STARBUCKS’ ‘VENTI’

PROBLEMBy: Daniel Gross

Ian George, Jennifer Hartwell, and Jessica Thornton

STARBUCKS EXPANDS TOO RAPIDLY

1,000 to 13,000 stores in 10 years Losing the “Starbucks Experience” People complain that “the stores are sterile,

cookie cutter, and no longer reflecting the passion of coffee”

EXPANSION IS NOT ALWAYS A GOOD THING

Starbucks had to sacrifice several things:Flavor-Locked Packaging

Stores lost their distinctive aromaAutomatic Espresso Machines

No longer the “small coffee shop” experience or feel

Chain – Like FeelingThe neighborhood store feeling was gone

STARBUCKS UPDATE Closing 600 underperforming stores

70% of those closing have only been open since October 2005

12,000 employees jobless Less than 350 stores plan to open in new

fiscal year starting October 2008100 store-development employees laid off

KRISPY KREME Doughnuts originally made fresh on the

premisesCustomers would wait hours for a fresh

doughnut After going public and expanding, they

started making doughnuts in central locations and distributing themSales plummeted, the stock collapsed

KRISPY KREME UPDATE Hot Doughnuts Now sign ~ Make fresh

doughnuts at certain times of the day Still manufacture some doughnuts used for

fundraisers Coffee The company reported a $5.9 million net loss

for the quarter ended November 2, 2008 while revenues dropped 9% to $94.3 million.

SNAPPLE Originally liked for its funky flavors and

offbeat advertising After purchased by Quaker Oats Co., they

decided the suddenly big brand needed advertising that was more professional and high concept

Sales plummeted, Quaker Oats Co. sold Snapple at a huge loss

SNAPPLE UPDATE

Brought back original ad campaign New bottle design Snapple facts New Products

Antioxidant water

CALIFORNIA PIZZA KITCHEN

Pros:Gourmet pizzeriaDifferent pizza experienceWood ovens with unique flavorConsidered a “destination”

Cons: No longer exclusive to certain areas of

California People of that area are no longer

considering it “their own”

TRADER JOE’S Pros:

Offers a variety of foods that others do not (organic, hard to find)

Has a different marketing technique, “funky”

Low pricesBeen able to expand without losing its

“flare” Cons:

Can stand to expand more since it has been able to do this successfully

IN-N-OUT BURGER Pros:

Old school hamburger joint feel“Not turning burgers into industrial

process”Fresh made in front of youHas not given up its exclusiveness

Cons: People are becoming more health aware

REFERENCES www. Googleimages.com http://seattlepi.nwsource.com/business/3691

52_starbucks02.html http://seattletimes.nwsource.com/html/

businesstechnology/2008028854_starbucks02.html