Starbucks Case Study Business Policy
Integrated Business Policy and Strategy
First Short Case Report
Group
STARBUCKS OVERVIEW
Starbucks is the world’s most successful transnational coffeehouse. Established in 1971, Starbuck’s overwhelming success has led it to operate more than 17,000 stores, recording 2011 revenues of $17 billion at approximately a 15% profit margin. This case report will explore what has allowed Starbucks to dominate the coffeehouse market and the opportunities and threats for future operation.
CAUSES OF SUCCESS SO FAR
Differentiation Strategy
Starbucks has many functional strategies that help it achieve superior financial performance. The first functional strategy Starbucks uses is increasing efficiency with its human resource strategy. Starbucks takes great pride in their employees, and invests in them with higher pay and quality training since they are the face of the company. The second functional strategy Starbucks uses is improving quality as excellence. Starbucks emphasizes the attributes of its service associated with the product, such as ordering ease, superior customer service, and a relaxed environment. Starbucks also maintains the quality of its products by choosing the tastiest coffee blends from many different countries. The third functional strategy Starbucks uses is consistently increasing its innovation with different coffee blends to satisfy any consumer. Most recently Starbucks noticed that most of their coffee blends were dark roast, and were not satisfying the needs of its consumers that preferred light roast coffee. To satisfy these customers, they recently used their innovation to come out with a light roast coffee blend called ‘Blonde Roast’. The fourth functional strategy Starbucks uses is achieving superior customer responsiveness. Starbucks saw a need that was not being filled for its customers, a place to unwind between work and home. In return, Starbucks customized their coffeehouses by providing a relaxed environment to unwind while having a
First Short Case Report
Group
STARBUCKS OVERVIEW
Starbucks is the world’s most successful transnational coffeehouse. Established in 1971, Starbuck’s overwhelming success has led it to operate more than 17,000 stores, recording 2011 revenues of $17 billion at approximately a 15% profit margin. This case report will explore what has allowed Starbucks to dominate the coffeehouse market and the opportunities and threats for future operation.
CAUSES OF SUCCESS SO FAR
Differentiation Strategy
Starbucks has many functional strategies that help it achieve superior financial performance. The first functional strategy Starbucks uses is increasing efficiency with its human resource strategy. Starbucks takes great pride in their employees, and invests in them with higher pay and quality training since they are the face of the company. The second functional strategy Starbucks uses is improving quality as excellence. Starbucks emphasizes the attributes of its service associated with the product, such as ordering ease, superior customer service, and a relaxed environment. Starbucks also maintains the quality of its products by choosing the tastiest coffee blends from many different countries. The third functional strategy Starbucks uses is consistently increasing its innovation with different coffee blends to satisfy any consumer. Most recently Starbucks noticed that most of their coffee blends were dark roast, and were not satisfying the needs of its consumers that preferred light roast coffee. To satisfy these customers, they recently used their innovation to come out with a light roast coffee blend called ‘Blonde Roast’. The fourth functional strategy Starbucks uses is achieving superior customer responsiveness. Starbucks saw a need that was not being filled for its customers, a place to unwind between work and home. In return, Starbucks customized their coffeehouses by providing a relaxed environment to unwind while having a