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In this memo he cautioned that Starbucks’ attraction was being eroded. He emphasized that over the past decade, the company had expanded business from 1,000 stores to more than…
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It is essential for Starbucks to adopt the following strategies, in order to obtain a competitive advantage over McDonald’s. The latter constitutes a serious competitor for Starbucks. This is discussed in the sequel.
Approximately, 80% of orders in the US, are consumed outside the premises of Starbucks outlets. In addition, 66% of the company owned stores sell lunch. These developments have produced a debilitating effect upon the ambience. Moreover, there has been a significant reduction in the education and average income levels of its customers. On the other hand, the customer base of McDonald’s has remained stable. Starbucks has resorted to selling lunch at many of its locations in the US, in order to gain entry into the area of food. As a consequence, the fragrance of coffee has been supplanted by that of food. The aim of this company is to remain one of the most recognized brands of the world, without sacrificing its unique status. Although, there has been a fifteen fold expansion in its stores, there are misgivings regarding its ability to grow in the face of stiff competition from McDonald’s and other fast food providers (Enz, 2009, p. 565).
Obviously, it is indispensable for Starbucks to increase its food outlets, in order to compete with McDonald’s. In addition, it has to reduce the price of its products. With reduced financial levels among the customers, the latter prefer the cheaper fast foods to coffee. Therefore, Starbucks has to sell fast foods that cater to the requirements of customers.
Jim Donald had been removed from service, in Starbucks. This dismissal of its CEO was crucial and a wise decision, as he had failed to be innovative. His lack of vision had produced an adverse effect upon the growth and development of Starbucks.
The increasing and intense competition, diminishing stock price, and qualms ...Download file to see next pagesRead More
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