strategic management -case study (Starbucks and Hyundai )
Please read the two passages on Starbucks and Hyundai posted below.
choose two questions answer on STARBUCKS case and all the questions on Hyundai case.
An Interview with Howard Schultz, CEO of STARBUCKS
Overseeing more than 16,000 stores worldwide, creating a new coffee lingo, Schultz indicates that there are over 70,000 different ways to order a Starbuck’s coffee which makes up the Starbucks experience. Now, seen as a symbol of grandeindulgence, Starbuck’s is struggling. The company has announced the closing of 600 underperforming stores in the U.S. and the need to cut more than 1,000 jobs. Schultz admits that Starbucks may have grown too big too fast given today’s economy and a business plan was not in place for the severity of the economic downturn. Schultz recognizes that such a recession has created more discretionary coffee decision making purchases. Dunkin Donuts, with its expansion, is providing some strong competition by offering an upgraded coffee experience at a lesser consumer cost. When asked if he would bring the Starbuck’s prices down, Schultz maintains that Starbuck’s will not cut corners but will reduce waste to save the company more than $400 million and continue to sell more than a cup of coffee. He says, post 911, that Starbuck’straffic increased because of the need for a sense of community and that they don’t want to do anything to fracture the community experience. He also plans to continue to provide health insurance to all employees including part-time. When asked if Starbucks can keep its mission statement in this economy, he says he is optimistic and realistic and offers would be entrepreneurs this advice: Opportunities can be and have been created during tough economic times. Starbucks was created by believing in big dreams so dream big and dream bigger.
Also check out http://www.starbucks.com/
- Describe Starbuck’s business-level strategy.
- How is Starbucks managing its relationship with customers?
- How would you describe the market segment(s) that Starbuck’s serves?
- Is the differentiation strategy appropriate for Starbucks? Why or why not? Now or in the future?
- Using the five forces model of competition, how should Starbuck’s plan to position itself in these economic times?
HYUNDAI
Hyundai’s strategy is to sell more cars for less than the competition. With the rest of the auto industry in free fall being off 21% from the previous year, Hyundai’s U.S. sales had increased 8%. Michael Brown, Vice President of Atlantic Hyundai’s parent company, a dealership network, indicates that Hyundai has the hot hand with an aim to dominate the marketplace. John Kraftchick, President and CEO of Hyundai Motor American, is interviewed saying that Hyundai’s chairman initiated the move to achieve the highest level of quality in the industry in 5 years. With a quantum leap in quality, Hyundai has new models that are, now, well-equipped, fuel efficient, and stylish. James Bell, analyst for the auto industry’s Kelly Blue Book, reflects upon the first 1986 Hyundai to enter the marketplace. He concludes that Hyundai retrenched and came back stronger by curing their reliability and durability concerns with longer warranties and a blitz of ads that gained consumer public attention. The Toyota downfall is an advantage for Hyundai but Hyundai, too, experienced its own recalls. The Vice President for Hyundai Motor America concludes with their concerns that Hyundai may experience the Toyota woes but it has been a wakeup call. John Kraftchick provides a sneak peek of the newest Hyundai flagship automobile that will compete with the BMW 7 Series, Mercedes Benz S Class, Lexus LS, and those cars that cost $70,000 to over $100,000 dollars. He concurs that Hyundai stands for something different rather than price. While Hyundai remains reactive, they are concerned about vehicles from India, Vietnam, China and other upstarts just like Hyundai once was.
Also check out http://www.hyundaiusa.com/ and http://worldwide.hyundai.com/
- Describe Hyundai’s competitive behavior.
- What kind of competitive dynamics might you expect from Hyundai and other automakers?
- Is Hyundai involved in multimarket competition? Why or why not?
- What impact will market commonality have on competitive responses in the auto industry?
- Can Hyundai be identified as a late mover? If so, why? And what consequences should they be knowledgeable of?
