Starbucks Corporation Strategy

Résumé du document

The following document is an analysis of Starbucks' current strategy, as well as recommendations for the future.

Beginning with a base case analysis, the company is introduced along with varying elements of its current strategy. Topics in this section include a brief history of the company, its performance in recent years and its current strategy including value proposition, goals, product/market focus and core activities.

With the base case established, the key issues are then identified followed by an analysis based on the diamond-e framework. Here the external environment is analyzed using Porter's five forces, and the internal elements are analyzed based on capabilities and resources, management preferences and organization.

The next step is to identify and analyze three options for the company. These options are weighed based on the criteria developed by the diamond-e analysis.
The final section includes the recommendations as to which option or options should be used. More importantly than which options to take, is how they are to be implemented and the potential risks involved with each. These elements are discussed in the implementation plan section. Here we explain how and when these actions should be taken.

Based on our analysis of the company and its current situation, we recognize that change is necessary if it wants to meet its long term goal of becoming the most respected coffee brand in the world.

Extraits

[...] Starbucks has three operating segments; US, an International and Global consumer group and prides itself on educating its customers to appreciate the qualities of fine coffee. It constantly recruits committed and team oriented staff members into its large and geographically scattered workforce. Starbucks implemented a fixed training program to embed the company's values, principles and culture and to impart its knowledge about coffee and its passion about Starbucks. Structurally, the organization is much leveled with only two levels which are identified as ‘Customers and Every Employee'[12]. [...]

[...] Also, Starbucks wants its customers to choose Starbucks to enjoy the relaxing atmosphere with a great cup of coffee. The company also focuses on creating the interaction between its baristas and not customers who just grab the coffee and go Recommendations We recommend that Starbucks choose options 2 and 3. Option to continue the expansion outside the US should not be the focus for a number of reasons. Firstly, it is important to concentrate activities to recapture strength in core markets. [...]

[...] Despite its impressive record of growth customer traffic started to come down in the beginning of 2007 (see Appendix Objective The objective of this paper is to conduct an analysis of Starbucks' current strategy, and give recommendations to the Starbucks management team based with our findings BASE CASE ANALYSIS 2.1 The Company Starbucks purchases and roasts coffee beans of high quality and sells them along with a wide range of related products, such as espresso beverages, pastries and accessories. Furthermore, the company sells bottled coffee drinks and premium ice creams through partnerships and produces premium tea under its fully owned subsidiary, Tazo Tea Company. The primary sales channels are the company-operated stores: 7,087 in the US and 1,796 in the international market. A number of stores, primarily in airports and shopping malls, are operated by franchisees and joint ventures. There are 4,081 such stores in the US and 2,792 in the international market[2]. [...]

[...] According to the past performance of the company, Starbucks has better results in its international operations than in its US operations. The ongoing economic recession seems to have harmed the US more than the rest of the world. Moreover, most of the time, Starbucks enters into overseas business by licensing, which requires a less working capital. As a result, the company can increase its revenue by receiving a royalty fee from the licensees, which makes it less risky to expand overseas. [...]

[...] The company must ensure that the operating outlets are those contributing to the overall profitability of the company Option Return to Key Values and Principles Refocusing on coffee related products and to go back to its basic core values and principles is another option for Starbucks to recover its performance. The rapid growth combined with the introduction of unrelated products (e.g. Starbucks Entertainment) and mediocre food has led to a decline of Starbucks' brand image as the classic coffee house. This image is the company's main key success factor. Starbucks wants to ensure that it is selling topnotch coffee and is giving the Italian coffee house experience to the customers. [...]