Starbucks Report

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Application of Strategy Dynamics:
Starbucks Corporation Pascal Gambardella, Ph.D. CSC 12708 Chilton Circle Silver Spring MD, 20904 301-346-5398 [e-mail]
Strategy Dynamics (Warren, 2008) provides a quantitative, resource-based approach to understanding a firm’s performance over time. This paper describes a strategy analysis of Starbucks Corporation using Strategy Dynamics. It demonstrates the usefulness of this approach in addressing business performance issues for a realworld company. The strategic architecture, a key artifact of the approach, is a model that captures the interactions of a firm’s tangible resources, management decisions, and external factors. Starbuck’s strategic architecture for its retail store business was developed using employee, store, and financial data from Starbuck’s annual report; and, other public information. The strategic architecture and related models were used to explore several issues that can influence Starbuck’s strategy: customers with less discretionary income, expanding too fast, impact of staff layoffs on the quality of service, getting and maintaining loyal customers, and rivalry with competitors. Keywords: strategy dynamics, strategy, strategic architecture, Starbucks
Part 1. Starbucks
“To inspire and nurture the human spirit— one person, one cup, and one neighborhood at a time.” Starbucks Mission, Starbucks website
1.1. Background and Scope
Starbucks is a public company that operates a chain of stores that sells high-quality coffee. Its typical company-owned store has a pleasant, coffee-house atmosphere replete with couches and Wi-Fi. Starbuck also licenses stores, not to individuals, but to other businesses. For example, in the US Starbucks licenses stores

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