Strategic Management -Starbucks

[Name of the Professor]

Strategic Management - Starbucks

Introduction

Strategic Management

Strategic management entails the analysis, steps and actions that are taken by a company in order to create and sustain its competitive edge in its particular industry. This definition of strategic management is based on the two fundamental concepts of strategic management. The first concept incorporates the analysis of the information available to make informed decisions to devise action plan to bring profitability from the situation. This analysis is based on the target market that the organization is trying to service along with the resources that it requires to effectively achieve this cause (Gregory 2005, p1).

Strategic management studies the reasons that allow a company to gain a competitive advantage. Moreover, the efforts of the management and operational staff are focused to create a unique selling proposition for the company known as competitive advantage (Parnell 2009, p2). When a firm has been able to build a harmony between these two elements, it is able to fulfill its business goals and objectives by creating a sustainable future for the stakeholders.

Strategic Planning for Starbucks

Howard Schultz founded Starbucks in 1971 by setting up the first coffee shop in the Seattle area. From then on, Schultz has been able to grow the company not only in the United States but it has expanded its operations to 39 countries. Starbuck Coffee shops serve more than 40 million customers on weekly basis from 5700 company owned outlets. Moreover, Starbucks has opted for a franchised business models and has a network that consists of more than 3200 outlets (Koonings 2008).

The nature of the market and consumers that Starbucks is trying to service requires the management to have a proactive rather than a reactive approach to planning. The market for specialty coffee is getting very aggressive due to the large number of customers that use them. These customers are willing to pay a higher price for the coffee due to the taste, ambiance and brand value that Starbucks has been able to build over the years due to efficiencies in its human resources, operations and marketing management. Starbucks has expanded its operations in a number of countries and it needs a strategic plan for each new expansion due to the difference in cultures that are present from its home country.

Strategic management would allow Starbucks to analyze the factors that are determinant in creating a competitive edge for it. Starbucks ...