Howard Schultz and the Starbucks Company
Maln Problem Statement After analyzing all aspects and factors, the main problem statement found for this case study is as follows: “The rapid and over expansion plan of Starbucks store- owned outlets to capture the maximum market share has lead to many problems” As stated above, Starbucks is facing the problem of fast and over expanding of its outlets as the company tries to gain as much market share and opportunities as possible.
This, however has led to many problems such as cannibalization of usiness through clustering and low net Income margin despite achieving record sales and revenues. The problem is further complicated by other problems such as Insistence of the company to store-own outlets outside the North American region and increased number of employees at Starbucks. 3. 0 Focus Expansion Only on under-served Countries and Locations One of the alternative strategies that could help to solve the main problem Is to change the Starbucks policy on outlet openings.
In this strategy, Starbucks should identify countries or locations where the company has the least presence and oothold; choosing to open outlets only at these locations while stop outlet openings in areas where the company already has established itselt. For example, Starbucks should look into the China and South Korea market as there are currently only 9 outlets and 1 outlet of Starbucks In those locations, respectively. 3. 2 Allow Another strategy is to allow the franchising of the Starbucks brand to locations outside the North American market.