Starbucks has unveiled a massive global expansion plan, further solidifying its place in the coffee market. Starbucks was founded in 1971 in Seattle, Washington, and has since grown massively. By 2023, Starbucks would like to reach over 55,000 locations internationally. In the near term, 75% of the new stores will be launched outside of the United States. Starbucks’ heightened global focus is a part of the company’s reinvention plan which seeks to simplify operations and improve the speed of service without losing quality. With the increasing complexity of the customer’s order and the “need for speed” expected by mobile app users, demand is growing increasingly hard to manage for the baristas.
Starbucks’ detailed reinvention strategy includes several other aspects. The reinvention strategy is being headed up by their CEO Laxman Narasimhan, who replaced former CEO and founder Howard Schultz in 2022. Starbucks also seeks to cut expenses by $3 billion by reducing costs on the goods sold and increasing efficiency in operations. To increase efficiency, the company is focusing on its processes, which include adding automation and updating store equipment. Per Starbucks’ executives, the company’s plan also includes increasing employee wages and hours.
Discussion Questions:
- What are the benefits of Starbucks introducing automation into their operations? How can this reduce costs?
- Why do you think Starbucks is increasing its presences internationally? What are the pros and cons of this strategy? Explain.
Sources| CNBC: www.cnbc.com/2023/11/02/starbucks-unveils-expansion-plans-cost-cutting.html; Unsplash: Photo by Damiano Baschiera on Unsplash