Comprehensive Strategy Analysis of Starbucks: A Business Report

This report provides a comprehensive strategy analysis of Starbucks, examining its business approach and key strategies. The report begins by highlighting Starbucks' initial success, driven by high-quality coffee and a unique marketing strategy focused on brand image and direct sales. It then delves into the company's positioning strategy as a premium brand, its segmentation targeting upper-middle-class customers, and its creation of a "third place" concept. The report also discusses Starbucks' strategic direction, including its focus on profit maximization, market expansion, and diversification of product offerings. Finally, the report explores Starbucks' growth methods, emphasizing differentiation based on quality and active social media presence. The analysis references key academic sources to support its findings.

RUNNING HEAD: STARBUCKS STRATEGY ANALYSIS

1STRATEGY ANALYSIS OF STARBUCKS
First opened in 1971, Starbucks had proved to be profitable in their business approach. The main
aim of the company was primarily to serve a premier quality coffee made from excellent Arabica
Coffee Beans, roasting those in its highest standard and the fresh delivery of those to the satisfied
customers. The company has set up a unique marketing strategy that runs even from the choice
and pick of their products.
Analysis of the strategies:
The company considers the quality of the products to be of the most importance as it
serves the main benefits of raising the brand image. The great quality and taste of the coffee
account for the vast reputation of the company (iello, G. and Dickinson, G., 2014). In the
marketing of their products, the company follows a marketing strategy of selling directly at
stores and through brand merchandise as well. The company has also shifted its focus in the
investment in advertising and marketing.
1. Positioning Strategy: the company has been positioned as the premium brand for the coffee
because of the top notch experience it provides. The positioning of the brand values have been
done on the basis of the store environment and customer satisfaction as well.
2. Segmentation: the target customer of Starbucks are the upper economic strata or the upper
middle class who are particularly higher wage earning population. Keeping in mind the
economic and demographic criteria of the target market, the company has created the concept of
“third place” between the home and office where people can sit and relax (Geereddy,2013). For
the effective implementation of this concept, star bucks has its own team of architects and
designers for the proper conveyance of the company image to every stores.

2STRATEGY ANALYSIS OF STARBUCKS
Brand Merchandise: the logo of Starbucks are printed in each of the merchandise. They have also
incorporated some unconventional methods of marketing. The advertisement of the brand was
never done in common places like televisions or Newspapers.
Strategy Direction and defensive strategies:
In recent times, the company has however seen a decline in the popularity because of
diverging from the core business. The current strategic direction however is now, the profit
maximisation and expanding the market in the International retail business to increase the share
in the markets. apart from setting up new stores, the company is also aiming at increasing the net
sales in the existing stores. Keeping in mind this purpose, the company has also introduced
various food items in the stores like sandwiches, vegetables or baked food. They have also
chucked off the image of coffee from the logo. The company recently is investing in the
advertising. They are currently visible in television commercials. However, Starbucks until now
has not turned their focus solely on paid promotions. Starbucks also markets itself from the
social media platforms.
Growth Methods:
The main method for the growth of the company is primarily the differentiation based on the
quality. The CEO of the company once closed the stores for an entire day to let the experts learn
how to make the proper coffee. Though the company faced loss for that, the CEO thought that to
be effective in the long run (Taecharungroj, 2017). In the promotion of their market in social
media the company has been very much active in Twitter. The animated series known as the
‘first and the main’ became very popular.

3STRATEGY ANALYSIS OF STARBUCKS
Reference List:
Geereddy, N., 2013. Strategic analysis of Starbucks corporation. Harward [Електронний
ресурс].–Режим доступу: http://scholar. harvard. edu/files/nithingeereddy/files/starbucks_
case_analysis. pdf.
iello, G. and Dickinson, G., 2014. Beyond authenticity: A visual-material analysis of locality in
the global redesign of Starbucks stores. Visual Communication, 13(3), pp.303-32
Neacsu, A.N., 2018. Quality management on the coffee market. Bulletin of the Transilvania
University of Brasov. Economic Sciences. Series V, 11(1), pp.109-118.
Taecharungroj, V., 2017. Starbucks’ marketing communications strategy on Twitter. Journal of
Marketing Communications, 23(6), pp.552-571.