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Starbucks – ‘The Third Place’
Introduction
US-based coffee café chain, Starbucks Corporation (Starbucks), turned a profit of US$ 1.25 billion for the year 2013. Several reports stated that 20 percent of Starbucks’ loyal customers visited the stores at least 16 times in a month.
Right in the 1980s, Howard Schultz (Schultz), chairman and CEO of Starbucks, had dreamed of establishing the company as a ‘third place’ , where customers could gather and spend quality time. To establish the coffee brand as the world’s favorite third place, Starbucks adopted certain strategies like innovation, delivering the best possible customer service, customization, and many others.
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In 2000, Schultz stepped down from the post of CEO. From then on, Starbucks continued to expand rapidly but this brought its own set of problems. The stores were opened in close proximity, leading to cannibalization of sales. The problems at the company were aggravated by the economic situation in the country, and falling demand from some of the important markets in the US. Also, with rapid expansion, Starbucks lost the exclusivity associated with the brand. Starbucks introduced several products apart from coffee while competitors like McDonald’s and Dunkin’ Donuts started serving coffee at their outlets.......
