1971, when the ‘Starbucks experience’ begun, Starbucks was just a small coffee shop in Seattle, USA. Today, Starbucks, named after the first mate in Herman Melville’s Moby Dick, is the world’s leading retailer, roaster and brand of specialty coffee with millions of customer visits per week at stores in North America, Europe, Middle East, Latin America and the Pacific Rim.
Thus,within not more than three decades, Starbucks’ offering of distinctive blend of quality coffee, neighbourly camaraderie and a unique coffeehouse culture combined with an aggressive growth strategy helped it to become the most famous specialty coffee shop chain in the world and a global company: In 2007, it run more than 15,000 stores worldwide by employing more than 172,000 people. But in the same year 2007 - despite revenues of USD 9.4 billion - Starbucks had to report a first-ever decline in same-store sales.
As early as the mid-1990s, analysts had been predicting that Starbucks could not sustain such strong growth, especially in same-store sales. For more than 10 years, Starbucks had consistently beaten these expectations. By 2007, however, Starbucks unprecedented size, combined with the uncertainty of the economy,had placed the company in a new competitive game.
As a result, in early 2008, Starbucks announced a series of initiatives to cope with the new challenges and to prepare for a successful future – all of them based on renewing the focus on customer experience and slowing down expansion. But what constitutes the Starbucks strategy that has been that successful in the past? What were the main drives of the considerably growth of the Starbucks business? And is the Starbucks strategy flexible enough to adapt to the current challenging market conditions?
After the introduction of the Starbucks business in terms of vision, mission and history, this assignment focuses on answering these questions by analysing Starbucks’ strategy and its key drivers of success in chapter 2. This analysis is done with the model of the ‘strategic diamond’ that is introduced in the beginning of chapter 2 as working basis. The assignment ends a comprehensive analysis of the challenges Starbucks is facing today and how it prepares to successful handle them.
Table of Contents
- Overview
- Introduction
- The Starbucks Business - Vision, Mission and History
- The Five Elements of Starbucks' Strategy
- The Idea Behind the Strategic Diamond
- Arenas - Where Starbucks is Active
- Vehicles - How Starbucks Gets to the Business Arenas
- Differentiators - How Starbucks Wins in the Marketplace
- Staging - Starbucks's Speed and Sequence of Moves
- Economic Logic - How Starbucks Obtains Its Returns
- Starbucks Strategic Diamond – An Integrated Approach
- Conclusion
- Challenges Starbucks is Facing Today
- How Starbucks Prepares for a Successful Future
Objectives and Key Themes
This assignment analyzes Starbucks' strategic success and its adaptability to current market challenges. It examines the key elements of Starbucks' strategy, using the Strategic Diamond framework, to understand the drivers of its considerable growth. The analysis also investigates the challenges faced by Starbucks and its initiatives for future success, emphasizing the importance of customer experience.
- Starbucks' strategic diamond and its components
- The evolution of Starbucks' business model and its growth trajectory
- Analysis of Starbucks' competitive advantages and differentiators
- Challenges faced by Starbucks and its strategic responses
- The role of customer experience in Starbucks' success
Chapter Summaries
Overview: This initial chapter provides a concise introduction to Starbucks, tracing its journey from a small coffee shop in Seattle to a global coffeehouse giant. It highlights Starbucks' remarkable growth within three decades, attributing its success to its unique blend of quality coffee, community atmosphere, and strategic expansion. However, the chapter also acknowledges the company's first-ever decline in same-store sales in 2007, despite significant overall revenue, setting the stage for the subsequent analysis of Starbucks' strategic approach and its ability to adapt to changing market conditions. The chapter raises key questions about the elements that shaped Starbucks' past success and the flexibility of its strategy in addressing contemporary challenges.
The Five Elements of Starbucks' Strategy: This chapter delves into the core elements of Starbucks' strategic framework. It uses the Strategic Diamond model to dissect Starbucks' approach, exploring key aspects like its market presence (arenas), methods of reaching its target markets (vehicles), competitive advantages (differentiators), timing and sequencing of actions (staging), and financial profitability (economic logic). By examining each element through the lens of the Strategic Diamond, the chapter offers a comprehensive overview of the building blocks of Starbucks' strategy and provides insights into how these components contribute to the overall success of the company.
Keywords
Starbucks, strategic management, strategic diamond, competitive advantage, business model, growth strategy, customer experience, market challenges, global expansion, same-store sales.
Starbucks Strategic Analysis: Frequently Asked Questions
What is this document about?
This document is a comprehensive language preview providing an overview of a strategic analysis of Starbucks. It includes a table of contents, objectives and key themes, chapter summaries, and keywords. The analysis uses the Strategic Diamond framework to examine Starbucks' strategic success, adaptability to market challenges, and future prospects.
What are the main objectives of this analysis?
The main objectives are to analyze Starbucks' strategic success, its adaptability to current market challenges, and the key elements of its strategy using the Strategic Diamond framework. It aims to understand the drivers of Starbucks' growth, investigate the challenges it faces, and explore its initiatives for future success, with a focus on customer experience.
What key themes are explored in this analysis?
Key themes include Starbucks' strategic diamond and its components, the evolution of its business model and growth trajectory, its competitive advantages and differentiators, the challenges it faces and its strategic responses, and the role of customer experience in its success.
What is the Strategic Diamond framework, and how is it used in this analysis?
The Strategic Diamond framework is a strategic planning tool used to analyze the five key elements of a company's strategy: Arenas (where the company is active), Vehicles (how it gets to its arenas), Differentiators (how it wins in the marketplace), Staging (speed and sequence of moves), and Economic Logic (how it obtains returns). This analysis uses this framework to dissect Starbucks' strategic approach.
What are the key components of Starbucks' strategy as revealed in this analysis?
The analysis explores Starbucks' strategy through the lens of the Strategic Diamond, examining its market presence, methods of reaching target markets, competitive advantages, timing and sequencing of actions, and financial profitability. Specific details on each component are provided within the full analysis.
What are some of the challenges Starbucks faces, according to this analysis?
While the preview doesn't detail specific challenges, it mentions that the analysis investigates the challenges faced by Starbucks and its strategic responses to these challenges. The inclusion of the 2007 decline in same-store sales hints at some of the difficulties encountered.
What role does customer experience play in Starbucks' success?
The analysis emphasizes the importance of customer experience in Starbucks' success, highlighting it as a key theme. The full analysis likely provides a detailed exploration of how Starbucks fosters and leverages customer experience.
What is covered in the "Overview" chapter?
The "Overview" chapter provides a concise introduction to Starbucks, tracing its history and highlighting its remarkable growth. It also acknowledges the company's first-ever decline in same-store sales in 2007, setting the stage for the analysis of its strategic approach and adaptability.
What is covered in the "Five Elements of Starbucks' Strategy" chapter?
This chapter delves into the core elements of Starbucks' strategic framework using the Strategic Diamond model. It explores aspects like its market presence, methods of reaching target markets, competitive advantages, timing of actions, and financial profitability to offer a comprehensive overview of the building blocks of its strategy.
What are the keywords associated with this analysis?
Keywords include Starbucks, strategic management, strategic diamond, competitive advantage, business model, growth strategy, customer experience, market challenges, global expansion, and same-store sales.
- Quote paper
- Nadine Pahl (Author), 2008, The Idea Behind the Starbucks Experience, Munich, GRIN Verlag, https://www.hausarbeiten.de/document/124546
