Starbucks- Evolving Into A Dynamic Global Organization
March 25th, 2014
Lancelot Barbier, Romain Bosc, Ines Gyselinck, Fatma Hefaf, Margaux Rotter
1. What was Howard Shultz’s original strategic vision for Starbucks? Is his 2010 vision for Starbucks different from the one he had in the 1980’s? How many times has his strategic vision changed? Is his present strategic vision likely to undergo further evolution? After evaluation of the case, it can be said that Shultz’s first strategic vision for Starbucks began during his trip to Milan, Italy in 1983. It is during this trip that Shultz’ came to the conclusion that “the Starbucks store in Seattle completely missed the point.” For him, going to Starbucks should feel like a treat for their customers and every time should be an experience. For this to be possible, Starbucks should do more than selling coffee beans, they should also serve fresh coffee in their stores, this, Shultz believed, would help recreate the Italian coffee bar culture in the United States, his original vision. This vision is represented throughout the opening of his own company, Il Giornale in 1986. In 1987, his vision continues to expand. At this point in time, Shultz acquires Starbucks, and the combination of the two companies creates Starbucks Corporation. Once he has become CEO and president, Shultz shares his vision with the staff; he aspires that Starbucks will become a national company with values and guiding principles that the employees could be proud of. Shultz also seeks for Starbucks to become the most respected brand name in coffee, and that this brand name will be admired for its corporate responsibility. During this same year, Starbucks continues to see some changes within the company, mostly through expansion outside of the Pacific Northwest, with a total opening of 15 new stores by 1988, 30, in 1990, 32 in 1991 and 53 in 1992, without the use of franchising. Between 1992 and 1993, Starbucks tried the “Starbucks everywhere strategy” in order to minimize delivery and manufacturing costs, which proved to be ineffective. From the beginning of 1995 until present day, Starbucks also launched a long-term strategic campaign for product line growth; this includes the many alliances, acquisitions and licenses that Starbucks formed. Another example of the product line growth within the company can be seen through the change of menu in 2008, in an attempt to diversify their products to reach more consumers. It should also be noted that all of the partnerships that were formed from the 1980’s to the 1990’s were updated, either through remodeling, change, or discontinuation, proving the evolution of the company’s strategic visions throughout the years. Finally, in 2010, following the aggressive growth strategy of Donald, Shultz returns to his position as CEO and continues to make some changes. During Donald’s growth strategy, Shultz felt that Starbucks was becoming less passionate about their customer relationships and the customer experience therefore he came up with a major restructuring and revitalization initiative. This was to be accomplished through several main points; strengthening the core, elevating the guest experience, investments and growth, expansion in Asia, India and Vietnam. All of these strategies were put in place in order to recast Starbucks into the company it envisioned it should be. Therefore, it can be seen that the vision of the company has not undergone many changes since the beginning; Shultz always envisioned that Starbucks will become the number one brand associated with coffee and a place with corporate values that the employees could be proud of. However, throughout the company’s expansion, it can also be said that the vision has grown larger, but the core values have remained the same.
2. Which corporate, entry timing options and diversification strategy does Starbucks follow? It can be...
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