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Strategic management questions
Strategic management questions
Explain components of strategic management and discuss how critical each
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Starbucks' Business Strategies 1. What are the key elements of Starbucks? strategy as of 2004? The key elements of Starbuck?s strategy were as follows: a. Grow the business by constantly adding more stores around the world: The Company has had tremendous success in opening stores around the world. It has applied its global strategy effectively and has enjoyed increase in sales from global operations. b. Store design, planning and construction are also part of the strategy. The company began to create its own in house architects and designers to design Starbucks locations. Locations are designed for customers to meet, relax or simply enjoy a peaceful interlude in their day. Each location was designed to signal ?best of class? and to reflect the personality of the community and the neighborhood. c. Product Line: The Company has a vast product line and is constantly engaging in efforts to develop new ideas, new products, and new experiences for their customers. d. Employee selection and training are also elements of the strategy. Starbucks employed diverse people which reflected the community. Starbucks trained each employee to perform to their best capabilities. e. Increasing sales by new means of selling: Starbucks indulged in mail order sales. It published a mail order catalog that was distributed 6 times a year. It also has an electronic store on the internet though which Starbucks sells its products. f. Joint ventures and Licensing: Starbucks entered in to joint ventures with PepsiCo and Dreyer?s Grand Ice Cream. It also has licensed agreements with Marriott Host International, Horizon Airlines, United Airlines, Nordstrom?s, Barnes & Noble book store and Wells Fargo Bank. 2. What grade would you give Howard Schultz for the job he has done as CEO of Starbucks? Be prepared to support your answer based on how well (or not so well) he has performed the five tasks of strategic management discussed in Chapter 2. I would give Howard Schultz a grade of A for the job he has done as the CEO of Starbucks. He has successfully performed all the 5 tasks of strategic management discussed in Chapter 2. 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... ... middle of paper ... ...bove. This is the primary factor that would be a concern to the management of Starbucks. 6. What recommendations would you make to Howard Schultz to sustain the company?s growth and support continued strong financial performance in the years ahead? I would recommend the continual implementation of the current strategy. The strategy is working and there is no reason to deviate from it. The company has been very successful in expanding its operations in other countries. I would recommend that the company continue to do that. I would also recommend spending extra resources in the development of new products to keep a competitive advantage over other competitions. The competition is only going to rise because the market has not reached saturation yet. In order to stay ahead of the competition, the company needs to keep researching new products, and stay in sync with the ever changing technology. Sources: 1) http://www.article13.com/A13_ContentList.asp?strAction=GetPublication&PNID=194 2) http://quicktake.morningstar.com/Stock/Income10.asp?Country=USA&Symbol=SBUX&stocktab=finance 3) http://www.mhhe.com/business/management/thompson/11e/case/starbucks-2.html
The book begins with a thorough description of Schultz’ upbringing, and he reveals that, “As the oldest of three children, I had to grow up quickly and started earning money at an early age” (P15). He also tells readers that his widowed mother encouraged him, “To challenge myself, to place myself in situations that weren’t comfortable, so that I could learn to overcome adversity” (P 16). Clearly, by the time Schultz had reached his teenage years he had experienced incredibly unfortunate circumstances, and yet had emerged as a hardworking and driven individual, determined to do bigger and better things. By 1982, Howard Schultz had quickly attained a respectable position at Hammarplast, a division of Perstorp; however he left and moved to Seattle quickly, because he “Saw Starbucks not for what it was, but for what it could be” (P 5). Schultz absolutely fell in love with Starbucks, and understood how incredibly marketable high-quality coffee could be; before other retailers and individuals caught on. His entrepreneurial spirit found a perfect application when he was introduced to Starbucks, and upon tasting the product and seeing the company in Seattle he told his wife, “I know where I want to live: Seattle Washington. It was my Mecca. I had arrived” (P 28). Schultz found what he had always
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).
Question 1:When Howard Schultz launched Starbucks, who was the target market and how was Starbucks positioned to appeal to this target market?
Starbucks continued its expansion throughout the late 1980 and beyond. In 1991, Starbucks became the first privately owned U.S. Corporation to offer stock options to part time employees (Starbucks timeline and history, 2004). In the early 1990s Starbucks started setting up coffee shops in Nordstrom¡¦s department stores, Barnes & Noble bookstores and ITT/Sheraton hotels. In 1995, the corporation began selling compact discs and formed an alliance with the Canadian bookstore, Chapters Inc.
Howard Schultz’s first experience was similar as most customer that walk into a Starbucks store. When he first walked into a Starbucks Coffee Company Store in 1981 he fell in love. Schultz did not fall in love with carefully chosen coffee beans that make the coffee, similar to new Starbucks customers.
Starbucks began its retention plan by analyzing their employees’ needs. The analysis drew variables of importance, such as positive culture, employee development, and benefits. As a result of the analysis, Starbucks CEO, Howard Schultz, came up with a plan to start a long-term retention program in his company. Mr. Schultz made sure that “he made it a point to put himself at the top of a respect pyramid in which he would be sure to be kind to everyone in the company with whom he interacted, with them passing on the respectful treatment, right down to the pyramid’s base”(“How Starbucks retains its employees”). The company also set up an online portal for employee development. Starbucks also launched a program to help its employees to achieve a college education. This educational program sends employees to Arizona State’s online program, providing juniors with free tuition and sophomores with financial aid. As a result of this initiative, Forbes (2015) has named Starbucks as one of “America’s Best
Business was good, but it was not without its problems. There was the political upheaval in the Middle East, followed by further tension after then CEO Howard Schultz commented on growing anti-Semitism in the region. Their integrity came under fire when certain Non-Governmental Organizations (NGO's) accused them of purchasing coffee beans under questionable social and economic conditions. These situations, together with difficult economic times globally, meant that Starbucks was likely going to take a hit somewhere. Eventually, they shut down their Israeli operations altogether.
Hottovy, R.J. "SBUX : Starbucks Corp Analyst Report | Analyst Report." Starbucks Is Well Positioned to Leverage Its Brands into a Global Multichannel Growth Story. Morning Star, 25 Apr. 2014. Web. 29 Apr. 2014.
Starbucks takes their partners very seriously as well as their well-being. This is apparent in the rewards Starbucks offers to their partners. Starbucks has what they refer to as, “Your Special Blend” which is offered to part-time and full-time partners. Starbucks offers comprehensive health coverage, a highly competitive 401(k) program with company matching, a stock equity reward program, education benefits including tuition assistance, free coffee, and paid vacation (Your Special Blend: Rewarding Our
Kluyver (2010) mentions that Starbucks maintains sole decisions making power over “brand, product line advertising and corporate communication”. Although though the choice o...
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.
According to the Seattle Business Wire (as sited in Starbucks Coffee Company, 2015), the president and CEO of Starbucks, revealed to shareholders a vision for transforming the operation of his company in 2008 which involve the customer experience and reaffirm the company’s growth potential. He revealed that a five initiative strategy that he is directing the company towards will bring the company to a new level of quality (Starbucks Coffee Company, 2015).