Starbucks’ Growth Destroyed Brand Value Leadership & 353950

Starbucks’ Growth Destroyed Brand Value Leadership & Managing People

Starbucks announced it would close a few stores in Saudi Arabia, admitting limitations to its growth. The founder Howard Schultz recognized 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 neighborhood store.” Starbucks attempted to add value through innovations like Wi-Fi service, creating and selling its own music, and revitalizing the quality of its beverage offerings. However, these initiatives did not address the fundamental issue: Starbucks is a mass brand trying to command premium prices for an experience that is no longer considered special. To recover and expand its operations in Saudi Arabia, strategic action is necessary, focusing on core strengths, product innovation, and aligning operational goals with a renewed brand identity.

Paper For Above instruction

As the newly appointed CEO of Starbucks in Saudi Arabia, my primary goal is to revitalize the brand’s presence and ensure sustainable growth within the Kingdom. To achieve this, the first step involves identifying the company’s core competitive advantages. Starbucks’ competitive edge lies in its unparalleled global brand recognition, its ability to create a premium coffee experience, and its vast store network that offers convenience and accessibility to consumers. The company’s emphasis on premium quality beans, specialized brewing techniques, and consistent customer experience establish a strong differentiation from local competitors or other coffee chains. Furthermore, Starbucks’ extensive loyalty programs and innovative store formats add value, fostering customer retention and loyalty (Kelley & Krieger, 2020).

In addition to leveraging its core competencies, Starbucks can expand its product offerings and services tailored specifically for the Saudi Arabian market. Currently, the company can implement localized menu options that cater to regional tastes, including traditional Middle Eastern beverages or flavors. Offering premium tea varieties, health-conscious options like sugar-free or organic beverages, and seasonal specialty drinks can attract diverse customer segments. Apart from the core coffee products, Starbucks can introduce exclusive merchandise, such as locally inspired gift items or coffee-related accessories, to enhance store experience and brand affinity. Furthermore, integrating digital services such as mobile ordering, contactless payments, and delivery options will meet the rising demand for convenience (Smith, 2021). The company should also develop loyalty-driven experiences by offering tiered rewards programs and personalized marketing, which have proven effective in many markets (Johnson & Clark, 2021).

The business objectives for Starbucks in Saudi Arabia should aim at consolidating its market leadership and achieving sustainable growth. A primary goal is to increase the number of stores by 20-30% over the next five years, focusing on both urban centers and emerging cities. This expansion should be complemented by investments in staff development, emphasizing cultural sensitivity and customer service excellence. The company’s vision should revolve around becoming the most admired coffee brand in the Kingdom—delivering high-quality coffee and memorable experiences while supporting local communities through ethical sourcing and social initiatives. Strategic goals should include strengthening brand loyalty, expanding product diversification, and developing Digital-first customer engagement strategies. These objectives align with the long-term vision of fostering community-centric store environments that resonate with Saudi cultural values while maintaining Starbucks’ global standards (Alabdulkarim and Smith, 2019).

Applying the four managerial functions—planning, organizing, leading, and controlling—is essential in executing these strategies effectively. Planning involves setting clear goals like expansion targets, product innovation timelines, and marketing campaigns aligned with regional traditions and preferences. Organizing requires restructuring teams to include local talent and cultural experts, ensuring store layouts and service styles resonate with Saudi consumers. Effective leadership entails motivating staff, promoting a customer-centric culture, and fostering innovation. For controls, establishing performance metrics such as customer satisfaction scores, sales growth, and brand awareness levels help monitor progress and guide adjustments. By integrating these functions, Starbucks can establish a resilient operational framework in Saudi Arabia (Daft, 2018).

Management in Starbucks must also adopt appropriate planning strategies at different organizational levels. Strategic planning, with a time frame of 3-5 years, should define overall growth and market positioning goals. Tactical planning, covering 1-3 years, should focus on product launches, marketing campaigns, and staff training programs. Operational planning, within weeks to months, ensures daily store management, inventory control, and customer service standards are met efficiently. Each level of planning supports the others; long-term vision guides tactical initiatives, which in turn inform day-to-day operations. This layered planning approach enables the company to remain adaptive and responsive to dynamic market conditions in Saudi Arabia (Bryson, 2018).

Various theoretical perspectives on management further clarify the strategic approach needed for Starbucks. Classical management theory emphasizes the importance of structure, standardized procedures, and efficiency—critical for maintaining consistent service quality across all stores. Human relations theory highlights the importance of employee motivation and customer experience, which can foster brand loyalty. Modern contingency theory argues for flexibility and adaptation based on external environmental factors, such as cultural nuances and competitive pressures in Saudi Arabia. Lastly, transformational leadership theory underscores the role of inspiring employees and stakeholders toward a shared vision, especially vital during a turnaround or expansion phase. These perspectives collectively justify adopting a hybrid management approach that balances efficiency, employee engagement, adaptability, and visionary leadership (Robbins & Coulter, 2019).

In conclusion, Starbucks’ recent challenges in Saudi Arabia necessitate a comprehensive strategic revision rooted in core competitive advantages, product innovation, and local cultural integration. By aligning its business objectives with effective managerial functions and layered planning, Starbucks can reignite its brand value and achieve sustainable growth. Emphasizing leadership that fosters innovation and responsiveness to market needs, along with a strong emphasis on customer and employee satisfaction, will be critical. The company’s ability to adapt its management strategies to fit the unique Saudi market, leveraging its global expertise while respecting local traditions, can position Starbucks for long-term success and restore its premium brand status in the Kingdom (Cayton & Zikmund, 2016).

References

  • Alabdulkarim, S., & Smith, J. (2019). Market Expansion Strategies for International Coffee Chains in Saudi Arabia. Journal of Business Strategy, 40(5), 45-59.
  • Bryson, J. M. (2018). Strategic Planning for Public and Nonprofit Organizations. Jossey-Bass.
  • Cayton, L., & Zikmund, W. (2016). Strategic Management. South-Western Cengage Learning.
  • Daft, R. L. (2018). Management. Cengage Learning.
  • Johnson, G., & Clark, S. (2021). Strategic Customer Relationship Management. Routledge.
  • Kelley, S., & Krieger, L. (2020). Branding Strategies in the Coffee Industry. International Journal of Marketing, 53(2), 205-223.
  • Robbins, S. P., & Coulter, M. (2019). Management. Pearson.
  • Smith, A. (2021). Digital Transformation in the Coffee Service Industry. Journal of Business Innovation, 10(4), 112-120.

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