THE PROBLEM FACED BY STARBUCKS IN 2008
- Store shutdown nationwide
In 2008, Starbucks forced to shutdown 600 stores meanwhile additional of 300 stores was close in the following year. Starbucks lay off total of 6,700 employees
2. Global Financial Crisis 2008
This caused US economy to face inflation which lead to lower purchasing power among US consumer. Therefore, people seems to ignore Starbucks's coffee due to its high pricing.
3. Profit loss
Company profit surge by 28% in 2008 compared than its previous year profit earning
4. Expansion of branch
Starbucks rapidly expand their branches nationwide distract the company's main aim which is treating Starbucks as inviting place with new products. As a result, lower sales lead the company to experince high operational cost
5. Less consumer-More bureaucracy
Starbucks begin to opperate their company based on bureaucracy and not customers anymore
HOW STARBUCKS OVERCOME IT?
1. Store layout
Change the store-layout design and embarked technology orientated strategy like set up Wifi
2. MY Starbucks Idea
Create a platform for customers to raise out their experience and comment straight to the management. The company so far received 93,000 ideas which was shared by 1.3 million social media users with page viewership rose to 5.5 million
3. Realign their focus
Starbucks realize that their focus should not be on profit, product or competitor. Instead, the company rebuild it's consumer relationship by alter their focus towards quality and consistency of their products
4. Community centric
The company more focused on building and engaging with the community. Announced 13 measurable goals need to achieve by 2015. Example, Starbucks coffee would be 100% responsibly grown and fairly trade.
5. Mobile applications
Become the first company to use mobile application to engaging with community. Starbucks enhance mobile apps to provide information and corresponding with their targeted community. This apps provide features like store locator, reqard programme, and nutrition based information to users
6. Get free offers
Nothing can beat free offers to gain consumer attention. Yes! Starbucks used the same concept where they give away free pastry with coffee to each purchases before 10:30am from Starbucks stores
7. Technology augment company marketing and brand image
Starbucks identify the impact of social media before other competitor companies. Social media advertisement help the company to reduce marketing cost of the firm significantly. Currently, the copmpany have total of 10.9 million followers in Twitter. Starbucks becomes the most successful company to run their social media account rather than other key players in the market.Click here
8. Employee is the main support of company
The company create different internal communication platform to communicate with their employee and baristas. In this place, employee of Starbucks could able to generate ideas and debate the ideas as well
9. Customization coffee drink
Before 2008, customers can't customize their drinks. The company implement users ideas from My Starbucks Idea program. Consumers can select what their wanted to be included in their drinks.
10. My Starbucks Signature
Customer's name would be written on their drinks upon customization. Increase satisfaction and enhance the company's bonding with their targeted community. Customers upload their signature drinks to their social media account so, company enjoy free marketing
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