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  • Trouble Brews at Starbucks

    After going public in 1992, Starbucks' strong balance sheet and double-digit growth made it a hot growth stock. The Starbucks vision was coffee culture as community, the Third Place between work and home, where friends shared the experience and exotic language of gourmet coffee. Its growth was fueled by rapid expansion in the number of stores both in the United States and in foreign markets, the addition of drive-through service, its own music label that promoted and sold CDs in stores and other add-on sales, including pastries and sandwiches. In an amazingly short time, Starbucks became a wildly successful global brand. But in 2007, Starbucks' performance slipped; the company reported its first-ever decline in customer visits to U.S. stores, which led to a 50 per cent drop in its share price. In January 2008, the board ousted CEO Jim Donald and brought back Howard Schultz - Starbucks' visionary leader and CEO from 1987 to 2000 and current chairman and chief global strategist - to re-take the helm. Starbucks' growth strategies have been widely reported and analyzed, but rarely with an eye to their impact on the brand. This case offers a compelling example of how non-brand managerial decisions - such as store locations, licensing arrangements and drive-through service - can make sense on financial criteria at one point in time, yet erode brand positioning and equity in the longer term. Examining the growth decisions made in the United States provides a rich context in which to examine both the promise and drawback of further foreign expansion.
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  • Trouble Brews at Starbucks

    After going public in 1992, Starbucks' strong balance sheet and double-digit growth made it a hot growth stock. The Starbucks vision was coffee culture as community, the Third Place between work and home, where friends shared the experience and exotic language of gourmet coffee. Its growth was fueled by rapid expansion in the number of stores both in the United States and in foreign markets, the addition of drive-through service, its own music label that promoted and sold CDs in stores and other add-on sales, including pastries and sandwiches. In an amazingly short time, Starbucks became a wildly successful global brand. But in 2007, Starbucks' performance slipped; the company reported its first-ever decline in customer visits to U.S. stores, which led to a 50 per cent drop in its share price. In January 2008, the board ousted CEO Jim Donald and brought back Howard Schultz - Starbucks' visionary leader and CEO from 1987 to 2000 and current chairman and chief global strategist - to re-take the helm. Starbucks' growth strategies have been widely reported and analyzed, but rarely with an eye to their impact on the brand. This case offers a compelling example of how "non-brand" managerial decisions - such as store locations, licensing arrangements and drive-through service - can make sense on financial criteria at one point in time, yet erode brand positioning and equity in the longer term. Examining the growth decisions made in the United States provides a rich context in which to examine both the promise and drawback of further foreign expansion.
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  • Motorola and the RAZR

    In a few short months, Motorola went from the darling of the cell phone market-"the cool innovative company with quality to match," according to CEO Ed Zander-to the famously high-share, but unprofitable, handset manufacturer it became by early 2007. Both identities derive from the management of and profitability of the RAZR handset. At introduction, the RAZR was priced at $500-$800; by 2007, it was often free with a service contract. But new Chief Marketing Officer Casey Keller sees a future for the RAZR: "The company plans to maintain the RAZR as a premium brand with frequent upgrades, instead of allowing it to become commoditized and eventually fade away."
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  • Wal-Mart Tries on Cheap Chic

    Wal-Mart is at a crossroads. Its positioning as the world's largest, low-price retail leader is being undermined by higher operating costs and slower sales growth. The solution, according to President and CEO Lee Scott, is to get middle-class consumers who shop the store selectively for grocery and personal care items "to cross the aisle" for higher-margin fashion goods. But Wal-Mart's attempts at entering Cheap Chic-the fashion category dominated by competitors such as Target and H&M-have been undermined by strategic decision focused on operational efficiencies and a lack of understanding of branding nuances.
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  • Competitive Advantage through Channel Management

    This case provides a synopsis of three companies-Dell, Inc., IKEA, and Seven-Eleven (Japan)-that has developed a competitive advantage through channel management. Each case highlights the company's focus on customer relationships and how the channel is designed to maximize customer service. Examples illustrate how these companies think "outside the box" in their selection of channel partners and in the sequencing and assignment of the activities involved in product design, production, and transfer. They also illustrate how closely these companies work with their suppliers in order to coordinate activities and reduce channel cost. The net effect is a more efficient channel designed to serve the customer more effectively.
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