 2017. By late 2019, its number of brick-and-mortar locations surpassed the number of Starbucks’ coffee stores in China, which had entered the Chinese market two decades earlier in 1999. Luckin’s focused on convenience through leveraging technology and reducing costs by limiting physical stores. Although Luckin’s fortunes turned in March of 2020, after an accounting scandal came to light, Luckin’s success suggests that consumers were attracted to its positioning as a “fast coffee pickup and delivery” provider. The case describes Starbucks’ strategy in China, which it sees as an important long-term growth market. It also describes the strategic activities of fast-growing, Chinese coffee company Luckin and discusses Chinese culture and consumer behavior.

The case is written for undergraduate students enrolled in a business strategy or corporate entrepreneurship course. Given that the case centers on China, it could also be used in international entrepreneurship/business courses.

The purpose of this study is to explore the factors influencing the happiness of customers of two global coffee food chains through qualitative research in the post pandemic era. Unlike existing studies, this study will compare and examine the differential points between two global coffee food chains so that others can improve their strategies to improve their competitiveness.

It is qualitative research employing sentiment analysis through “Sprinkler Software” to assess the sentiment of customers of Starbucks and Barista followed by focus interviews through the same customers who have visited both Starbucks and Barista.

The results showed that most important factors which motivate customers and make them happy to go for “Starbucks” or “Barista” are ambience, store location, quality of product offerings and service quality. Value for money, quality of products and service quality are the top three variables affecting the customers and have rated Starbucks better than Barista on these parameters. The happiness level of the same customers who have visited both the coffee chains is more with Starbucks compared to Barista.

This research contributes to better understanding the effects of different marketing strategies adopted by coffee chain stores and can provide direction to Barista and other coffee chains. The stimulus-organism-response (SOR) model in coffee chain store application is an additional contribution to existing knowledge.

• Most important factors which motivate customers and make them happy to go for “Starbucks” or “Barista” are ambience, store location, quality of product offerings and service quality.

• Value for money, quality of products and service quality are the top three variables affecting the customers and have rated Starbucks better than Barista on these parameters.

• The happiness level of the same customers who have visited both the coffee chains are more with Starbuck compared to that of Barista.

• This is significant and can give direction to Barista and other coffee chains through learning from this research.

• Using the extended SOR model, we explain the variation in response in the happiness level of customers of two coffee chains.

• In order to give an insight into the strategies adopted by Starbucks and Barista in emerging markets, a comparison of the happiness levels of clients of both coffee chains is presented.

• This original research can help coffee chains improve their return on investment.

• The SOR model in coffee chain store application is an additional contribution to existing knowledge.

Most important factors which motivate customers and make them happy to go for “Starbucks” or “Barista” are ambience, store location, quality of product offerings and service quality.

Value for money, quality of products and service quality are the top three variables affecting the customers and have rated Starbucks better than Barista on these parameters.

The happiness level of the same customers who have visited both the coffee chains are more with Starbuck compared to that of Barista.

This is significant and can give direction to Barista and other coffee chains through learning from this research.

Using the extended SOR model, we explain the variation in response in the happiness level of customers of two coffee chains.

In order to give an insight into the strategies adopted by Starbucks and Barista in emerging markets, a comparison of the happiness levels of clients of both coffee chains is presented.

This original research can help coffee chains improve their return on investment.

The SOR model in coffee chain store application is an additional contribution to existing knowledge.

Can the return of its founding CEO turn a lagging Starbucks around? Howard Shultz must map a strategy that addresses the company's decreasing sales and perhaps too rapid growth. Had the previous CEO's efforts to streamline operations compromised the Starbucks experience or was a changing economy to blame? Schultz considers whether to close existing stores, slow U.S. growth while expanding overseas, and improve the customer experience, which he believed had eroded the company's value proposition.

Students after reading the case will learn about the issues and challenges of expansion in emerging markets. Global expansion versus multinational expansion. Stardardization versus localization. Socio-cultural aspects in international marketing. Leadership succession in multinational companies.

The case is about Starbucks’ journey of global expansion. It focuses on challenges in emerging markets. It also talks about the challenges to new CEO Kevin Johnson post stepping down of iconic leader Howard Schultz.

MBA Executive MBA Specialisation in Strategy, International Marketing.

Teaching Note are available for educators only. Please contact your library to gain login details or email support@emeraldinsight.com to request teaching notes.

CSS 5: International Business.

This study aims to illustrate how firms engage in rhetorical history, i.e. “the process by which managers skillfully impose meaning on a firm’s past as a persuasive and agentic process” (Suddaby et al., 2010). The case study shows that the connection of past events to specific and schematic narratives allows external events to be appropriated and used by Starbucks as assets to achieve its organizational goals (e.g. legitimacy).

The study is based on a close reading and coding of 1,852 “stories” (2,470 pages) published by Starbucks between 2003 and 2020.

The authors first show that Starbucks’ language relies heavily on terms referring to temporality. The authors then highlight the organization’s efforts to assert its history, to emphasize its heritage and to inscribe itself in local and national histories. With this case study, the authors contribute to the ongoing debate on history as an organizational resource. The study shows how brands that are not necessarily “historical” can mobilize rhetorical history in their strategic marketing.

This case study illustrates four heritage implementation strategies: narrating, visualizing, performing and embodying. Further research could contribute to the discussion of rhetorical history production practices, in particular how heritage elements are validated, articulated, related and adopted by organizations (Burghausen and Balmer, 2014).

The research shows that the main mechanism for constituting social memory assets does not lie in the accumulation of narratives, but in the coupling of narratives at different levels, and in the inclusion of several stakeholders within the narratives. The research also highlights that the affirmation of the historicity of the firm is a prerequisite for the constitution of social memory assets. The research shows that there are a wide variety of ways to convey historical narratives, in particular the essential role leadership plays in the rhetorical process of historicization. The research also shows that the issues of identity and legitimacy are more closely linked than previous research has suggested. In a way, rhetorical history serves strategic management as much as marketing. The porosity between the different audiences allows for a strong alignment between stakeholders, thus consolidating a competitive advantage that lies at the heart of Starbucks’ success, and which notably contributes to reinforcing its core value proposition (i.e. access to a “welcoming, safe and inclusive” third place) and its relational business model. Finally, the case shows that the mobilization of social memory assets does not necessarily lead to the use of nostalgic associations. In this case, for Starbucks, it is not a matter of cultivating memories of the “good old days” but of drawing inspiration from the past, of maintaining traditions to remain culturally relevant and of relying on these assets to project itself into the future.

The purpose of this paper is to test the popular perception that the storefront location choices of premium brands are positively related to adjacent rents. Focusing on the case of Starbucks, a popular international coffee chain, the authors examine the association between Starbucks locations and rents in Manhattan, New York.

The authors use a multi-year data set for average rent per square foot for office and multifamily residential properties within 1/10th of a mile of several hundred coffee shop locations in Manhattan, controlling for vacancy, job density, overall amenity density (WalkScore), coffee shop density, transit accessibility, neighborhood and the Starbucks brand. The authors take two different methodological approaches to isolate potential statistical evidence for an association between Starbucks locations and adjacent rents: the authors run a pooled-cross-sectional model and apply propensity-score matching.

The authors find a statistically significant positive relationship between the presence of Starbucks and average office rents when applying the authors’ pooled-cross-sectional model and applying propensity-score matching. This finding is consistent with several potential causal hypotheses: Starbucks may be attributed to higher rent office locations; the “Starbucks effect” may cause higher rents in adjacent locations; or there may be a mutual reinforcing of positive feedback between Starbucks locations and office rents. The authors find no strong association between Starbucks and residential rents (one model indicates an effect of 2.3 percent on residential rent at 10 percent level of significance), which challenges the direct linearity of the consumption theory of gentrification popularly called the “Starbucks effect.”

In the literature, the existence, causality and directionality of a relationship between Starbucks locations and neighborhood change have been largely unstudied. In this paper, the authors test the hypothesis that there is a positive correlation between Starbucks locations and rents.

This paper highlights that the strategic use of design, a competitive pattern typically associated with creative industries, those creating and trading meanings, also characterizes industries that produce functional or utilitarian goods not typically considered creative. The paper explores the origins of this phenomenon in the context of three industry settings: cars, speciality coffee and personal computers. The analysis theorizes three distinct strategic paths that explain how design may become an institutionalized aspect of competition in industries that are not creative. We explain how firms link their products to the identities of their users, how design is linked to stakeholders' emotions and visceral reactions to products and how intermediaries are relevant to enhancing attention to design. Illuminating these strategic paths allows harnessing some of the well-established understandings about competition in creative industries towards understanding competition in noncreative industries.