Wait a second!
More handpicked essays just for you.
More handpicked essays just for you.
Starbucks business case study
Business-level strategy of Starbucks
Business-level strategy of Starbucks
Don’t take our word for it - see why 10 million students trust us with their essay needs.
Recommended: Starbucks business case study
Strategic Choices Situational analysis Corporate Level-Strategy: Corporate level strategy is concerned with the selection of business in which the company should compete and with the development and coordination of businesses. It creates value through business in order to ensure success business and competes with rivals. Starbucks corporate strategy has been to establish itself as the premier supplier of the finest coffee in the world, while providing superior delivering services towards their customers. They have proven that by maintaining their promise to their customer as Starbucks a great and proven work environment for every staff member in its retail stores. Starbucks always trying to satisfy its customers through upholds diversity and promises the highest standards for its products. In between, it also serve the community and the environment. Also, Starbucks remain to be profitable although there is slightly slow growth .Starbucks is also being one of the fastest growing companies in the country. However, Starbucks’ coffees price which emphasize high quality coffee beans sells much expensive than other market competitor product. This situation indirectly way creates the opportunity for rivals. Even though Starbucks has high reputation and loyalty customer but there is still others look for cheaper price coffee. Besides, Starbucks pursued retrenchment strategy as they started in July 2008 close stores to reach 600 by the end of 2009.One more strategy should be added to diversify in related business to secure the company, as they depend only on coffee products. Business Level strategy Starbucks is a single business company which more focusing on coffee-related products and retail stores. However, it should focus on more dif... ... middle of paper ... ...now a days. As the internet services convinced for users to access, and easily get the information and details about promotion. It helps to spread the news towards consumers in a short time. By the ways, Starbucks can try others distribute channels such as advertisement board , brochures and road shows which are also the efforts should be imposed to enable the consumers get to know Starbucks. Apart from that, market penetration and market development strategies will enhance the strength through increase the sales and profitability of Starbucks. The way where Starbucks distribute the packaging of Starbucks instant coffee will definitely increase the sales besides satisfying customer demand. However, the guidelines to introduce an accurate mixing level of the coffee in a tea bag style to assist customer provide high quality coffee will definitely increase the sales.
The local cafes are indirect competitors as they do not offer as wide range of beverages, as high quality of products as Second Cup. Considering these differences, the local cafes are not considered to be a threat to Second Cup. The specialty coffee retailer, Starbucks, on the other hand, is a direct competitor because it offers a similar selection of products. The strength of Starbucks is that it is acknowledged all over the world. But the weakness is that Starbucks is always overcrowded. Consequently, Starbucks is a close substitute to Second Cup and pose a significant threat of rivalry. However, Second Cup has a better quality of products, wide range of beverages and offers a friendly and pleasant atmosphere, that may work to the advantage of Second Cup in attracting and retaining consumers. Moreover, the prices of Second Cup products are cheaper. Although Second Cup has a number of competitors including Starbucks and local coffee houses, Second Cup has a competitive advantage in terms of differentiations and brand
In 2002, unexpected findings of a market research showed problems regarding customer satisfaction and brand meaning for Starbucks customers. The situation was unacceptable for a company whose overall objective is to build the most recognized and respected brand in the world. Starbucks was supposed to represent a new and different place where any man would relax and enjoy quality time, alone or with others. But the market research showed that in the mind of the consumers, Starbucks brand is viewed as corporative, trying to expand endlessly and looking to make lots of money. This huge gap between customers' perception and Starbucks' values and goals called for immediate action.
The structure of Starbucks business communication is exceptional. Rather you are in their store buying a Caramel Frappuccino®, visiting their website or watching one of their advertisements on television; as the consumer, the message is loud and clear. Pick up any newspaper and you are likely to find an article about the coffee giant. Starbucks pledges a commitment to their over 172,000 partners (employees) and the community. “We realize our people are the cornerstone of our success, and we know that their ideas, commitment and connection to our customers are truly the essential elements in the Starbucks Experience” (Starbucks, 2008).
This strategic capitalises on weaknesses since will decrease the cost of coffee beans/beverages but also Starbucks operating cost which they regularly ship across the world to various stores. Starbucks can capitalise on this weakness to improve their brand options. It adds value in the inbound logistics activities, operations and procurements. Starbucks should consider this option since it will decrease their operating cost and therefore will reduce the prices on their menu. The attractiveness is the exact same as mentioned in option 1.
Opportunities available to Starbucks include growth of its supplier range, expansion to emerging economies, increased diversification of its product offerings and the growth of its retail operations; which are aimed at growing Starbucks’ profitability and market presence.
Starbucks is currently the industry leader in specialty coffee. They purchased more high quality coffee beans than anyone else in the world and keep in good standings with the producers to ensure they get the best beans. Getting the best beans is only the first part, Starbucks also has a “closed loop system” that protects the beans from oxygen immediately after roasting to the time of packaging. They did this through their invention of a one-way valve which let the natural gasses escape but keeping oxygen out. This gave them the unique ability to ensure freshness and extended the shelf life to 26 weeks. Starbucks isn’t only about the coffee, it’s also about a place where people can escape to enjoy music, reflect, read, or just chat. It is a total coffee experience. The retail outlet has been responsible for much of Starbucks growth and has contributed substantially to their brand equity.
There is speculation that the company was pouring too much capital into its complex system of joint ventures and licensing agreements, and could not get a hold of its operational costs. They decided to source some of their merchandise and disposables to less expensive suppliers as an immediate cost-cutting measure. They also decided to cut back on the number of new stores and shut down unprofitable ones. Starbucks has had to learn the hard way that external forces go far beyond a society's taste in coffee, and that too much growth can have negative effects.
Koehn, N.F., Besharov, M.A., & Miller, K. (2008). Starbucks Coffee Company in the 21st Century. [Case study]. Boston, MA: Harvard Business School Publishing.
As with any company considering new products in new markets, there are risks associated with it, and Starbucks would need to be prepared to respond accordingly. With diversification, Starbucks will have the opportunity to increase its growth. Also, this strategy will permit the company to add related or unrelated products to its existing business. This will be the opportunity the company needs in order to expand its products, by offering new products to its customers. If Starbucks is considering diversifying, it’s essential to adopt a strategy that is fitting for the company....
Starbucks Financial Analysis Company Overview Starbucks is the world’s largest specialty coffee retailer, with more than 16,000 retail outlets in more than 35 countries. Starbucks owns more than 8,500 of its outlets, while licensees and franchisees operate more than 6,500 units worldwide, primarily in shopping centers and airports. The outlets offer coffee drinks and food items such as pastries and confections, as well as roasted beans, coffee accessories, teas and a line of compact discs. The company also owns the Seattle's Best Coffee and Torrefazione Italia coffee brands. In addition, Starbucks markets its coffee through grocery stores and licenses its brand for other food and beverage products.
In order to build and maintain their competitive advantage, Starbucks has used multiple support strategies. They have well designed stores that are visually pleasing and welcome everyone through firm infrastructure. Human resource management provides good benefits and helps with the college achievement plan, and internships. The company has expanded its technological developments by adding WiFi, phone charging stations, high-tech coffee machines, and developing a mobile app. Through procurement, Starbucks has been able to reorganize its supply chain, reduce costs, improve execution, and lay the foundation for future supply chain capability. Starbucks’ primary activities lead to the creation of the product and excellent service they provide. Through inbound logistics, they select the finest quality coffee beans and do not outsource procurement to ensure quality. They operate and provide their great customer service in over 65 different countries and use outbound logistics by selling all of their products in licensed stores only. Finally, they focus on superior marketing and sales to sell their products
Starbucks is a worldwide company, known for is delicious brews of coffee and seasonal varieties of tasty drinks for any occasion. Starbucks opened with two main goals, sharing great coffee with friends and to help make the world a little better. It originated in the historic Pike Place Market of Seattle, Washington in 1971 by Jerry Baldwin, Zev Siegl and Gordon Bowker. The creation of Starbucks’ name came from the seafaring tradition of early coffee traders and the romance evoked from Moby Dick. At the time, this individual shop specialized in the towering quality of coffee over competitors and other brewing services enabling its growth to becoming the largest coffee chain in Washington with numerous locations. In the early 1980s, the current CEO Schultz saw an opportunity for growth in the niche market. After a trip to Italy he brought back the idea of a café style environment of leisure and social meetings to the United States we now see in Starbucks locations today. Schultz ultimately left Starbucks to open his own coffee shop, Il Giornale which turned out to be a tremendous success. Fast forward a year later, Schultz got wind that Starbucks was going to sell all their components of Starbucks including their stores and factories, he immediately acquired the funds to buy Starbucks and linked both operations. Within five years he was able to open more than 125 stores starting in New England, Boston, Chicago, and gradually entered California. He wanted Starbucks to be a franchise system based on the mission of telling the truth and emphasize the quality,
In addition to being best-known supplier of the finest coffee and promising only the highest quality products, Starbucks emphasizes firm values, provides guidelines to enhance employee self-esteem. This is to ensure continued customer satisfaction. Moreover, diversity has become a priority to providing an inviting environment to all consumers. Starbucks continues to abide by a strict, slow growth policy in which they set out to dominate a market before moving on to expand, thus history has shown this strategy to be successful for Starbucks, making them one the fastest growing companies nationwide.
With clear core values towards providing quality coffee, the best service, and atmosphere, Starbucks has enjoyed great success since it was founded 30 years ago. The company has being doing very well for last 11 years with 5% or more store sales increase, even with the rest economy still reeling from the post-9/11 recession. However recent research, conducted to Starbucks, have showed some concerns regarding company’s problem meeting customers’ expectations.
The strategic vision that Howard Schultz had for Starbucks was "Establish Starbucks as the premier purveyor of the finest coffee in the world while maintaining our uncompromising principles while we grow". This s...