Influencing Organisational Strategy

Running Head: INFLUENCING ORGANISATIONAL STRATEGY 0
INFLUENCING ORGANISATIONAL STRATEGY
Student name
1-28-2019

INFLUENCING ORGANISATIONAL STRATEGY 1
Contents
Q1. What is Starbucks’ strategy?.................................................................................................2
Q2. Assess Starbucks’ strategy in relation to:.............................................................................6
a. Starbucks’ financial performance.....................................................................................6
b. The overall coherence of Starbucks’ strategy in terms of its fit with the company’s
external and internal environments and the internal consistency of the strategy....................9
Q3. Does Starbucks operate in the interests of its shareholders or its stakeholders?................11
Q4. What threats does Starbucks face; how should it counter these threats?............................16
References......................................................................................................................................21

INFLUENCING ORGANISATIONAL STRATEGY 2
Q1. What is Starbucks’ strategy?
For analysing the strategy of Starbucks, it is important to understand the external environment in
which the company exist, and working, which affect the company to large extent. For this
purpose, the PEST analysis would be helpful. The four factors as of PEST analysis include:
 Political factors – since the company is working in various nation worldwide, the political
aspect of the nation becomes important to abide and understand to sustain in the market.
For instance, the involvement of political parties may affect the business, for instance in
case of promotion strategy Starbucks, have to abide with certain rules and have to do
according to the legal system and rule. Moreover, this is the reason that the company
have to enter the business with different mode of entries.
 Economic factors – this include aspects like GDP of the country, which reflect the
income level and consumer spending, which may affect the pricing strategy of the
company. Another aspect was tax, in some nations corporate tax is high and low in other
nations, which affect the revenue of the company
 Social factors – this include the social trends, for instance the consumption preference of
the customer. For instance, westerner nation are more found of coffee, whereas nations
like china are more found of coffee. Moreover, culture also affect the strategy, like in
some nation the culture of having coffee at coffee shops do not exist much, like in India,
when the company enter it was new to the culture.
 Technological factor – this factor includes the adaption level of the customers in case of
technology. For instance, UK, or other western countries are more technological
advanced nation, where the company needs to introduce technology in business as well,
like in payment system (Doole & Lowe, 2008).

INFLUENCING ORGANISATIONAL STRATEGY 3
The overall strategy of Starbucks is to build the company into a destination, for which the
company aims to broaden the experience of the company, through product differentiation. This
included adding music, food, books, and videos. Ansoff’s matrix can be used to analyse the
major strategy of the company. The company has already developed the brand in most of the
nation worldwide while adopting market development. In today’s scenario, company’s major
strategy include product development that is targeting existing market with new product to offer.
Figure 1:( Source: (Aksoy, 2018)
This Starbucks’s strategy included the additional diversification of business, products, and
channel of distribution, which included:

INFLUENCING ORGANISATIONAL STRATEGY 4
 Licensed coffee shops & Kiosks – this strategy involves expanding the business through
reaching out to maximum customers through coffee shops of Starbucks, which licensing,
which was with Host Marriot, at its first licensed
 Distribution of retail packs of Starbucks through various retail food stores, and
supermarkets – since the purpose of the strategy of the company is to reach out to the
customers, it can be possible by proving the Starbuck’s coffee retail packs to the
customers, through more approachable supermarkets and retail outlets.
 Licensing for bottle drinks – another aspect of the strategy is to license the product with
Unilever and PepsiCo for Starbuck Bottle drink supply to the customers. for instance,
Tazo tea, and Frappuccino
 Involvement in financial services – this begins with the prepaid store card of Starbucks,
along with the visa credit card afterward. This also initiated the card of Starbucks to enter
into the reward program, which let the customers enjoy the free drinks and various other
benefits to the customer who is regular or loyal customers to the brand (Aksoy, 2018)
 High-quality coffee beans – the major aspect of the strategy of the company is quality of
coffee beans, and consistent about the quality standards, which make the customer
experience the best of espresso coffee beans. Those beans were prepared with roasting
carefully and also enhancing the life of the growers of the coffee.
 Employee involvement – the counter staff of the Starbucks played an important role in
implementing the Starbucks experience the major role of the strategy was not only to
provide the customers the best range of coffee but also focus towards the customer
engagement and source of entertainment through excellent experience at the coffee shop.
For this, the employees were playing the major role as they would be responsible to

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communicate with the customers and direct link type the end users, which needs to be
enthusiasm
 Community relation and social purpose Schultz had provided the organization with the
view of refining role of the business of Starbucks in society. The major purpose of eth
strategy is to create the company where everyone is respected and valued, irrespective of
the place they came from, color, cast, and education level. The purpose was to link the
shareholder to the cultural values. Moreover, the positive action was a major purpose,
which included the positive action to bring the customers, partners of the company, and
society to contribute each day.
 Designing and layout of stores of Starbucks – this is something which indicates the
positivity or the negativity of the company in the customer perception. Therefore, the
strategy included that the company must have the good physical appearance of the coffee
shop and product offered to the customers like the design of the store and its layout must
be done. The company reflected the humanity of Starbucks through the designing of the
store (Andersson, 2016)
Starbucks experience is the key to the Starbucks strategy, which included the creation of the third
place for the people to make them feel other than work and home and where the people would be
able to engage socially and will be able to experience best taste coffee. This is a reaffirmation of
Starbucks, which will include social commitment and a good place for the world to spend, hang
out with friends and a stronger commitment towards the society through corporate social
responsibility of the company. This has reduced the automation of coffee creation, and
experienced the ready coffee with relaxation, and served with care. Moreover, along with a
coffee various variety of foods can also be offered such as sandwiches. Therefore, this strategy