Strategy Analysis of Starbucks Sample

STRATEGY ANALYSIS OF STARBUCKS
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Strategy Analysis of Starbucks
Starbuck is an American corporation founded in d in 1971 in Seattle, WA. It specifies premium roasting, marketing, and retail across the world. It has 19,767 operated and licensed stores in 62 countries, consequently employing about 182,000 employees. Their product roaster includes handcrafted high-quality/premium priced coffees, tea, a variety of fresh food items, and other beverages. Their sales also include the sale of other coffer products, all under their licensed trademark and licensed stores, groceries, and national foodservice accounts. This overview of the company will help in writing a cohesive report on the overall strategy external and internal environment, competitive edge, and recommendations for the company.
Overall Strategy
Over the years, Starbucks has doubled down on a generic growth strategy that highlights its products' specialty. It has managed to grow multinational operations from this strategy that focuses on constantly setting its coffee products and business model apart from its competitors. This is achieved by the utilization of growth strategies based on Igor Ansoff's matrix for market expansion. The combination of intensive growth strategies directly compliments the company's strategy of competitive positioning in the coffee market. The strategy focuses on the company's potential for success and a continued emphasis on successfully penetrating markets with its specialty coffee products. The alignment of its generic strategy and strategies for intensive growth explains why the company is able to keep up with competitors like McDonald's and Dunkin' (formerly Dunkin' Donuts), Maxwell House, and Folgers CITATION AND20 \l 1033 (THOMPSON, 2020). These companies all compete in the food and beverage and consumer goods market, which is a vigorously competitive field. The strategies Starbucks uses have managed to position it at the top of coffeehouse chain industry. Therefore, the management sees no need to change it rather add improvements to adapt to different environments and cultures.
Michael Porter's framework, the generic strategy involves making the company's business and products completely different from other coffeehouses. The differences are used to justify the premium prices and subtlety communicate the company's value regarding their high quality and unique products. They also do a frequent addition of new products or variants to retain the customers' interest, consequently gaining a competitive advantage on companies that may want to poach. The competitors such as McDonald's' and Dunkin compete through the low cost of their products, while Starbuck focuses on creating the best ambiance in a warm and friendly environment that people enjoy irrespective of the price.
The implication of this strategy is that it places a lot of pressure on the Starbucks team to constantly keep on innovating. It is all good when the innovations are forthcoming, however, the brand may suffer when competitors manage to match or exceed the company's uniqueness in its operations. To avoid this outcome, Starbucks focuses on innovating its product mix and supply chain. It focuses on constantly improving its ingredients and corporate protected recipes, for instance, baked goods that have reduced fructose corn syrup. The company innovates with its supply chain to have a continuous and dependent supply of the world's finest ingredients to sustain the high quality for the long term.
Starbucks internal environment.
The company's internal analysis will focus on the operations that impact the price, product, place, and promotion. Starbucks boasts a rich lineup of products up to thirty coffee products. It is also heavily involved in innovation, consequently mixing its products with other brand names within its portfolio of licensed companies. They include e Teavana, Tazo, Seattle's Best Coffee, Starbucks VIA, Starbucks Refreshers, Evolution Fresh, La Boulange, and Verismo. Therefore, there are internal opportunities to play around with flavors and different combinations and come up with new products that further solidify their positive influence on their customer base. The uniqueness of the products commands a priced premium, consequently maintaining its perceived upscale image in society's eyes.
The internal strategy of Starbucks agreed on locating the stores in neighborhoods with high traffic. They implement the "third place" concept, which helps turn the store into environments that appeal to the customers. The stores' internal ambiance is supposed to feel like a home away from home where consumers can read, relax, listen to music, or connect to the internet. The promotion has been a successful tool to the success of the company. Starbucks invests in finding successful promotion campaigns that satisfy interactions between the company's representatives without compromising the ability of the company to provide high-quality products and efficient services. Until recently, the company's relied on word of mouth and believed that a memorable brand is enough to maintain repeat business. However, over the years, competition has become stiff, and the company is forced to do more in cultivating customer retention and relationships. Consequently, Starbucks has adopted philanthropic philosophy to use as an image of the corporation for added promotion.
Starbucks External Environment.
To conduct an external analysis, the report utilizes the PESTLE analysis model. The political environment is crucial to the business operation of Starbucks. Starbucks ' generic strategy involves the constant search for the best ingredients to maintain its products' constant quality. Therefore, their business relies on importing their main ingredients, coffee beans, from different countries. Each of the different counties has its own tariffs and regulations that impact the overall operations of Starbucks. Therefore, any political change of power or upheaval is likely to cause an issue for Starbucks consequently, they have to renegotiate their position in the said country. The company is also expected to file for all important permits and forms to gain authorization to operate in a country. Therefore, the company's operations fall under the local and federal laws and regulations, meaning some o...