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Starbucks Strategic Management Insights

Starbucks faces challenges sustaining its position in the future. It must determine how to grow while addressing weaknesses like overextension and high prices. The document analyzes Starbucks' strengths, weaknesses, opportunities and threats. It recommends expanding to emerging markets by utilizing financial power and brand image. The action plan is to expand markets while maintaining quality, service and adapting strategies over time.

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Mary Chris del Rosario
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849 views2 pages

Starbucks Strategic Management Insights

Starbucks faces challenges sustaining its position in the future. It must determine how to grow while addressing weaknesses like overextension and high prices. The document analyzes Starbucks' strengths, weaknesses, opportunities and threats. It recommends expanding to emerging markets by utilizing financial power and brand image. The action plan is to expand markets while maintaining quality, service and adapting strategies over time.

Uploaded by

Mary Chris del Rosario
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOC, PDF, TXT or read online on Scribd

Strategic Management

Case Analysis
STARBUCKS CORPORATION

TIME CONTEXT

2011

VIEWPOINT

Howard Schultz (Chief Executive Officer)

CENTRAL PROBLEM

Despite the success of Starbucks, the company will face different challenges in the near
future. What would Starbucks do to sustain and improve their position in the market?

AREAS OF CONSIDERATION

Strengths
▪ Successful and popular product lines
▪ Access to high-quality Arabica coffee beans
▪ Strong supply chain management
▪ Strong brand image
▪ Strong customer service
▪ Strong and reputable partners
▪ Variety of flavors
▪ Healthy financial situation

Weaknesses
▪ Overextension of product portfolio
▪ High prices of products
▪ Environmental issues

Opportunities
▪ Expansion to emerging markets
▪ High growth potential of the single-serve coffee market
▪ High growth potential for flavoured coffee in the U.S. market
▪ High growth potential for courtesy coffee products

Threats
▪ High bargaining power of suppliers
▪ Trademark infringement in emerging markets
▪ Increasing competition from competitors and new entrants in emerging markets
▪ Saturated market in developed economies
▪ Increasing price sensitivity of customers

JULICAR A. LOYOLA Master in Business Administration Strategic Management


ALTERNATIVE COURSES OF ACTION

1. Utilize financial power and brand image to spur expansion in emerging markets.
2. Utilize the wide variety of flavours and successful product lines to penetrate the
flavoured coffee market in the U.S.
3. Utilize strong supply chain/supplier relationship management to reduce bargaining
power of supplier.
4. Focus on quality, customer service, brand reputation, and key strategic partners to
counter low-price offering of competitors.
5. Redirect focus to profitable niche markets to avoid overextension of portfolio in
unprofitable market segments.
6. Tackle middle-class customer in emerging market by adjusting prices to affordable
levels.
7. Discard unprofitable product lines to avoid portfolio overextension and foster
profitable product lines to exploit niche market.
8. Lower prices in reaction to increasing price sensitivity of customers.

RECOMMENDATION

Based on my assessment, I thereby recommend that Starbucks should utilize its financial
power and brand image to spur expansion in emerging markets. Then this strategy will be
supported by other strategies that will help the company to sustain and improve its
position in the market.

ACTION PLAN

▪ Expand to emerging markets.


▪ Continue to employ partners (employees) that are committed to coffee knowledge,
product expertise and customer service.
▪ Continue to give its customers the “Starbucks Experience”.
▪ Decide on what products should be added or removed from their portfolio.
▪ Continue to adapt change and form new strategies to be implemented and executed to
attain the company’s goal.

JULICAR A. LOYOLA Master in Business Administration Strategic Management

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