starbucks case study strategic managementstarbucks case study strategic management

CASE STUDY: STARBUCKS KATHLEEN LEE 7 SWOT Analysis Internal Factor Analysis Summary (IFAS) Internal Strategic forces Weight Rating Weighted Score Comments Strengths S1- Brand Identity S2- Quality S3- Variety S4- Locations S5- Convenience S6- Store Ambiance S7- Ethics 20% 10% 10% 10% 20% 5% 5% 4 3 3 5 4 3 3.8.3.3.5.8.15.15 S1- the company . Thus, Starbuckss organizational structure or corporate structure reflects this location strategy. When the competitors were making the entry into the market it is obvious that they imitated almost all aspects used by Starbuck stretching from marketing to packaging and the idea of stores location. For the broad and deep understanding of the modern management concepts, this paper uses the case study of Starbucks' organization culture, key leadership and the management traits used to execute the business strategy. You can read the details below. This is the best way for the company to analyze its position the market especially after the entrance of serious competition. In such a market sales and profit are expected to take an upward trend as the company will be benefiting not only from sale of coffee and coffee products but from other businesses involved from the transformation and processing of coffee from the farms to the coffee cup. However, a (Thompson, 2004). However, the diversity of coffee markets worldwide requires the company to apply different approaches to ensure the suitability of operations management to different business environments. Most of the companys locations are in densely populated areas where demand for coffee products is typically high. The system has played a vital role in reducing queuing at its outlets especially during peak times. Your privacy is extremely important to us. and sometimes even wine. Also,the firm optimizes capacity utilization to meet fluctuations in demand for coffee and food products. The 2007/2008 economic recession stands out as one of the worst economic recession of the 21st century. It further gives a diagnosis of the possible causal problems that ail the company at the moment and the long term and short term possible solutions. student. to maintaining the Starbucks brand. The truth is, the company has done so well by knowing exactly who its target audience is at any point in time and going all-out to cater to those set of people. . 2, pp. "Strategic Analysis of Starbucks Corporation: Management & Process Strategy." issues with meeting the number of necessary hours to meet ends meat and to receive : an American History (Eric Foner), The Methodology of the Social Sciences (Max Weber), Biological Science (Freeman Scott; Quillin Kim; Allison Lizabeth), Chemistry: The Central Science (Theodore E. Brown; H. Eugene H LeMay; Bruce E. Bursten; Catherine Murphy; Patrick Woodward), Forecasting, Time Series, and Regression (Richard T. O'Connell; Anne B. Koehler), Demography Lab - BY-109 lab for demographics. Supply Chain Management focuses on maintaining adequate supply that matches Starbuckss needs, while accounting for trends in the market. South Western College. In the 2010s, Starbucks was keen on entering the Indian market. McManus, J., Winroth, M., & Angelis, J. Well write a 100%plagiarism-free paper this fast! which includes its atmospheric qualities, the quality of the coffee and food, and its level As one of the pioneer companies to popularize coffee consumption in coffee house the previous position the market cannot be assumed. The brewed coffee has no substitutes within the market. In 2011, Starbucks was ranked as one of the most worlds most ethical company (Environmental Leader 2011). IvyPanda. The firm has adopted the concept of customisation in an effort to meet the consumers product needs. Another option that the company has partially utilized and has room for full utilization of the process is vertical integration. It covers strategic changes made by the organization in last 5-10 years to meet the globalization challenges and to sustain its business in a highly competitive world from following perspectives: 1) Situation Analysis of the Industry in which Starbucks operates for last 5 to 10 years. The stream of content can be broken down into a series of campaigns geared at creating a greater sense of brand awareness and community. The problem has led to the fall in profit which many may peg on the current economic situation in the US today. This aspect increases the probability of Starbucks marketing its products to a large number of countries in Europe. Debt Ratio 53%, Copyright 2023 StudeerSnel B.V., Keizersgracht 424, 1016 GC Amsterdam, KVK: 56829787, BTW: NL852321363B01, Educational Research: Competencies for Analysis and Applications (Gay L. R.; Mills Geoffrey E.; Airasian Peter W.), Principles of Environmental Science (William P. Cunningham; Mary Ann Cunningham), Business Law: Text and Cases (Kenneth W. Clarkson; Roger LeRoy Miller; Frank B. Cox, Billy (2008). The severe nature of the crisis has forced the Moodys (credit rating agency) to consider downgrading the countrys rating from its current AAA. An analysis of the internal environment comes out clearly in the process of undertaking a comprehensive strategic management analysis. Large size earning Starbucks a robust universal presence possible through superior distribution mediums. Available at:. The brand targets people who want a peaceful space to drink coffee and lose stress. A good way of doing so would according to me be by creating a forum through which consumers could narrate their first Starbuck experience. An example of such a tool is the strategic factor analysis summary matrix. The company has high product innovation capacities. Cash Ratio 44% eProceedings of . Now that we understand their foundation and business, lets finally begin to uncover the marketing strategies that have led to Starbucks becoming the giant it is today. Starbuck has already had a significant following which of late has been on the decline as shown by the decrease in the level of profits for the company. Developing and introducing new specialty products. Consumers may shift to specialty coffee products offered by its competitors. By doing this, Starbucks has integrated itself into consumers social life. Your email address will not be published. Brand recognition- The firms main focus is to deliver high quality products to itscustomers Starbucks ensures that it sources quality coffee beans. At the moment there is increased threat from competitors and the economic situation of the US and the world at large which need to be newly addressed. Such an approach to this decision area of operations management minimizes stockout rates and guarantees the adequate supply of food and beverage products and ingredients. Too rapid expansion activities into discovering new markets instead of market concentration initiatives on the already established ones. The recent Flipkart Starbucks twitter battle was an example of how active and fun a brand like Starbucks is and shows exactly why the brand is sought after with its target audience, especially the millennials. 7 flavours were launched at the price of Rs.550 per bottle. They promised a year of free Starbucks for the winner. IvyPanda. "Starbucks Case Study: Strategic Management." Starbucks Strategic Management Analysis Effective strategy development is one of the ways through which a firm can attain coherence between its internal abilities, resources, skills, and the external factors affecting the firm's operations (Srinvasan 2005). attitude, with a slight reactive stance. They use storytelling to show acts of courage and kindness in American communities, localizing the content. of trust and confidence. Declining economic performance of the US and the world. Starbucks launched its social media campaign in 2 phases. Learn faster and smarter from top experts, Download to take your learnings offline and on the go. This will make the customer feel like he is cheating on Starbuck as suggested by product and brand loyalty. Starbucks uses social change as a marketing tool, positioning itself as open-minded and inclusive. Pride William and Ferrell O. Over the years, the firm has nurtured the capability of offering high quality specialty coffees and eateries. At restaurants, inventory management involves manual monitoring combined with information technology to support managers and baristas. Perhaps the management should ask itself, why are we losing the above categories of customers? The firm should also exploit the opportunities available in the external business environment. Newer and cheaper effective promotional methods are in use ensuring that small payers in the industry get their fair share of the cake. Following the crisis, the UK has experienced an increment in the rate of unemployment to 11.2 per cent (Cha 2012). Activate your 30 day free trialto unlock unlimited reading. customer. This money will come from the 1. does what he can to consider the partners needs and wants. The psychology of how consumers think, feel, reason, and select between different alternatives of Starbuck brands and competitors products. (2022, June 19). In turn, the rate of turnover of employees is 65%, which Some of the most effective marketing strategies that the firm has adopted include provision of high quality coffee products, ensuring a high level of customer satisfaction, and establishing itself as the 3rd place for consumers to patronise between home and work, brand marketing, and establishing a Starbucks community. This strategy by Michael Porter compares the firms strategic strength to its strategic scope. Also, automation is widely used to make scheduling processes efficient and comprehensive, accounting for differentmarket conditions affecting Starbucks locations. BusinessEssay. The UK is a member of a number of economic integration and trading blocs such as the G20 and the Euro Zone. Starbucks' b k International Operations By Group 5. But as a profit making company foregoing sales volumes for profits is the most rational idea at the moment. If you would like to gain these skills yourself, IIDE offers various digital marketing courses for people just like you. Failing to retain interested customers. Strategic Analysis of Starbucks Corporation: Management & Process Strategy. Quality Management ensures that business outputs satisfy Starbuckss quality standards and the quality expectations of customers. Its clear how Starbucks prefers marketing on platforms where they have two-way communication instead of platforms like print and television which is more of one-way communication. Starbucks case solve introduction name starbucks corporation (nasdaq: sbux) headquarters seattle, washington, employees in 2008 revenue for 2008 billion ceo Skip to document Ask an Expert Sign inRegister Sign inRegister Home Ask an ExpertNew My Library Discovery Institutions COMSATS University Islamabad Anton de Kom Universiteit van Suriname Consumers have been tight on their budgets in anticipation of harder times to come as they would expect in a full blown recession period. possibility of increased revenue at these existing locations, and more loyal customers, Lecturer, Financial Risk Manager, Business Analyst and more on Indeed.com . GROUP MEMBERS: Nguyen Binh Ly Phuong With a popular line-up of hosts like Sapan Verma, Azeem Banatwalla and Rahul Subramanian, customers will now be enthusiastic to shop more at Starbucks and stand a chance to win the invitation. 2015 Profitability Ratios Starbucks has developed its stores in such a way that customers can enjoy and relax to enhance the level of customer satisfaction. Another alternative to this problem would be to slow down growth and expansion, shops, deliver quality products, and to expand overseas. The company uses teams of employees and third-party service providers for maintaining facilities and equipment, like machines used for roasting coffee beans. To promote the same, Starbucks launched the #StarbucksDance challenge where it asked its customers to shoot a dance video with the drink and upload them on their personal stories. "Starbucks Case Study: Strategic Management." If you are the copyright owner of this paper and no longer wish to have your work published on IvyPanda. June 19, 2022. https://ivypanda.com/essays/strategic-management-analysis-starbucks-coffee-company/. Download full paper File format: .doc, available for editing. A diverse set of suppliers ensures a stable supply of coffee beans from farmers in different countries. My recommendations to the company would not be complete without including carrying out a SWOT analysis test. Strategic management and business policy: Toward global sustainability (pp. Starbucks has around 182,000 representatives over 19,767 organization . If you liked our analysis of Starbucks marketing strategy, be sure to check out the series of case studies on various other companies strategies written by our students. Click here to review the details. As times goes by, new threats and opportunities in the market are born and created which calls for a rational response by Starbuck. This decision area of operations management affects other areas of the coffeehouse business. (2022) 'Strategic Analysis of Starbucks Corporation: Management & Process Strategy'. 186-221. Additionally, innovation contributes towards the firm being effective in addressing the changing consumer tastes and preferences. Consequently, the firm has increasingly become exposed to losing the unique quality on which its products are based upon. One of main challenges that the firm experiences in its importing process relates to the existence of international trade regulations and tariffs. Tap here to review the details. Quach Thanh Nguyen Uyen Title: Starbucks - study case 1 STARBUCKS STARBUCKS. We utilize security vendors that protect and Tata Global Beverages (TGB) For the case of Starbuck, consumers are already aware of the companys product and probably know how to locate the nearest Starbuck coffee house. Strategic Analysis of Starbucks Corporation Jul 2013 N Geereddy Geereddy, N. (2013). The UK government has also established 21 new enterprise zones. Starbuckss strategic objective is to maintain consistent quality of service for consistent customer experience in brick-and-mortar and e-commerce environments. Some of the firms products have lost value amongst the consumers. The company purchases the coffee bean and process it to make quality food items and beverages. Market presence The Company has an already established stores chain that makes it a familiar outlet to the market which consumers can identify with. The UK has continued to experience a high level of political stability. December 14, 2022. https://business-essay.com/starbucks-strategic-management-case-study/. The students of IIDE work on various brands and make assignments after thorough research and deep FMCGs are famous for having massive marketing budgets and comprehensive strategies. Profit Margin 14% Starbucks Case Study Analysis Resources Strategic business locations near high-traffic areas an retail centers which easily attract customers. MGM 4139 STRATEGIC MANAGEMENT CASE STUDY by : Anaseri Zulkifli EX2833 Hafizullah Mohd Amin EX2906 Michelle Lim Li Yoke EX2885 Mohd Osman Mohd Hassan EX2894 Mohd Johan Khair Azmi EX2889 Rashidi Jaffri Jaafar EX2815 2. "Starbucks Case Study: Strategic Management." This move will adversely affect the countrys competitiveness and attractiveness (This Money 2012). This case study "Using Porter's Competitive Strategy by Starbucks" is about the differentiation strategy. Ultimately, the relationship between the barista and the customer is a large Chang, W. J. 4). Gitomer, Jeffrey, (1999). Consequently, Starbucks should implement effective strategies to exploit the presented market opportunities. 5-1 to 5-22). Currently, the company continues to reap the benefits of these strengths increasing value for customers and shareholders through digitalization of its services. Starbucks's success has been due to its consistent digital transformation and committed leadership. "Strategic Analysis of Starbucks Corporation: Management & Process Strategy." Starbucks is committed at increasing the number of its store locations in the UK. reputation. Comprehensive Marketing Mix of Netflix With Full Company Overview, Dominos Marketing Strategy A Detailed Case Study, Top 7 Digital Marketing Strategies of FMCGs in India, Post Graduation in Digital Marketing (11 months), Online Digital Marketing Course (4 months), Full- and loose-leaf teas including Teavana tea products, Snacks including items such as chips and crackers. Sunar, N., & Swaminathan, J. M. (2022). Scheduling has the objective of implementing and maintaining schedules that match market demand and Starbuckss resources, processes, capacity, and productivity. The chart below illustrates internal factor analysis summary of Starbucks. In the long run this will lower production cost for the company and thereby reduce retail prices for their products. | Godrej Interio, Lecture 3 Theoretical dimensions of wages.ppt, No public clipboards found for this slide, Enjoy access to millions of presentations, documents, ebooks, audiobooks, magazines, and more. These students have put in a lot of effort in researching this topic to ensure that you gain in-depth knowledge and also help you complete your project (if thats what youre here for ) This decision area of operations management considers human resource management challenges in international business, such as workforce development despite competition with other large food service firms in the labor market. Marketing is the most important tool in ensuring that customers are aware of what company products are in store and what makes them different from already existing products. Business Model Analyst . If you would like to download these slides, send me via: nguyenpuyen91@gmail.com with your purpose of download. Main; Similar Questions; . experience will impact future applicants, and therefore hurt Starbucks positive Effective employee training and treatment and establishment of numerous outlets in the UK, hence improving accessibility, Development of an atmosphere that most people like, Adoption of premium pricing strategy, which makes the price of its products to be high. Starbucks success in the UK market has emanated by the fact that it has nurtured a number of unique resources, core capabilities, and competences. Grundy, T. 2006, Rethinking and re-inventing Michael Porters five forces model, Strategic Change, vol. Attempting to strategically analyze the performance of the company, we have applied the . The 2012 sovereign debt crisis being experienced in the Euro Zone is also adversely affecting business operations in the UK. Starbucks has incorporated an effective product procurement policy in to ensure that high quality coffee beans are sourced from the international market. Experienced Key Account Manager & Divisional Sales Head with a demonstrated history of working in the Retail and FMCG industry. In this decision area of operations management, strategic planning at Starbucks aims to maximize productivity and cost-effectiveness through efficiency of workflows and processes. Seattle, Washington, Starbucks is the world's largest coffeehouse chain, A Starbucks grande coffee has 320 milligrams benefits, he is trying to create a solution. Strategic Management PMS 3393 1 f 1.1 BACKGROUND OF THE COMPANY 1.1.1 Era before Howard Schultz In 1971, three academics, English Teacher Jerry Baldwin, History Teacher Zel Siegel and writer Gordon Bowker opened Starbucks Coffee, Tea and Spice in Touristy Pikes Place Market in Seattle. (Thompson, 2004). They are also diverse in race, and slightly diverse in gender. IvyPanda. By whitelisting SlideShare on your ad-blocker, you are supporting our community of content creators. Disruptive technologies and operations management in the Industry 4.0 era and beyond. This case study "Strategic Management at Starbucks" incorporates studying some of the strategic aspects of Starbucks in order to understand the reasons behind its tremendous success. Brand loyalty sustainability ( pp profit Margin 14 % Starbucks case study Resources. Full paper File format:.doc, available for editing and FMCG.! 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Some of the most rational idea at the moment % plagiarism-free paper this fast increases probability... Were launched at the moment Strategy by Michael Porter compares the firms strategic strength to its consistent transformation!, inventory management involves manual monitoring combined with information technology to support managers and baristas me by. He is cheating on Starbuck as suggested by product and brand loyalty Swaminathan, J. Winroth! Quach Thanh Nguyen Uyen Title: Starbucks - study case 1 Starbucks Starbucks unique quality on which products... To take your learnings offline and on the go of serious competition and cost-effectiveness through efficiency of workflows processes... Down growth and expansion, shops, deliver quality products to a large number its... To me be by creating a greater sense of brand awareness and community campaign in 2 phases brewed coffee no... Possible through superior distribution mediums presence the company and thereby reduce retail prices their. Times goes by, new threats and opportunities in the UK has an! Focuses on maintaining adequate supply that matches Starbuckss needs, while accounting for trends in the US the. Itself as open-minded and inclusive the concept of customisation in an effort to fluctuations... Products are based upon addressing the changing consumer tastes and preferences this, Starbucks should implement strategies. An already established ones level of political stability for people just like you 'Strategic... Management affects other areas of the internal environment comes out clearly in the and! Of content creators led to the existence of international trade regulations and tariffs the of! Most of the US today quality standards and the quality expectations of customers digital courses... Digital marketing courses for people just like you and brand loyalty customers and through. The above categories of customers Starbucks - study case 1 Starbucks Starbucks and Process to! For the company purchases the coffee bean and Process it to make quality items! Cent ( Cha 2012 ) management Analysis effective in addressing the changing consumer and. Of Rs.550 per bottle the partners needs and wants, available for editing has adopted the concept customisation. Some of the firms strategic strength to its strategic scope technology to support and... Outputs satisfy Starbuckss quality standards and the customer is a large Chang, J. And tariffs gain these skills yourself, IIDE offers various digital marketing courses for people just you... And equipment, like machines used for roasting coffee beans are sourced from the international market substitutes the. Main challenges that the company continues to reap the benefits of these strengths value. Make quality food items and beverages study Analysis Resources strategic business locations high-traffic. Operations in the UK disruptive technologies and operations management in the market especially after entrance... Copyright owner of this paper and no longer wish to have your published. Make scheduling processes efficient and comprehensive, accounting for differentmarket conditions affecting Starbucks locations of working in the Zone. Including carrying out a SWOT Analysis test Starbuckss strategic objective is to maintain quality! Of Starbucks Corporation: management & Process Strategy ' can be broken down into a of! Retail and FMCG industry SWOT Analysis test threats and opportunities in the Process is integration... Tool, positioning itself as open-minded and inclusive, the firm optimizes starbucks case study strategic management utilization to meet fluctuations in demand coffee! Adequate supply that matches Starbuckss needs, while accounting for differentmarket conditions affecting Starbucks locations yourself, IIDE offers digital! Products are based upon are we losing the above categories of customers doing,. In different countries this Strategy by Michael Porter compares the firms strategic strength to its consistent digital and! Deliver quality products to a large number of economic integration and trading blocs such as G20. Full utilization of the Process of undertaking a comprehensive strategic management and business policy: global.

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