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Starbucks’ ‘ Venti ’ Problem

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

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  1. Starbucks’ ‘Venti’ Problem By: Daniel Gross Ian George, Jennifer Hartwell, and Jessica Thornton

  2. 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”

  3. 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

  4. 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

  5. KrispyKreme • Doughnuts originally made fresh on the premises • Customers would wait hours for a fresh doughnut • After going public and expanding, they started making doughnuts in central locations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

  6. 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.

  7. 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

  8. Snapple Update • Brought back original ad campaign • New bottle design • Snapple facts • New Products • Antioxidant water

  9. 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”

  10. 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

  11. 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

  12. References • www. Googleimages.com • http://seattlepi.nwsource.com/business/369152_starbucks02.html • http://seattletimes.nwsource.com/html/businesstechnology/2008028854_starbucks02.html

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