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Starbucks Planning Case Study

Starbucks Planning Case Study

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Published by mehboobmeghani
Starbucks Planning Case Study Discussion Question & Answers.
Starbucks Planning Case Study Discussion Question & Answers.

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Published by: mehboobmeghani on Apr 08, 2010
Copyright:Attribution Non-commercial


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CASE STUDY:Starbucks - Planning
Planning is the foremost need of every business organization. It is done at all levels of management. No matter what type or extent of planning a manager does, the important thingis that planning takes place.Starbucks has many stores in almost 37 countries. Starbucks long term goal is 15,000 US storesand 30,000 stores globally and to earn a good amount of revenue of 20 to 25% from them.Starbucks has an even glitzier goal which takes it beyond its coffee roots and in helping definesocietys popular culture menu.Starbucks is considered as the most dynamic retail brand. It has been able to become a GlobalBrand Leader by reinventing the coffee experience. Starbucks gave US the Café life whichdidnt existed before. Starbucks has changed our tastes, our lifestyles and penetrated in us bybecoming part of the popular culture. Starbucks covers a broad base of customers from urbanprofessionals to clerical assistances; Starbucks has found a way to appeal everyone despite of its high prices.Starbucks broad strategy is to grow into a global empire and any new change is done withgreat care and planning. Growth strategies are made to exploit customer connection.Starbucks sells a lot of items and has grown beyond coffee into related businesses and they doso by developing these products with other companies. Company also launched the Prepaidcards as well and it was very successful because the company has made it easy to purchase,reload and use for the customers. The company is finding innovative ways to get the prepaidcards into potential customers.Companys another successful brand extension was music. Schultz thought that the music hasalways been a part of café house experience. The company launched the Hear Music Café inSanta Monica, California.At these stores, customers burn their own compilation CDs. Starbucks then decides toselectively link Star bucks brand with certain kinds of movies.Despite many successes, Starbucks encountered some failure as well like its magazine, acarbonated coffee beverage called Mazagran and some Italian cafes which didnt meet thegoals it set for them.Starbucks is still coming up with some new & innovative ideas.
Q.1) Star bucks have some pretty specific goals it wants to achieve. Given this, do you thinkmanagers would be more likely to make rational decisions, bounded rationality decisions orintuitive decisions? Explain.
Specific goals are goals that are clearly defined and leave no room for interpretations. Theresno ambiguity because the objectives are clearly defined. There are three ways managers canmake decisions:1.
RATIONAL DECISIONS:In these decisions, managers make consistent, value-maximizing choices where the problem isclear & unambiguous. Simple, well defined goal is to be achieved. Preferences are clear,constant and stable. Managers know all possible alternatives & consequences and the decisionsmade are in the best interest of an organization.2.
BOUNDED RATIONALITY:They make decisions rationally but are limited (bounded) by their ability to process information.The managers satisfice, rather than maximize. That is, they accept solutions that are goodenough.3.
INTUTION:It is the decision making on the basis of experience, feeling and accumulated judgments. Such amanager doesnt go for systematic analysis of problem or evaluation of alternatives but insteaduses his experiences & judgment to make decisions.From my point of view, managers in Starbucks are more likely to make bounded rationaldecisions instead of rational or intuition because they cannot possibly analyze all informationon all alternatives and know all outcomes. They accept decisions that are good enough. Theymake decisions rational, but are limited by their ability to process their info. Any growth thatStarbucks pursues is done with great care and planning but they are being rational within thelimits.

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