Topics: Strategic management, Starbucks, Coffee Pages: 2 (615 words) Published: November 9, 2012
StarStarbucks mission is “…to establish Starbucks as the most recognized and respected brand in the world and become a national company with values and guiding principles that employees could be proud of…” However, this mission was threatened in 2008 when the company found itself in trouble with slow growth and profits. Determined to continue its mission, Starbucks reevaluated its resource-based model of returns and made some changes which resulted in increased revenue and above-average returns for the next three years. The key player in Starbucks strategy was Howard Schultz, CEO of Starbucks. Schultz was determined to regain strategic competitiveness and set forth with an integrated strategic management process which focused on several of Starbucks core competencies (like internal culture and human resources) and included: halting new store openings in the U.S.; withdrawing completely from Australia; focusing on customers and the “Starbucks experience;” and transferring resources to international markets. We analyzed the strengths, weaknesses, opportunities, and threats through the TOWS analysis tool which focuses on external (or environmental) threats and opportunities AND internal weaknesses and strengths of the company. In this case, Starbucks’s biggest threat is competition, particularly from McDonald’s and Dunkin Donuts. Opportunities include expanding its product line, particularly into international markets, and diversifying its product line to give customers a better “experience” in AND out of stores. By creating licensing agreements with places like Marriot and Pepsi, and selling retail packs of drinks like Frappucinos in grocery stores, Starbucks increased its diversification. The biggest weakness for Starbucks is its pricing which led to competition with other companies that were offering premium coffee WITHOUT the premium price. Next is Starbucks’s greatest strength: brand name and recognition. In other words, to many people, coffee equals...
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