Starbucks: Problems and Causes of Crisis during Recession Essay

This climate change effects the stardust’s coffee bean supply and causes shortage on supply demand. Lost Trust of Customers In 2010 Struck has come under pressure for its use of cochineal extract in the company’s strawberry flavoring. The extract is dried blood from crushed female cochineal beetles and is used as an ingredient in reddish-colored foods and beverages including fruit drinks, ice creams, yogurts and candies. In the case of Struck, a coffee maker, who also is vegan, published a photo n web with a list of ingredients in the strawberry sauce.

This information effects the customer’s trust on Struck. Because prior to this, many vegans (those who don’t consume dairy or animal products) and vegetarians believed that, when ordered with symbolism, Struck’ Strawberries & Creme Production, as well as its Strawberry Smoothies, were free from animal products. Resolution of Crisis Struck Plans for change Due to overcome the crisis, Struck pre plan their management structure. Six hundred stores decided to close, three times more than had first been suggested.

It is represented 8 percent of company-owned and operated retail group. Most distressing approximately 12,000 positions, or 7 percent of global workforce would be eliminated. In addition, Struck would take $340 million in expected pre-tax charges, including $200 million in asset write offs and another $130 million associated with terminating the stores’ leases. This is how Struck fix the business costs. Limited Coffee Bean Supplier To overcome the shortage on coffee bean, Struck introduced some co- products and other drinks.

The blended drinks or espresso and the closest bustiest of coffee is the tea which is being sold out by Struck under Taco Tea Brand. Struck focus on fresh and tastier baked foods too to balance the coffee demands. Thus, elasticity has increased in Struck with the variety of substitutes available to consumers offering the same product: premium coffee, friendly staff, and a comfortable environment. For this reasons, Struck successes on the coffee business even with limited coffee bean supply.

Lost Trust of Customers To overcome the “lost of trust” due to its use of cochineal extract in the Meany’s strawberry flavoring , Struck acknowledged that the dye used in certain products contained the cochineal dye. And Struck reported that the company did a thorough evaluation and decided to remove it from the ingredient list The Struck Com pane took notice of the influx of negative feedback for the use of cochineal dye and announced the change on their company bolo. The evaluation and consideration of feedback from loyal consumers prevents the issue from becoming a crisis or creating any negative media attention.