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Starbucks’ ‘ Venti ’ Problem. By: Daniel Gross. Ian George, Jennifer Hartwell, and Jessica Thornton. Starbucks Expands Too Rapidly. 1,000 to 13,000 stores in 10 years Losing the “Starbucks Experience”

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starbucks venti problem

Starbucks’ ‘Venti’ Problem

By: Daniel Gross

Ian George, Jennifer Hartwell, and Jessica Thornton

starbucks expands too rapidly
Starbucks Expands Too Rapidly
  • 1,000 to 13,000 stores in 10 years
  • Losing the “Starbucks Experience”
  • People complain that “the stores are sterile, cookie cutter, and no longer reflecting the passion of coffee”
expansion is not always a good thing
Expansion Is Not Always A Good Thing
  • Starbucks had to sacrifice several things:
    • Flavor-Locked Packaging
      • Stores lost their distinctive aroma
    • Automatic Espresso Machines
      • No longer the “small coffee shop” experience or feel
    • Chain – Like Feeling
      • The neighborhood store feeling was gone
starbucks update
Starbucks Update
  • Closing 600 underperforming stores
    • 70% of those closing have only been open since October 2005
  • 12,000 employees jobless
  • Less than 350 stores plan to open in new fiscal year starting October 2008
    • 100 store-development employees laid off
krispy kreme
KrispyKreme
  • Doughnuts originally made fresh on the premises
    • Customers would wait hours for a fresh doughnut
  • After going public and expanding, they started making doughnuts in central locations and distributing them
    • Sales plummeted, the stock collapsed
krispy kreme update
KrispyKreme Update
  • Hot Doughnuts Now sign ~ Make fresh doughnuts at certain times of the day
  • Still manufacture some doughnuts used for fundraisers
  • Coffee
  • The company reported a $5.9 million net loss for the quarter ended November 2, 2008 while revenues dropped 9% to $94.3 million.
snapple
Snapple
  • Originally liked for its funky flavors and offbeat advertising
  • After purchased by Quaker Oats Co., they decided the suddenly big brand needed advertising that was more professional and high concept
  • Sales plummeted, Quaker Oats Co. sold Snapple at a huge loss
snapple update
Snapple Update
  • Brought back original ad campaign
  • New bottle design
  • Snapple facts
  • New Products
    • Antioxidant water
california pizza kitchen
California Pizza Kitchen
  • Pros:
    • Gourmet pizzeria
    • Different pizza experience
    • Wood ovens with unique flavor
    • Considered a “destination”
  • Cons:
    • No longer exclusive to certain areas of California
    • People of that area are no longer considering it “their own”
trader joe s
Trader Joe’s
  • Pros:
    • Offers a variety of foods that others do not (organic, hard to find)
    • Has a different marketing technique, “funky”
    • Low prices
    • Been able to expand without losing its “flare”
  • Cons:
    • Can stand to expand more since it has been able to do this successfully
in n out burger
In-N-Out Burger
  • Pros:
    • Old school hamburger joint feel
    • “Not turning burgers into industrial process”
    • Fresh made in front of you
    • Has not given up its exclusiveness
  • Cons:
    • People are becoming more health aware
references
References
  • www. Googleimages.com
  • http://seattlepi.nwsource.com/business/369152_starbucks02.html
  • http://seattletimes.nwsource.com/html/businesstechnology/2008028854_starbucks02.html