ffee and bagels. At the end of 1998 New World had franchised, licensed, or owned 335 stores in 18 states, Washington, DC and internationally. New World is growing very rapidly. On Aug 12, 1999 New World reported a %668 increase in second quarter earnings.V. Alternative SolutionsThere are three basic strategies Starbucks could implement to improve there position as the leader in specialty coffee sales. The first is a pricing and/or promotion campaign. For years, Starbucks has relied on word of mouth to build their customer base. But with such an aggressive expansion track, Starbucks could benefit from some instant exposure to introduce themselves to those in new areas that have not heard of Starbucks. While this is a viable alternative, it is not the one of choice. Starbucks has a history of creating a clientele rather than advertising for one. Temporary pricing promotions seem to contradict the lifestyle choice of Starbucks customers. Starbucks coffee is a quality product offered at a higher price for customers who appreciate it and can afford it. Another direction the company could go would be to cut expansion and decrease the channels of distribution of their products. Starbucks has expanded at a torrid pace of more than a store a day in 19xx. Each new store costs the company $315,000 to build. Starbucks is moving fast into many different areas of distribution as well. Their coffee is now being sold in grocery stores and even on the Web. Starbucks runs the risk of over exposing itself to the public, and with so many different channels of distribution, may even curtail customer traffic in their own stores. However, long term debt for the company has been more than held in check. Starbucks owes less than #### in long term debt and of the 1500 new stores opened in 1997, only two have since been closed down. And in 1997 new stores generated an average of $700,000 in sales compared with new stores in 1992 at $427,000. Starbucks should c...
