Starbucks Case Study

Topics: Coffee, Starbucks, Risk Pages: 7 (1893 words) Published: March 24, 2010
“The Boston Consulting Group (BCG) matrix is enhancing a multidivisional firm’s efforts to formulate strategies” and are including Question Marks, Star, Cash Cows and Dogs Starbucks is applying this matrix to identify the each stores strategic position.

In division Question Marks, shows low relatives market position but high growth industry. Firms cash needs are high and cash generation is low. This division decides to strengthen on pursuing an intensive strategy. Division Stars is the best long-run opportunities for growth and profitability. This stage is maintaining or strengthening their dominant positions. Next in are Cash Cows with control and manage for high relative market share position but compete in a low growth industry. Finally, in Dogs have low relative market share position and no market growth industry. This divisional are weak into internal and external position and often retrenchment, divestiture and liquidation. Retrenchment is the best strategy because can reduce cost and expenditures to become viable, profitable divisions.

Besides that, between the years 2003 to 2005 Starbucks Income Statements shows the net revenue were $4075,000 in year 2003, $2191,000 in year 2004 and year 2005 was $6369,000. Moreover, the sales growth rate between year 2004 and 2005 was 56.3%. This was HIGH position of industry sales growth rate and proved that in STAR division. This division represents the Starbucks have long-run opportunities for the growth and profitability. The divisions will be considering about forward, backward, and horizontal integration, market penetration, market development and product development.

Nowadays companies find it difficult to survive by relying solely on domestic market and try to find various businesses in various countries without boundaries. The basic need for globalization is to understand and learn different cultures of country which are including tax rates, law and legislation.

Currently the trend in globalization is looking for more luxurious life for people due to increase in the inflation rates and increase in unemployment. People will look for the products which save costs and time, improved customer service, immediate availability and trouble free operation is becoming more important.

Social, Cultural, Demographic and Environmental
According to these analyses, it need to provide some benefits to consumers which can more convenience and attractive to be used by any customers. A cultural connection is created, produce the products with better quality, flexible price and free chemical products but additional flavor mix which is made from natural ingredient for the rich and middle classes family.

High technology is improving the business in an organization. Internet is the advance technology in the world which can communicate and spread the information from a user to another user. In contrast, advertising is more convenient into marketing strategy because customers can consume their products after notice their advertisement. Online purchasing also is another way to advertise or sell their products. Besides, high technology machineries can make more profits and meet the achievement goals sooner or later.


Starbucks concern to provide great work environment for the staffs and apply excellence services. Starbucks also monopoly advantages over its competitors. Consumers more concern on quality and healthy so purchased Ethos healthy water for $8 million and also does not use chemical flavor for coffee. The top management considers to earning more profit so launch a new sales of Frappuccino in Japan and Taiwan.

Despite so many strengths on Starbucks organization, the expensive price is the weakness to Starbucks, it will influence consumers seldom to order and buy their products. Less marketing and advertising is the problem to Starbucks and no available Starbucks products at...
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