Strategic Management of Starbucks

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Strategic Management
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Table of Contents
Introduction................................................................................................................................2
Overview of Starbucks...............................................................................................................2
Paradox and its management in Starbucks.................................................................................3
Competitive position of Starbucks.............................................................................................5
Strategic options available to Starbucks....................................................................................7
Individuals involved in the determination of organisational strategy of Starbucks...................8
Explanation of the success attained by Starbucks......................................................................8
Positioning of Starbucks............................................................................................................9
Evaluation of the changes made at Starbucks............................................................................9
Conclusion................................................................................................................................10
References................................................................................................................................11

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Introduction
As noted by Warren (2015), the change undergone by the business world over the
years become apparent from the fact that rather than the aspects of cost and quality, the entity
of customer experience or customer satisfaction had gained a wider significance. Snell et al.
(2017) are of the viewpoint that the different business firms in order to attain a higher level of
growth are effectively trying to exploit these factors so as to earn the loyalty of the customers
and thereby a higher amount of profitability. However, at the same time it is seen that the
different kinds of paradoxes that exists not only within the business firms but also in the
business markets as well and also the manner in which it is being managed by the firms is
another important factor that greatly affects the financial returns earned by the firms or for
that matter their profitability (Pangarkar 2015). More importantly, it is seen that in the
majority of the cases, the firms not only fail to resolve the different paradoxes that they face
but at the same time effectively exploit them as well through the adequate usage of diverse
business strategies. In addition to this, it has become imperative for the business firms to
thoroughly understand the demands of the markets and also their customers and thereby
formulate relevant strategies for the same. This paper will focus on the different paradoxes
that the firm Starbucks faced and also the diverse strategies that it used for the management
of the same.
Overview of Starbucks
Starbucks Corporation, founded in 1971 in Seattle, Washington, USA, by Jerry
Baldwin, Zev Siegl and Gordon Bowker, is an American multination coffee chain which is
known for the unique brand of coffee that it offers (Starbucks.com 2019). The actual success
journey of Starbucks began with the association of Howards Schultz with the concerned firm
in the last decade of the 20th century. Presently, the concerned firm is the largest coffee chain

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of the world and offers a wide variety of coffees to the customers along with the other
products like tea, beverages, snacks and others which it offers to the customers taking the
help of the product diversification strategy. More importantly, taking the help of the process
of globalisation the firm in the recent times had expanded into business into the other nations
of the world like UK, India, Australia, Japan and others. In this context, it needs to be said
that the concerned coffee chain had more than 28,218 outlets as of 2018 and the gross
revenue generated by it for the year 2017 was more than US$22.387 billion, which makes it
one of the largest firms of the world in terms of the financial returns earned by it
(Starbucks.com 2019). However, the news of the retirement of Howard Schultz had adversely
affected the firm and many people have began to raise doubts regarding the future of the firm.
Paradox and its management in Starbucks
Devia, Aisjah and Puspaningrum (2018) are of the viewpoint that paradox can be seen
as the process through which the business firms compete with the customers so as to offer
them the kind of values within the framework of the products or services offered by them
even before then customers have felt the need of the same. As argued by Ragozzino, Reuer
and Trigeorgis (2016), this is being done by the business firms so as to ensure that the
products or services offered by them would not only be appreciated by the customers but at
the same time would enable them to attain competitive advantage within the business market
of their operation. This becomes increasingly important when the fierce business competition
that the firms had to face within the markets is being taken into account. In the particular
context of the coffee chain Starbucks it needs to be said that there are various paradoxes that
the firm is facing presently and some of the most important ones and also the manner in
which they can be managed are being discussed below.
One of the most important paradoxes that the firm Starbucks had been facing over the
years is the paradox of chaos versus control. This can be related to the fact that the different