Starbucks: What Went Wrong

Starbucks seems to have suffered the same fate of KripyKreme doughnuts, enjoying the rapid rise, but also suffering an impending fall. After some considerations showing that they really have to perk up a little especially with the result of the 2007 stock performance, Starbucks took a deep breathe and scrutinized what happened, and how the Dunkin Donuts and McDonalds premium brews have overshadowed their once reigning image.

When you say Starbucks, you think of coffee. That is how phenomenal the coffee shop went from being just a small coffee house in Seattle. Starbucks revolutionized coffee drinking, or rather, it had elevated it to a much higher position. The mark of its success is manifested by its 17,000 chains in more than 49 countries.

There are also others who view the sporadic spread of Starbucks as an image of globalisation and world-wide marketing – almost the same as what happened to McDonalds. Some think that the Starbucks strategy is a little too anti-competitive. The company purchased leases from competitors and deliberately open chains even though there is risk of big losses. Another characteristic of Starbucks marketing is the stores are usually constructed and concentrated in a limited area.

Although we cannot deny that Starbucks strategy is indeed sometimes anti-competitive, the way it had spread horizons is worth the notice and consideration. Looking at the time line of the rise of the prominent coffee shop, competitors were compelled to sit back and brainstorm how they are operating and reflect on the improvements they need to undertake.

But, as they say, the world is round and what goes up must come down. The fast expansion of the coffee store turned out to be detrimental to the company itself. Starbucks' pride is the Starbucks experience – the feeling of exclusivity you get every time you take a sip of that grande frappuccino. Starbucks was considered at first as a place for the elite, but because of the construction of many Starbucks chains, the Starbucks experience lost its flavour. In the case of the United States, the 10,000 stores easily diminished the exclusivity of the store.

About 600 stores came to a close in 2008 in the US while 61 out of 84 stores ceased operations in Australia. In 2009, Starbucks additionally declared the closing of another 300 branches. Besides the taint in the Starbucks image, one job loss after another ensued, and the company was fast shedding off employees.

For the last two years, the popular coffee shop underwent major revamp in marketing strategy, and struggled to revived their unique selling point – the Starbucks experience. Now though, a lot of competitor have already jumped in the bandwagon, learning from the rise and fall of the coffee company.

For genuine coffee lovers however, the difference to the coffee experience may come from pottery mugs and coffee sets, especially at home. Nothing beats the right coffee inside the right cup. The McDonalds brew may be becoming popular nowadays, but in the end it all boils down to personal preference.

Will the public give Starbucks another chance? This remains to be seen as the coffee store takes a deep breath, and who knows one day, the principle of quality over quantity will make a triumphant return.