Answered: Using the above scenario as a guide…

Understanding Business

12th Edition

ISBN:9781259929434

Author:William Nickels

Publisher:William Nickels

Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment

Section: Chapter Questions

Problem 1CE

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Transcribed Image Text:Question 5 A leaked internal Starbucks memo written by founder Howard Schultz showed that he recognised 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 neighbourhood store." Starbucks tried to add value through innovation; offering Wi-Fi service and creating and selling its own music. More recently, Starbucks attempted to put the focus back on coffee, revitalising the quality of its standard beverages. But 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. You either cut the price (and that implies a commensurate cut in the cost structure) or you cut distribution to restore the exclusivity of the brand. discuss Using the above scenario as a guide 'Globalisation and the Global Economy' as a variable influencing contemporary organisations to change. on Starbucks

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