Starbuck Case Questions

Varshini Subramaniam
VXS1597

1. Can Schultzs business model be challenged?

Schultz has created a business model that is innovative and inspiring for employees to
work for Starbucks. The company is very innovative and ready to take risk to retain its brand
image and make Starbucks a strong global brand. In order to make Starbucks a global brand
the company had a successful inventory supply to all the stores in the globe. It provides the
part time and full time employees with a high wages, happy place to work and better health
insurance coverage than other companies.
Starbucks is a company that sells its brand name with the coffee to the customers. They
created an atmosphere where customers can interact with other people and can make
memories of their own with Starbucks.
2. How would you prove that happy employees lead to greater sales?
Every employee will want to work in a happy place. There are several advantages to a
business firm when employees are happy.
Working in a happy environment will motivate the employee to work efficiently
and get the work done quickly.
Importantly when employees are happy and satisfied with the work place. They
proudly talk about the good things that the company provides them with to their
friends even after they are off work. This will help benefit the image of the
company.
The employees provide better customer service only when they are happy.
Satisfied customer will help the company to reduce advertising cost by
advertising through word of mouth.
Involving employees to make decision will help to solve problem easily and
quickly.
3. Do you frequent Starbucks? If so, what is your opinion of it?
No I dont visit Starbucks frequently. I do not drink coffee.
4. If you do not frequent Starbucks, what might induce you to try it?
One of the main reasons why I would like to try Starbucks is because of its brand name.
Environment with free Wi-Fi and other treats in Starbucks like hot chocolate, smoothies
and baker items might make me to visit Starbucks again.
5. Do you see any limits to Starbucks' growth?
Starbucks has already created a firm customer base. I personally do not see any limits in
the growth of the company. But there are some areas that they have to concentrate more on.

Starbuck Case Questions

They should properly select the right Franchisees to manage Starbucks. There
should be any difference from a company owned and franchise stores.
Poorly maintained franchise store will create a bad reputation for the company
Starbucks as a whole. Their main goal is to satisfy their customers.
Price plays a major role in Starbuck as the price of coffee is high compared to
other stores. People prefer Starbuck for its unique flavor even though they charge
a premium price. Hence the store should maintain a consistent flavor.

6. Would drive-through windows make Starbucks more attractive or less attractive?

Why?
Starbucks is trying to maintain its originality of presenting it as a coffee house and not a
fast food store. Having a drive through window will make it look like a fast food store. They
will lose its originality. There is a disadvantage in having a drive through window. If there is
a delay in serving the drive through customers at the right time, it might cause all the cars to
jam up and cause traffic. Other than this having a drive through window will help morning
customers to have the convenience to wait in their car to get their order than to stand in the
waiting line inside the store.
7. Several recent surveys have found that Starbucks coffee in blind taste tests is not rated
any higher by consumers than McDonalds, Dunkin' Donuts, and some local coffee
houses. Yet, Starbucks continues to command a price premium. Discuss.
Starbucks has created a brand name as a coffee house and is known for its unique coffee
taste. But as for the companies like McDonalds and Dunkin Donut, they have been using
Coffee just to attract customers. McDonalds is a fast food restaurant which has burgers and
fries as their prime products. Similarly Dunkin Donuts prime product is donut.
Starbucks has created an environment with free wiki where people prefer to visit often.
Brand name and customer preferred environment helps the company to increase sale even
though the company continues to command a price premium.
8. "Starbucks' unspoken strategy for repeat business is coffee so strong in caffeine that
customers become addicted to it like tobacco. Is this a good citizen?" Comment.
Personally I dont drink coffee and I would tell people that drinking more than 2 cups of
coffee per day is bad for your health as it has caffeine in it and caffeine cause an increase in
blood pressure and might also cause early death.
You might feel that comparing caffeine and tobacco can be unfair as you can see here that
caffeine has less danger than using nicotine.

(Addictive Qualities of Popular Drugs)

Starbuck Case Questions

But there is an article that states Both caffeine and tobacco (nicotine) can raise the heart
rate, cause nausea, and even kill, but only in extraordinarily high doses that are hard to come
by. Nicotine has similar qualities as caffeine, says Ray Story, head of the Tobacco Vapor
Electronic Cigarettes. .
Ref: http://www.drugwarfacts.org/cms/addictive_properties#sthash.ZZUgF3ec.dpbs
http://www.nationaljournal.com/magazine/is-nicotine-really-any-different-thancaffeine-20130620.
9. [With Frappuccinos] thats when we discovered we were bringing people into the
stores that hadn't had coffee before." These words of Michelle Gass have interesting
implications. Evaluate them on several dimensions.
Frappuccino has become the trademark drink of Starbucks. It is a blended coffee
beverages developed.
People assume that Frappuccinos are good to health when compared to coffee as they are
made of iced or chilled cappuccino that may be topped with whipped cream. But they
generally consist of espresso coffee, milk, sugar, ice, whipped cream and other sweeteners.
Cappuccino contains a high amount of caffeine that will cause an addiction for people to
want more. Research has shown that Frappuccinos are kids gateway drug to caffeine
addiction. Instead of getting soda kids are not getting Frappuccino. Per ounce, regular Coke
actually has the same amount of sugar as bottled Mocha Frappuccino (3.3 grams) and fewer
calories (12 per oz for the soda and 19 per oz for the coffee drink). A bottle of Frappuccino
also has 3 grams of fat per serving, while coke is fat-free. Clearly, neither drink is healthy
Ref: http://qz.com/176534/frappuccinos-are-kids-gateway-drug-to-caffeineaddiction/