Starbuck's Growth Destroyed Brand Value

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this consume much time and therefore will unable to serve customer better. Besides that, the increasing number of stores cause people found themselves in minority. Because when there are Starbucks stores everywhere around the town, the customer’s experience become no longer special. Meanwhile, the prices are still high.

Chapter 2: Solution

So in year 2008, Starbucks decided to close 600 stores in United States. The founder of Starbucks, Howard Schultz recognized the problem on the growth strategy of Starbucks, so he decide to downsizing. He decided to let the business run at a more controlled pace. Sometimes in the world of business, less is more. When the business are growing too big, the warm feeling of neighbourhood store is no longer there. In order to stay premium priced brand, Starbucks limited its distribution to restore its exclusivity. In year 2009, Starbucks had shut down 474 stores in the US and continue to shut 57 more stores in year 2010. (Starbuck Corporation, 2010) The stores that do not make profit were eliminated while the new stores were opened at a strategic location. Starbucks retail stores are typically located in high-traffic, high-visibility locations. Because the Company can vary the size and format, its stores are located in or near a variety of settings, including downtown and suburban retail centres, office buildings and university campuses. Besides that, Starbucks strategy to reach customers where they work, travel, shop and dine includes establishing and maintaining relationships with people that share its values and commitment to quality. They enhanced and develop their in store experience and environment by providing their customer free access to wireless internet.

Other than that, Starbucks also offer a variety of fresh food items, including selections focusing on high-quality ingredients, nutritional value and great flavour. Food items include pastries, prepared breakfast and lunch sandwiches, oatmeal and salads, as well as juices, sodas, and bottled water are all sell in the stores. (Starbuck Corporation, 2010) Starbucks improve their supply chain so that it can hit a higher profit margin. Therefore, when the Starbucks’s brand were developed, it attracted more new customers and old customer, the profit margin also increased.

Chapter 3: Conclusion

Starbucks develop their brand value through few new business strategy. They offer good quality of food and beverages. Instead of introduce more variety of coffee products, Starbucks improve their existing products and introduce only few new beverages at a time for a period. This able to keep the products of Starbucks become more premium. Starbucks shut down significant number of stores and reopened it on a more strategic location. Starbucks stores were focused on a better location instead of concentrating at the same location. Then, Starbucks enhance and upgrade their store environment to a more comfortable and convenience for work, dine and chill. A classy and comfortable environment able to touch people’s heart and attract more customers. Reorganize the business is a key to success, closing down stores that weren’t contributing to the bottom line, Starbucks can cut down their overhead cost or expenses and make a new planning for the money. Therefore, the expenses can be spend on more useful way. The crisis at Starbucks was as much the result of the economic recession as due to the expansion of the store network in the previous years. To reconnect with its customers, Starbucks also used social media to engage individual customers with its products and brand. As the growing in technology for social media, advertising become easier for Starbucks promote their products and brand.