The paper "Understanding Customer Needs and Managing the Customer Experience" is a great example of a Management Case Study. It is an apparent fact that Starbuck experienced extensive expansion both nationally and internationally since its early years of establishment in 1971 in Seattle’ s pike place market. At the local market, its rapid expansion is evidenced by the fact that by the time this company was being listed in public in 1992, it was already credited for commanding 140 stores and expanding at a fast pace. This is whereby the company had a growing store count of additional 40-60% annually.
This success was for some time replicated in other regions of the world as Starbuck sought to internationalize its operations. These regions included Asia, Europe, and Australia among other regions. For a period of time, Starbuck managed to command a significant market share in these regions, attaining commendable revenues in the process. Nonetheless, something wrong happened along the way and the popularity, profitability, as well as competitiveness of Starbuck, saw a gradual decline resulting in the closure of operations in different parts of the world, most notably in Australia.
Against this backdrop, this paper seeks to primarily explore where Starbucks went wrong and what caused it to collapse in Australia. Additionally, it will investigate diverse lessons that can be learned by other service firms that are seeking to cross international borders. Coupled with the above, this paper will also explore other aspects of the service element and evaluate the strengths, weaknesses, areas for improvement and constraints among other aspects and lastly make recommendations. Strengths and weaknesses There are diverse strengths that underpinned the initial success of Starbuck, mostly in the American market which saw its expansion in other regions of the world.
On the other hand, there are some inherent weaknesses, both internal and external which immensely contributed to its eventual collapse, mostly in the Australian market. These can be comprehensively explored through a SWOT analysis of this company. SWOT analysis A SWOT analysis can be perceived as the process through which decision-makers in a specific organization engage in the gradual development of their awareness of the organizational environments with the core objective of influencing the performance both in the short and in the long-term (Naryanan & Nath, 1993).
Al-Rousan and Qawasme (2009) cited that an explicit relationship exists between dimensions of competitive advantage and SWOT (Strength, Weakness, Opportunity, and Threat) analysis. Strengths Several reasons have been forwarded explaining the rapid success and expansion of Starbuck, mostly at the American market. Firstly, it has been cited that Starbuck succeeded in Americanizing the European coffee tradition, something which had not previously been done by any coffee house. This was against the backdrop that before Starbuck undertook this fundamental step, coffee had previously been alien to most American citizens. In addition, this company successfully created a ‘ third place’ in the lives of people, that place between work and home where people could sit and relax.
On the other hand, Starbuck was able to create a robust brand that became a symbol of status and still attracted consumers despite its higher prices. In this case, Starbuck can be perceived to have extensively adopted a value-based pricing model that relates to value perceived by consumers. This was coupled with the fact that this company provided great consumer experience which was attractive to most consumers.
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