Strategic Management of Starbucks



Executive Summary

This paper determines the strategic positioning of Starbucks and analyses its key competencies and strategies. The paper begins with the description of the company, which happens to be one of the best coffee houses in the world. It also addresses the issues and challenges it is facing in its market particularly UK. It also analyses the various strategies it is adopting in order to maintain its competitive advantage. It focuses on the expansion strategy adopted by the company since its inception. Apart from this, its core competencies have also been discussed that have helped it to stay ahead of its competitors in several areas. Finally, recommendations are given so that the company may develop its strategy in order to adapt to the changes in the consumer behaviour.

Table of Contents

Executive Summaryii

Introduction and Strategic Context1

Analysis3

SWOT Analysis3

Strengths of Starbucks4

Weaknesses of Starbucks4

Opportunities of Starbucks5

Threats5

Porter's Five Force Model5

Threat of New Entrant6

Threat of Substitute Products6

Bargaining Power of Customers7

Bargaining Power of Suppliers8

Industry Rivalry9

Organizational Learning, Entrepreneurship9

Strategic Alliance9

Organizational Culture10

Social Responsibility11

Core Competencies12

Conclusion and Recommendations12

Starbucks

Introduction and Strategic Context

Starbucks Corporation is an international coffee company and has coffee house chain. It was first established in Seattle Washington in 1971. Starbucks is the largest coffee house of the world. It has 20,366 stores and it is operating in 61 countries of the world. The major products of Starbucks are hot and cold drinks, salads, sandwiches, pastries, coffee beans, snacks and item like mugs etc. Starbucks also have entertainments division through which they market books, films and music. Starbucks also offer some products through according to seasons and locality. Some of the products of Starbucks are also offered in grocery stores like coffee and ice creams.

In the beginning of their business, they were only the retailers of the coffee bean locally. After which the company started to expand at a high speed (Stone, 2008). In 1990s, the company was opening almost one store in a day. In the mid 1990s, Starbucks also started to open its stores in other countries like Canada and United Kingdom. From the reports it is also viewed that in 2009 company opened 900 stores outside United States and closed 300 stores since 2008 (www.starbucks.com).

In the above framework, the radar of Starbucks is shown. The Radar shows all the components that contribute in the strategic management of the company. The company influenced the preference of people for buying coffees (Proctor, 2000). Coffee houses were not very common at that time in United States but Starbucks established unique image of its brand in consumers mind. From the image of the brand, it is clear that company is not only offering coffee to its customers. According to the founder of Starbucks Howard Schultz, Starbucks offer a simple cup of coffee with unique experience and enhance the life of many people. The life of people are enhanced by providing them the platform and bringing them together and realize the importance of place in people's life (Abrahamson 2000).

They have provided the same platform throughout the world where ever they ...