Week 3 - 4

A. How would you do it? Expanding a business

More than a good cup of coffee.  The secret of Starbuck's success

Listen to the following audio, read the company's overview and timeline and answer the questions below:

Company overview: http://www.starbucks.com/assets/9a6616b98dc64271ac8c910fbee47884.pdf

Timeline: http://www.starbucks.com/assets/e56b2a6b08244aaab0632dc6ac25ad0d.pdf

Audio File link: http://www.businessenglishstudy.com/mp3/10-intermediate.mp3


Questions:

1. What is the background of the founder of Starbucks, Howard Schultz?
2. How does Schultz's trip to Italy play a role in the history of Starbucks? What did he want Starbuck to become?
3. What are the three principal's of Starbuck's success according to Schultz?
4. What is so attracting about Starbucks? Is it the coffee or something else? If something else, please describe
5. What is the similarity between Starbucks and McDonald?
6. Why are so many business people going to Starbucks?

Extra: interesting article of an interview with Howard Schultz and his views about marketing: http://www.marketingmagazine.co.uk/article/981327/starbucks-chief-executive-howard-schultz-marketing

B. Starbucks Marketing Strategy

Watch the following video giving a quick overview of the company and its marketing strategies

Now that you have a good understanding about Starbucks, it's time to plan its expansion in France including Montpellier.

1. Are there any cultural clashes between Starbucks and France?
2. Would you modify their marketing strategy in Europe and if so, how would you modify their strategy to succeed in Montpellier?.
3. What would be the strong arguments for the population in Montpellier to turn to Starbucks? What's attractive about Starbucks from a French point of view?
4. What's your conclusion regarding the secret to Starbuck's success in France outside of large cities like Paris?
5. What would be important for Starbucks to consider in their French market expansion plans to achieve sustainable growth?

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C. Crisis Managment: what do I do now?

Situation: according to confirmed reports from local health agencies, 5 customers became very ill after eating pastries from 2 different Starbucks shops in San Francisco, California. The people were hospitalized and are now in stable condition. They all complained of severe stomach pain.

Unknown: there are several unknown aspects of this crisis at this point:

• The exact cause of the problem. (pastries or something else)
• Extend of this problem. Just in SF?
• Supplier involved

What do we do know? Let's plan a quick plan and then start writing internal memos and press releases about the handling of this crisis.

Read the following article about companies that handled their crisis like pros: http://www.businessinsider.com/pr-disasters-crisis-management-2011-5?op=1


Need some help with press releases? Browse through the following article for some tips: http://smallbusiness.chron.com/write-crisis-communication-press-release-55282.html and watch the following video: http://smallbusiness.chron.com/steps-writing-press-release-79021.html

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Homework: and update to the case

1. After a couple of weeks of investigations, local officials withthe support from the Health and Food Administration, established that the food poisoning of 10 people in the San Francisco Bay area on the weekend of August 23rd was due to th existance of harmful bacteria in the frosting of some of the cupcakes sold at Starbucks from a local producer.  The local producer, Sweething with the help of Starbucks has launched an investigation to find how and why the baked goods were contaminated. 
2. All 5 people have fully recovered and it is not expected that they will sue the company for damages.
3. According to Starbucks headquarters, sales in shops around the Bay Area have declined by 25% due since the first report of the food poisoning case. Starbucks around the US have reported a smaller decline in sales given that the company only uses local producers, thus minimizing the risk of spreading the contamination of goods to other stores. 

Based on the latest case update above, do a write-up including the following elements:

1. A press release taking responsability for the incident and explaining how Starbucks will insure that this does not happen again. What measures will Starbucks take going forward? (Max 5-6 lines)
2. The content of an ad in a local newspaper to apologize to all Starbuck's customers. (4 lines max.)
3. Your recommendation on what Starbucks should do to stop the bleeding (sales decline) and regain the confidence of its loyal customers. (5-10 lines max)