Starbucks has overcame obstacles through its shorts history in business. They de

Question

Starbucks has overcame obstacles through its shorts history in business. They deliver an experience of commitment to customer attention and review their operations carefully. They also created a matchless primary product allowing them a competitive advantage over their market. Their choices delivered consistent returns for some years, but not all of their hard work was successful. To address their issues of competition and unrelated diversifications, Starbucks must choose an appropriate global strategy and utilize opportunities from diversification.

Currently Starbucks has expanded beyond its U.S. origins. They have 8078 Company operated stores in the Americas, 826 in EMEA and 882 in China/Asia Pacific. In order to have advantage over their competitors overseas, Starbucks needs to increase their company operated stores over licensing stores. Licensing has its advantages for quick expansion without the risk, but licensing overseas doesn’t allow much control over manufacturing, marketing and strategic functions. If they are able to own more company operated stores they can pursue a localization strategy. This strategy allows Starbucks to increase profitability by customizing its goods and services, so they can hit the target for that market location. Increasing their company operated stores ensures their company can target their market effectively.

In addition to their endeavors Starbucks is in the works of trying to deepen the company’s involvement with health and wellness. In order to make this a successful endeavor, Starbucks needs to choose their approach based on an unrelated diversification. This corporate-level strategy is based on a multiple business with similar organizational competencies to increase the performance of all the company’s business units. Schults the chief executive officer has a great idea for their involvement with health and wellness, but needs to focus the company effectively by targeting their image to encourage their consumers to pursue a healthier lifestyle. Their pursuits should acquire companies with like goals and involvements to increase their overall profits and performance of their units as a whole.

Evaluate each alternative. Critically assess the alternatives defined above. Describe the implications and key steps for implementation of each alternative. Consider external and internal factors and other relevant trends. Once again, utilize course texts and other resources to enhance your assessment.

Explanation / Answer

Strabucks has been one of the most prominenet success stories in the food and beverage industry. It has been possible becaus of its unique offering and quality. It has undergone a rapid expansion throughout the world in terms of store numbers. It has been possible because of the joint venture strategy employed by the company. Starbucks enters into collaboration with a local player in order to understand the local market dynamics and thereby increase its business. This staregy has been mostly successful for Starbucks. However, there have been certain instances wherein it has not been possible to control quality and service due to the licensing strategy. Licensing is a cost reduction model of growth and should not be abolished altogether. However, mechanisms should be in place to have proper training and quality control should be there in place in order maintain its brand.

Wellness and healthy aspects of lifestyle have become one of the most trending domains. Therefore, Starbucks should explore the different ways to leverage this consumer trend. Food and beverage is the first way of improving one's lifestyle towards being healthy and therefore, there is great potential for Starbucks in excelling in this domain. The barrier to entry in this market will be low since Starbucks already have a well developed value chain in the beverage industry. If it moves early then it can have first mover advantage and commain considerable bargaining power towards its loyal customers.

Related Questions

Navigate

• Browse (All)
• Browse S
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.