Starbucks: Back to Basics? Corporate Strategy

Topics: Coffee, Starbucks, Coffeehouse Pages: 18 (3126 words) Published: April 13, 2014
Starbucks: Back to Basics?
Corporate Strategy: Individual Work (stream2)
Laura Toleman

The purpose of this work
This Individual work is based on the case study “Starbucks: Back to Basics?” written by Sachin Govind. The case reviews the success story about the coffee chain and a brand which changed the Americans’ coffee and café culture. However, it also highlights that Starbucks had been facing some challenges as well as having difficulties inside the company. Furthermore, some analysts expect that the corporation eventually will destroy what they have built up and what have become to be known as their unique characteristics. Some analysts believe that Starbucks have lost focus and track of the the expectations of the market, which is reflected in dropping stock prices in particular, and in the fact that Starbucks struggles to retain the same customer traffic as before. Also, according to Jeffrey Sonnenfeld, a professor at Yale School of Management, “Howard Schultz’s the CEO of Starbucks has to break the romantic attachment to the past. For Howard, it’s a painful unlearning, and that’s what we’re seeing now.”

The aim of this work is to analyze, extracting the information from the case, what is the market environment, competitors, strengths and weaknesses of the brand, as well as appointing new risks and opportunities for Starbucks. Starbucks Corporation - is a global coffee company and coffeehouse chain based in Seattle, Washington. Starbucks is the largest coffeehouse company in the world, with 20,366 stores in 61 countries, including 13,123 in the United States, 1,299 in Canada, 977 in Japan, 793 in the United Kingdom, 732 in China, 473 in South Korea, 363 in Mexico, 282 in Taiwan, 204 in the Philippines, and 164 in Thailand. Starbucks sells hot and cold drinks, coffee beans, salads, hot and cold sandwiches, sweet pastries, snacks, and items such as mugs and tumblers. Through the Starbucks Entertainment division and Hear Music brand, the company also markets books, music, and film. Many of the company's products are seasonal or specific to the locality of the store. Starbucks-brand ice cream and coffee are also offered at grocery stores (www.wikipedia.org)

Starbucks Mission is to inspire and nurture the human spirit – one person, one cup and one neighborhood at a time (www.starbucks.com)

Corporate strategy of Starbucks






Maximize market penetration
Provide a relaxing, attractive social atmosphere
Offer high-quality products
Create a great working environment
Achieve profitability

Critical success factors of Starbucks






Customer service excellence
Product quality
Accessibility
Corporate social responsibility
Brand recognition

Success Strategy Implementation: the 4 Ps of strategy

PERSPECTIVE
 
AND
 MISSION
 

PATTERNS
 OF
 
ACTION
 

BUSINESS
 
STRATEGY
 
PLANS
 AND
 
GOALS
 

POSITION
 IN
 
INDUSTRY
 

Success Strategy of Starbucks could be classified as a “Patterns of Action”. “While much of the Starbucks expansion will likely occur overseas in high-growth markets like China, it seems to me that Starbucks will have to "evolve" into a different type of store in order to succeed within the U.S. market. The company has already evolved from "coffee boutique" to "neighborhood hangout" to "upscale fast-food chain." What is the next evolutionary step for Starbucks?” (http://bigthink.com/ “Starbucks: Survival of the Most Innovative”)

Organizational tensions of Starbucks lie in balancing performance expectation of different stakeholders:

-

Customers expect personal and friendly service, wide range of tasty and healthy beverages and snacks, cozy layout and ambience in stores. Environmental organizations push on corporate sustainability and social responsibility while exporting coffee beans, tea, coca.

Employees who are formed as an integral part of the Starbucks experience expect faire wages and good...
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