Mba 510 Week Six Business Problem Paper
Business Problem: Starbucks Corporation
Starbucks Corporation (Starbucks) was established in the early 1970s and has expanded globally within 39 countries worldwide, although the majority of the company operations occur within the United States of America including more than 13,000 stores. Starbucks offers a vast selection of the highest quality coffees as well a large “selection of fresh pastries and other food items, sodas, juices, bottled water, coffee making equipment and accessories, a selection of compact discs, games and seasonal novelty items” (Starbucks Corporation, 2008, p. 5). The product selection is based on the location and size of the stores. By the year 2006, Starbucks had recorded revenues of $7,787 million, a 22.3% increase over 2005; and the operating profits and net profit had increased more than 14% from the year 2005 to 2006 with an operating profit of $894 million and a net profit of $564.3 million (p. 4). As a result of effective marketing strategies centered on high quality products and a positive consumer experience, the organization established a strong brand image that ultimately resulted in an attraction of new customers and increased revenue (p. 23). However, over the course of the last several years, Starbucks has seen a dramatic decline in the company’s stock and has closed 600 stores within the United States stores and eliminated close to 12,000 full-time and part-time positions (Baertlein, 2008, 1).
As Starbucks faces this decline in sales and stock prices, the company must consider a new marketing strategy that will include a new target market of families, teenagers, young adults, and employees from all sectors and industries to improve sales and ultimately stock prices, with the overall strategic goal of increasing the market share of the non-coffee drinker. The following information will provide a detailed analysis of the current situation facing Starbucks including the issues and opportunities and...
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