The following document is an analysis of Starbucks' current strategy, as well as recommendations for the future.
Beginning with a base case analysis, the company is introduced along with varying elements of its current strategy. Topics in this section include a brief history of the company, its performance in recent years and its current strategy including value proposition, goals, product/market focus and core activities.
With the base case established, the key issues are then identified followed by an analysis based on the diamond-e framework. Here the external environment is analyzed using Porter's five forces, and the internal elements are analyzed based on capabilities and resources, management preferences and organization.
The next step is to identify and analyze three options for the company. These options are weighed based on the criteria developed by the diamond-e analysis.
The final section includes the recommendations as to which option or options should be used. More importantly than which options to take, is how they are to be implemented and the potential risks involved with each. These elements are discussed in the implementation plan section. Here we explain how and when these actions should be taken.
Based on our analysis of the company and its current situation, we recognize that change is necessary if it wants to meet its long term goal of becoming the most respected coffee brand in the world.
[...] http://blogs.informa.com/ecmw/2008/01/03/starbucks%E2%80%99- organization-chart/ (accessed March 2009) Appendices Appendix Balance Sheet: Comparison of Last 4 Years Appendix Income Statement: Comparison of Last 4 Years Appendix Five Forces Worksheet I. Determinants of rivalry among existing competitors: Yes No Low Threat High Threat Is your industry growing rapidly? Are there a relatively few incumbent competitors in your industry? Is productive capacity in your industry added in relatively small increments? Are there significant product differences and brand identities among + competitors in your industry? Are exit barriers relatively low? [...]
[...] Starbucks aims to sell a highly differentiated product, which is reflected throughout the strategy and its components as we can see above. There are inconsistencies between the product/market focus and the goals. Its recent addition of products is an example of a tendency towards the commoditization of the brand, which contradicts the company's main strategic goal ISSUE IDENTIFICATION The issue that we identified concerning Starbucks' strategy is that the company has deviated from its core product of high quality coffee by introducing too many things to its target market. [...]
[...] Starbucks cannot substitute its beans because it is the base of its core product. e. Because of the size of Starbucks and the quantity of products it orders from suppliers, their business would be very important to its suppliers f. The concentration of Starbucks and its competitors is much higher than the coffee bean market. There are far more suppliers than large chain coffee shops Bargaining Power of Buyers (LOW) Assume are customers a. With buyers being customers, there are many buyers. [...]
[...] http://www.mhhe.com/business/management/thompson/11e/case/starbuck s.html (accessed January 26, 2009) 2. www.starbucks.com (accessed January 26, 2009) 3. Starbucks Corporation Annual Report (Seattle, Washington: Starbucks Corporation, 2008),p.2, http://media.corporate- ir.net/media_files/irol/99/99518/AR2008.pdf (accessed January 26, 2009) 4. Anders, George. “Starbucks Brews a New Strategy,” Fast Company, December http://www.fastcompany.com/magazine/49/utw.html (accessed January 20, 2009) 5. Starbucks Marketing Observations, http://business-marketing- strategy-today.com/2008/08/starbucks-marketing-observations/ (accessed February 10, 2009) 6. http://www.starbucks.com/aboutus/Company_Profile.pdf (accessed January 26, 2009) 7. Tischler, Linda. “It's Not About the Doughnuts,” Fast Company, December http://www.fastcompany.com/magazine/89/dunkin- donuts.html (accessed February 10th 2009) 8. Dourado, Phil. [...]
[...] ( Marketing/Communication: Starbucks has an effective marketing strategy which established its brand as a company of choice. Though coffee is a highly standardized product the company is setting itself apart as a unique product. Many of the elements used in its marketing, such as a place to relax, friends, and music, does not directly relate to its core product[10] Are the Strategy Elements Consistent? We argue that there is a high level of consistency between the four different elements described above. [...]
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