Diversification of Starbucks
DIVERSIFICATION.
For companies, they all want to have bigger market share and earn more profit. So they will find many ways to penetration into the market like diversification. Diversification strategies are used to expand firms' operations by adding markets, products, services, or stages of production to the existing business. The purpose of diversification is to allow the company to enter lines of business that are different from current operations.There are basically two broad forms of diversification as related diversification and unrelated diversification.
Starbucks is the largest coffeehouse company in the world; they not only sell coffee and coffee beans also sell other drinks, salads, sandwiches and snacks. Besides they bought the Hear Music Company and develop other business except coffee.
Related diversification, occurs when a company develops beyond its present product and market whilst remaining in the same area. For example, Starbucks Corporation buys roasts whole bean coffees and sells them along with rich, specialty coffees, pastries and confections, and coffee-related accessories and equipment through company-operated retail stores. It also sells premium coffee beans through other channels of distribution, including coffee distributors, hotels, retailers, warehouse clubs, and restaurants; which are collectively called Specialty Operations. Starbucks offer their coffee cup in their retail shops as well.
Unrelated diversification is a corporate-level strategy based on a multibusiness model whose goal is to increase profitability through the use of general organization competencies to increase the performance of all the company’s business units. Companies pursuing a strategy of unrelated diversification have no intention of transferring or leveraging competencies between business units or sharing resources. For example, Hear Music is the brand name of Starbucks’ retail music concept. Starbucks bought it in 1999. in 2002, they produced a starbucks
For companies, they all want to have bigger market share and earn more profit. So they will find many ways to penetration into the market like diversification. Diversification strategies are used to expand firms' operations by adding markets, products, services, or stages of production to the existing business. The purpose of diversification is to allow the company to enter lines of business that are different from current operations.There are basically two broad forms of diversification as related diversification and unrelated diversification.
Starbucks is the largest coffeehouse company in the world; they not only sell coffee and coffee beans also sell other drinks, salads, sandwiches and snacks. Besides they bought the Hear Music Company and develop other business except coffee.
Related diversification, occurs when a company develops beyond its present product and market whilst remaining in the same area. For example, Starbucks Corporation buys roasts whole bean coffees and sells them along with rich, specialty coffees, pastries and confections, and coffee-related accessories and equipment through company-operated retail stores. It also sells premium coffee beans through other channels of distribution, including coffee distributors, hotels, retailers, warehouse clubs, and restaurants; which are collectively called Specialty Operations. Starbucks offer their coffee cup in their retail shops as well.
Unrelated diversification is a corporate-level strategy based on a multibusiness model whose goal is to increase profitability through the use of general organization competencies to increase the performance of all the company’s business units. Companies pursuing a strategy of unrelated diversification have no intention of transferring or leveraging competencies between business units or sharing resources. For example, Hear Music is the brand name of Starbucks’ retail music concept. Starbucks bought it in 1999. in 2002, they produced a starbucks