Main strategies applied by Starbucks from 2012 to 2015
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Question
discuss two new main strategies applied by starbucks from 2012 to 2015?
Answer
Starbucks, one of the largest coffee houses in the world (Statista, 2016), has seemingly adopted two complementary strategies, distinguished as the generic strategy (something that serves as the foundation for Starbucks’ business model) and the growth strategy. Both strategies could be described by two well-known strategy frameworks to illustrate Starbucks’ strategic decisions in the last few years.
The generic strategies available for firms are described by the Bowman strategy clock (Thomson and Baden-Fuller, 2010). The framework identifies eight different strategies, which vary on the perceived value by customers and the price dimension. Based on the product and service offers of Starbucks, the organisation has been pursuing the differentiation generic strategy to respond to the recent intensified competition among coffee houses (Geereddy, 2014). Because Starbucks is offering its customers specialty coffees and other beverages priced well above competitors, the organisation cannot compete on the price dimension with other coffee houses. Thus, Starbucks most continually innovate to deliver and sustain this strategy.
Starbucks has experienced an intensive growth period in the last couple of years (Trefis Team, 2016). The most commonly used framework for growth strategies is the Ansoff Matrix (Thomson and Baden-Fuller, 2010). Starbucks’ recent growth strategy has been characterised by market penetration (existing products in existing markets), market development (e.g. foreign expansions, such as opening its first shop in Italy) and product development (such as the launch of new Starbucks Express stores (Starbucks Corporation, 2016).
References
Geereddy, N. (2014) Strategic analysis of Starbucks corporation. Available at: http://scholar.harvard.edu/files/nithingeereddy/files/starbucks_case_analysis.pdf (Accessed: 18 October 2016).
Starbucks Corporation (2016) Starbucks presents a new store experience in London. Available at: https://news.starbucks.com/news/starbucks-express-store-in-london (Accessed: 18 October 2016).
Statista (2016) Coffee house chains by number of stores worldwide 2015 | statistic. Available at: https://www.statista.com/statistics/272900/coffee-house-chains-ranked-by-number-of-stores-worldwide/ (Accessed: 18 October 2016).
Thomson, N. and Baden-Fuller, C. (2010) Basic strategy in context: European cases and texts. Oxford: Wiley-Blackwell (an imprint of John Wiley & Sons Ltd).
Trefis Team (2016) Let’s look at Starbucks’ growth strategy. Forbes. Available at: http://www.forbes.com/sites/greatspeculations/2016/09/19/lets-look-at-starbucks-growth-strategy/#2d03dfa37175 (Accessed: 18 October 2016).
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