Starbucks Choice & Evaluation
Starbucks Strategic Choice and Evaluation
Starbucks wants to have one of their coffee stores in every neighborhood worldwide – a lofty vision that is not realistically attainable, but speaks to the company’s desire for concentrated growth. Facing the challenge of how it should leverage its core competencies against various growth opportunities, Starbucks must convince shareholders that it can continue its phenomenal growth record by leveraging its strengths and opportunities, while minimizing weaknesses and possible threats. Even though Starbucks enjoys strong brand and name recognition, the organization must achieve the desired growth without cannibalizing or saturating the market.
Customers have a strong loyalty and affinity to Starbucks, and the company has attained tremendous market share with no real direct competitors in the specialty coffee market, but it is doubtful that customers will infinitely be willing to pay $3-$4 for a cup of regular coffee. Starbucks has added new products and services (e.g., food, music, Starbucks re-loadable card, etc.) to enhance customer and employee experiences. These products and services have been successful in strengthening Starbucks’ brand recognition and market position, proving that consumers will purchase more from the company.
Recent acquisitions (Seattle Coffee, Tazo Tea, Ethos Water) and nearly 40 strategic alliances (Pepsi, Kraft, Hilton Hotels, Safeway, etc.) have proven successful. The key is in finding and taking advantage of additional opportunities for more acquisitions and strategic alliances for deeper market penetration, which will stimulate growth.
Which is the best strategy position, and why is it the best one? Which strategy position should Starbucks concentrate on, or does the company have the resources to pursue all three choices, as shown below?
Expand the U.S. Market Broaden the Product Line Expand into China and Eastern Europe
• Do market research on U.S. remote and
Starbucks wants to have one of their coffee stores in every neighborhood worldwide – a lofty vision that is not realistically attainable, but speaks to the company’s desire for concentrated growth. Facing the challenge of how it should leverage its core competencies against various growth opportunities, Starbucks must convince shareholders that it can continue its phenomenal growth record by leveraging its strengths and opportunities, while minimizing weaknesses and possible threats. Even though Starbucks enjoys strong brand and name recognition, the organization must achieve the desired growth without cannibalizing or saturating the market.
Customers have a strong loyalty and affinity to Starbucks, and the company has attained tremendous market share with no real direct competitors in the specialty coffee market, but it is doubtful that customers will infinitely be willing to pay $3-$4 for a cup of regular coffee. Starbucks has added new products and services (e.g., food, music, Starbucks re-loadable card, etc.) to enhance customer and employee experiences. These products and services have been successful in strengthening Starbucks’ brand recognition and market position, proving that consumers will purchase more from the company.
Recent acquisitions (Seattle Coffee, Tazo Tea, Ethos Water) and nearly 40 strategic alliances (Pepsi, Kraft, Hilton Hotels, Safeway, etc.) have proven successful. The key is in finding and taking advantage of additional opportunities for more acquisitions and strategic alliances for deeper market penetration, which will stimulate growth.
Which is the best strategy position, and why is it the best one? Which strategy position should Starbucks concentrate on, or does the company have the resources to pursue all three choices, as shown below?
Expand the U.S. Market Broaden the Product Line Expand into China and Eastern Europe
• Do market research on U.S. remote and
References: Bryson, J. M. (1988). Strategic Planning for Public and Nonprofit Organizations. San Francisco: Jossey-Bass. Retrieved August 09, 2014 fromhttp://literacy.kent.edu/Oasis/Leadership/0200-10.htm Fuller, J. N. and Green, J. C. (2005). The leader’s role in strategy. Graziadio Business Report. Retrieved August 09,2014 from http://gbr.pepperdine.edu/052/strategy.html Porter, M. (1980). Competitive Strategy: Techniques for Analyzing Industries and Competitors. New York: Free Press. Starbucks. (2013, September 29). Investor Relations. Retrieved July 27, 2014, from Starbucks: http://investor.starbucks.com/phoenix.zhtml?c=99518&p=irol-sec&secCat01.1_rs=41&secCat01.1_rc=10&control_selectgroup=0&x=34,44&y=16,18