In 2008, Starbucks announced that they would be closing 600 US stores. Up to that point, Starbucks stores had added new offerings, including wi-fi and music for sale, but started to lose its warm “neighborhood store” feeling in favor of a chain store persona. Harvard Business Review points out that in this situation, “Starbucks is a mass brand attempting to command a premium price for an experience that is no longer special.” Meaning, in order to keep up, Starbucks would either have to cut prices, or cut down on stores to restore its brand exclusivity. HBR’s case study shares three problems with the growth of Starbucks: alienating early adopters, too broad of an appeal, and superficial growth through new stores and products. Harvard recommends that Starbucks should have stayed private, growing at a controlled pace to maintain its status as a premium brand.
Answer these three questions (explain the answers in seven to ten lines each):
1.Why do you think Starbuck’s was providing “an experience that is no longer special”?
2. Do you agree that in order “to keep up, Starbucks would either have to cut prices, or cut down on stores to restore its brand exclusivity”?
3. Provide three recommendations the coffee company should instrument to enhance success.
