Please answer the following questions, using both qualitative and quantitative analyses where relevant:
- What is the situation that Starbucks is facing?
- Would you recommend making the $40 million expenditure? If so, why? If not, why not? Please make sure to support your analysis quantitatively and qualitatively.
- Is spending to hire more employees the most effective way to improve performance? Is there a different area in which Starbucks should invest? If you recommend not making a monetary investment, what course of action would you recommend Starbucks undertake?
FURTHER INSTRUCTIONS/GUIDELINES/NOTES:
- You should submit a concise (i.e., no more than 4 pages single-spaced) Word or PDF document that provides your answers to the 3 prompt questions above. Please enumerate each of your responses so that it is clear which question you are answering.
- More guidelines on each question:
- Q1: What is the situation that Starbucks is facing? >> This first question is high-level, strategic, and qualitative. We are asking you to analyze the strategic marketing situation that Starbucks is facing in the case. You should analyze the Starbucks situation in terms of its brand and value proposition for its different customer segments. What is the dilemma that Starbucks is facing?
- Q2: Would you recommend making the $40 million expenditure? If so, why? If not, why not? Please make sure to support your analysis quantitatively and qualitatively. >> Here you will want to use relevant data from some of the Exhibits in the case and relevant information from the main case text to help construct, build, and substantiate your answer—that is, to justify why you think the $40 million annual investment is or is not worth it for Starbucks. You will need to do some calculations using these data.
- Q3: Is spending to hire more employees the most effective way to improve performance? Is there a different area in which Starbucks should invest? If you recommend not making a monetary investment, what course of action would you recommend Starbucks undertake? >> This question allows some additional room for creativity in terms of formulating ideas for a marketing strategy.
- You can apply CLV (at a basic level; no full model is necessary). Applying behavioral economics in this assignment is not needed.
- Segmentation is important to this case; in particular, the session with Gary on STP will be relevant to this assignment.