Starbucks Coffee - The French flop - publié le 22/10/2010

Résumé du document

Starbucks Coffee is a chain of cafes. The escorted image is the one of the Central Park Perks Café (the one of the TV Show Friends): a warm and cosy place where beautiful young smart and intellectual people are going to relax after a hard work day. A place where you are not leaning at the counter but comfortably seated in armchairs, and where the drinks are not served in a common with cup but in a design bowl or a vintage cup. So giving to the customer the feeling of a non-mass produced coffee.

1987 they sold the Starbucks chain to Howard Schultz. Quickly the brand began to expand and opened its first locations outside Seattle in Vancouver, British Columbia and Chicago (the same year). During 1992-96 the brand knew a great expansion, in 1995 one store per day were opened. It's also this year that Starbucks chairman decided to created a real brand identity (with specific designs, color, furniture). These changes permit to create the “Starbucks Experience”

The first Starbucks location outside of North America opened in Tokyo in 1996. Starbucks entered the U.K. market in 1998 with the acquisition of the then 60-outlet Seattle Coffee Company, re-branding all its stores as Starbucks

Extraits

[...] Thomas Soyer Starbucks Flop iv. Competition's perspective Even the number of had a strongly decrease ( 300.000 to 47000 in 100years), they are still greats competitors and most of the time they surpass in attractiveness. To drink a coffee and commenting the news with the shopkeeper does not have to see with employees of Starbucks. The waiters create and maintain the contact with the consumers, which Starbucks cannot afford due to the will of high turnover. The last survey from Starbucks shows that most of the consumers find the waiters unmotivated and even sometimes unpleasant. [...]

[...] The Starbucks experience has been created for this main target. D. What's wrong? i. Company's perspective According to the data's from Capital, the profits are often under the 1000€ and fall sometimes to in the bad days. Just 3 of them have great results having every day more than 4000€ profits, but it's not enough to compensate the losses from the other. Penalized by insufficient receipts, Starbucks also has to count with higher costs than in the US. Notably in real-estates, to conquer France, the chain wanted to cover Paris before attacking the province. [...]

[...] But Starbucks did not give itself the means to succeed. The “take model for coffee is not popular in France, Starbucks should have done a advertising campaign about increasing the awareness about this way of consumption. Thomas Soyer Starbucks Flop F. Could the product have succeeded if mistakes had been corrected? The fact is that Starbucks launched its filial in the beginning of a world economic crisis. This crisis touched the purchasing power of French and so the money they spend into “leisure”. [...]

[...] Starbucks entered the U.K. market in 1998 with the acquisition of the then 60-outlet Seattle Coffee Company, re-branding all its stores as Starbucks. The Brand is now present all over the world with 16000 Cafés: PortFolio.com The firm launched the first French Starbucks in France in January 2004. B. The objective expected Starbucks opened 41 Starbucks in France (40 in Paris & Surrounding Area; 1 in Lyon). Despite of very attractive location, in town center, near to the underground stations, near to cultural or very famous place and great attendance at the beginning, the company is now facing difficulties with a fall down of the sales. [...]

[...] Customer's perspective It was an ensure success, - with the success of Ally McBeal or the tyrannical Miranda from Devil Wears Prada” - with warm interior design, club armchair, cool waiters and XXL warm drink Yes but Paris make resistance, the paper it's the greatest marketing concept, but maladjusted to the French culture” summarize Bernard Boutboul, director from a survey company specialized into alimentation industry. - The first one comes from the size of the coffee. By a majority French like short, strong and nature black coffee. Then, when Starbucks proposes to the market 87000 available combinations, the consumers don't see the interest of it (and sometimes don't understand anything). Caramel, Macchiato, Moka, White, Con Panna, Frappucino Vanilla or Chocolate, froth? Short-Tall-Grande-Venti? - Another reason is linked to the strangeness from the coffee. [...]