Starbucks’ Growth Destroyed Brand Value Leadership & Managing ✓ Solved

Starbucks announcement that it will close a few stores in Saudi Arabia reflects an admission of limits to growth. The founder Howard Schultz recognized the problem that his own growth strategy had created: “Stores no longer have the soul of the past and reflect a chain of stores vs. the warm feeling of a neighborhood store.” Starbucks tried to add value through innovation, offering wi-fi service, creating and selling its own music. More recently, Starbucks attempted to put the focus back on coffee, revitalizing the quality of its standard beverages. However, none of these moves addressed the fundamental problem: Starbucks is a mass brand attempting to command a premium price for an experience that is no longer special. How will you help the company to recover and expand its operations in Saudi Arabia? The Company hired you as CEO of Starbucks coffee in Saudi Arabia.

To sustain and expand the Starbucks Stores in the Kingdom of Saudi Arabia, you need to identify the competitive advantages for growth, outline potential products and services, establish business objectives and goals, and describe the four managerial functions that can be applied. Additionally, you must explain different types of planning for management levels in Starbucks within KSA while discussing various theoretical perspectives about management in the context of Starbucks, followed by a conclusion.

Paper For Above Instructions

Starbucks, a globally recognized brand in the coffee industry, is facing challenges that threaten its market presence and overall brand value in Saudi Arabia. As the newly appointed CEO for Starbucks in Saudi Arabia, I believe that a strategic recovery and expansion plan is essential to revive the brand's image, attract more customers, and enhance profitability in the region.

Competitive Advantages for Growth

One of the significant competitive advantages Starbucks holds is its strong brand identity and recognition. With an established global presence, Starbucks has built a reputation for quality coffee and excellent customer service. To further leverage this, the company can enhance local flavors and preferences in its product offerings, like introducing traditional Saudi Arabian drinks or snacks that resonate with local customers.

Another advantage lies in Starbucks’ commitment to sustainability and ethical sourcing, which appeals to a growing segment of environmentally conscious consumers. By emphasizing these values, Starbucks can differentiate itself from fast-food competitors and attract a loyal customer base. Additionally, ongoing investment in technology and digital customer engagement through its app can create a personalized experience, further cementing customer loyalty.

Products and Services

To expand Starbucks’ product offerings in Saudi Arabia, I recommend introducing a range of local beverages, such as traditional Arabic coffee and tea, alongside seasonal products that cater to local tastes. Moreover, Starbucks can enhance its food menu by incorporating popular local snacks and dishes, ensuring that both locals and tourists find something appealing.

Leveraging technology, the company could introduce online ordering and delivery services, catering to the growing trend of convenience. Additionally, hosting local events such as coffee brewing workshops or cultural nights can create a community vibe and draw customers into stores.

Business Objectives and Vision

The primary objective is to increase store sales and customer satisfaction by 20% within the next year. This goal can be achieved through improved product offerings, customer engagement, and brand perception. In the long term, Starbucks aims to establish itself as a community hub, fostering connections among customers while remaining a leader in quality coffee and sustainability in the region.

Our vision is to re-establish Starbucks as a warm, community-oriented space, where customers feel an emotional connection to the brand. By focusing on both product and experiential improvements, Starbucks can retain its premium pricing while ensuring a unique experience that sets it apart from other coffee chains.

Managerial Functions

In managing operations at Starbucks in Saudi Arabia, four primary functions are critical:

  • Planning: This involves setting goals for sales, customer satisfaction, and new product launches while identifying the actions necessary to achieve these objectives.

  • Organizing: The organizational structure must foster flexibility and quick decision-making, ensuring employees are well-equipped and empowered to serve customers effectively.

  • Leading: Leadership entails guiding the team towards achieving the proposed objectives while maintaining high levels of morale and motivation among staff.

  • Controlling: This function includes monitoring performance, adjusting strategies as needed, and ensuring that the operational standards align with the company's goals.

Types of Planning for Management

Starbucks' management structure requires different types of planning at various levels:

  • Strategic planning: Led by upper management, this long-term plan (3-5 years) outlines the overall direction for Starbucks in Saudi Arabia, setting bold goals and market positioning strategies.

  • Tactical planning: Middle management is tasked with translating strategic plans into actionable short-term tactics (1-3 years) regarding resource allocation and marketing campaigns.

  • Operational planning: Supervisors and team leads create specific plans (daily to monthly) for daily operations, staffing schedules, inventory management, and immediate sales strategies.

Theoretical Perspectives of Management

In the context of Starbucks, three management theories can be applied:

  • The Contingency Theory: This perspective emphasizes that there is no one-size-fits-all approach to management. Starbucks should adapt its strategies based on the local market conditions and customer preferences.

  • The Human Relations Theory: This approach highlights the importance of employee satisfaction in improving productivity. By investing in employee well-being and professional development, Starbucks can foster a more engaged workforce.

  • Systems Theory: Starbucks operates as a system where each department influences the overall performance. Understanding this interconnectedness can help optimize operations and enhance service delivery.

Conclusion

In conclusion, by identifying and leveraging competitive advantages, expanding product offerings, and applying essential managerial functions, Starbucks can recover and thrive in Saudi Arabia. By implementing a comprehensive strategy that focuses on both operational excellence and a strong community connection, Starbucks can effectively navigate challenges and position itself as a leader in the coffee industry.

References

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