University Case Study: Starbucks Business Strategy and Analysis

This case study provides a comprehensive analysis of Starbucks' business strategy, focusing on its global operations, market saturation, and competitive environment. The study begins with an executive summary, followed by an introduction outlining Starbucks' origins and current market position. It identifies key problems such as market saturation, the need for innovation, and challenges related to government policies. The analysis delves into these issues, exploring market trends, consumer preferences, and the impact of incidents on the company's image. Alternatives are proposed, including market expansion, product innovation, and corporate social responsibility initiatives. The study recommends strategies such as new product innovation, improved management hierarchy, strategic market selection, and effective government negotiations. The case study concludes with a discussion of implementation and highlights the importance of consumer satisfaction, market expansion, and operational excellence for Starbucks' continued success. The provided solution is written by a student and published on Desklib, a platform providing AI-based study tools.

Running head: STRATEGY FOR STARBUCKS
STRATEGY FOR STARBUCKS
Name of the Student:
Name of the University:
Author Note:

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Executive summery
Starbucks is a renowned coffee shop chain that has multiple outlets all over the world. The main
feature of the services from this coffee chain is that it provides quality food service. Apart from
that the uniqueness of serving coffee and other beverages makes it famous in the industry.
However, with the change of time, some of the reformations are needed for the improvement of
the Starbucks. This will help to expand the business f this organization. Apart from that the
initiatives will help this coffee shop chain to hold a good market position in competitive market.
The main objective of this paper is to evaluate the different aspects of the business for Starbucks
and the identification for the areas of improvement. The conclusion is drawn from the identified
factors discussed in this report.

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Table of Contents
Introduction......................................................................................................................................3
Problem Statement:..........................................................................................................................3
Analysis...........................................................................................................................................3
Alternatives......................................................................................................................................4
Recommendations............................................................................................................................7
Implementation:...............................................................................................................................8
Conclusion.......................................................................................................................................8
Bibliography..................................................................................................................................10

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Introduction
Starbucks started its journey in the year of 1987. The company currently has 28,200
stores all over the world. The organization is doing well in the business and has gained revenue
of $24 in the fiscal year 2018. Apart from the coffee beverages, Starbucks also serves other soft
beverages and Teavana teas. Each product of this coffee shop has different names. The min
attribute of this coffee shop is that the qualities of the products are of high standards and meet all
the requirements of the consumers. The main objective of this paper is to evaluate the different
aspects of the business for Starbucks and the areas for the modifications so that expansion of the
business can happen. In order to do this the current problems faced by Starbucks has been
discussed. After that the analysis is done in order to find the problems and the opportunities of
the organization. Based on that the mitigation plan for the issues are developed. Moreover, some
of the techniques for the utilization of the opportunities have been discussed in this paper.
Recommendations and alternatives are discussed based on the findings from the analysis.
Problem Statement:
The Starbucks is facing some problems regarding the competitive market and the strategy
making process for the expansion of the business.
Analysis
While operating an organization which is worldwide famous, some of the problems can
be faced by that organization. Similarly, Starbucks is also facing some problems presently while
doing the business. The main problem facing by Starbucks is the market saturation. This means

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there are already many Starbucks outlet in around the world. In this case, there is a little scope to
open the new branch of this coffee shop.
In some cases, Starbucks is losing the identity. The tag line of this coffee shop is “affordable
luxury”. However, the management of the organization had not taken any steps for making the
innovative products those will attract the young generations. While the other coffee shop chains
have taken the hold of the mind set of present generation and their business is booming.
This coffee shop chain is facing some of the problems regarding the current government
policies at its origin USA. Apart from that in USA, the preference of coffee of the people from
different state is different. In this case, the organization has faced the problem regarding the
identification for the requirements of the consumers. Apart from that the organization is doing
well in the business. However, after 20 years, the Starbucks has to bring more diversities and
layouts. The planning for brining that diversity is needed to be done.
Recently, some of the incidents have put negative impact on the image of Starbucks. One
of the events is arresting two people without any reason from the Starbucks outlet.
Alternatives
Alternatives can be stated as the solution of the identified problems. It has been seen that
the identified problems for Starbuck includes managerial problems, problem regarding the
making of the strategy. The main problem facing by the organization is the saturation of the
market condition. The organization cannot open more stores in the localities as there are enough
stores. In this situation, the organization can try to expand the business in Middle East and India
as the presence of Starbucks is minimal. Through this the organization can increase their market
revenue. Along with that for rest parts of the world, Starbucks can innovate new food items and

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different offers those will make the service of this coffee chain different from others. Apart from
that attention of the consumer can be drawn through different corporate social responsibility.
However, many initiatives have been taken by Starbucks to implement the corporate social
responsibility. One of such initiatives is maintaining ethics while doing the business. In this
case, Starbucks maintain ethical source of all products. Starbucks supports all the families and
the small organization who supplies the resources for coffee, tea and other beverages. However,
while doing the business, the company should keep in mind about the local and regulations of the
business. In some cases, Starbucks uses local resources for the maintaining the freshness of the
product.
The local business rules and regulations along with the government laws should be
maintained while dealing with the resources. Apart from that commitment to protect the
environment is supported by Starbucks. The corporate social responsibility can enhance the
goodwill for the organization. The cups and packets used at the Starbucks shop can be recycled.
Apart from that Starbucks takes the initiative to help the people to get employed and fulfill their
dreams. In this context, it can be said that the organization has provided jobs to 100,000 young
people.
Another identified problem of Starbucks is that the organization is losing the identity.
The tagline line of the organization is “Affordable luxury”. However, the definition of the luxury
has been changed and in many cases, the organization is unable to catch the changed demand of
the common people. In this situation, other coffee chains are expanding their business. In order
to mitigate this problem, the Starbucks can bring the innovation in the food and beverage
products. While understanding the demands of the consumers, this organization does proper

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market analysis and implements the changed requirements in the products and through smart
pricing strategy.
The dynamic government policies in different countries for doing business are
problematic for Starbucks. In this situation, proper negotiation process with the local government
while dealing with the resources and doing the business can be done. Apart from that the
organization need to do a survey at different states in order to understand the different
requirements of the different people. Based on the result of the survey, the products at the
different outlets can be launched.
In order to avoid the unnecessary incidents at the outlet of the coffee shop the
management should have the good control over each of the outlets. In case, if any undesired
incident happens at any coffee outlet of Starbucks, the authority should carry on the detailed
investigation in order to understand the root cause of the incident. Certain measures are needed
to be taken in order to avoid such incidents at coffee shop outlets.
For maintaining the environment, Starbucks has already taken many initiatives. The
coffee cups and the equipments used in this coffee shop are bio-degradable. Apart from that
Starbucks is the supporter of LEED (Leadership in Energy and Environment Design). All the
outlets of this organization has certificate from LEED which assures the environment friendly
business at all the shop outlets of this coffee shop chain. For managing the cost, the buying of the
resources and the development of the standard contacts are centralized. Apart from that for the
expansion of the business at different beverage sector, the organization purchased many products
from the other companies. One of the examples of such purchase is purchasing of the cold
pressed juice maker Evolution Fresh for $30 million.

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Recommendations
Some of the recommendations can be made on the basis of the analysis of the paper.
These ares-
Innovation of the new products: For the innovation of the new products market analysis
along with the evaluation of the business strategy of other company are needed to be done. The
market analysis will indicate the demand of the consumers and the gap between the existing
products and expected products from the Starbucks. On the other hand the evaluation of the
business strategy of the other organization will help the organization to understand the current
market trend and strategy other organization are using. This analysis will help the Starbucks to
do something different in order to draw the attention of the consumers.
Maintaining clear management hierarchy: Starbucks has many outlets all over the world.
In this case, maintaining the managerial hierarchy is important. For a famous company like
Starbucks, there are different levels in the management and the hierarchy of the management is
very complex. In order to manage the hierarchy of management properly, certain policies can be
made. The clear overview of the hierarchy can prevent the embarrassing incidents at the outlets
of this coffee shop.
Strategic selection of the market for the expansion of the business: Currently, Starbucks
is facing the issues regarding the saturation of the market. In this situation the selection of the
market for expansion of the business and opening the new outlets are done carefully. It has been
seen that specific areas at Asia-Pacific has less outlet saturation for the Starbucks and this
organization has less market share at those places. The new outlets can be open at those places. It
can be said from the discussion that this organization has to take up different marketing strategy

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at different continent. In USA the organization should focus on bring the innovation in the food
items. On the other hand for the Asia Pacific, the market saturation can be increased.
Making right policies of the negotiation with governments of different places:
The organization has already faced some of the legal problems during doing the business
at different parts of the world. In that case, proper negotiation plan has to be made between the
government and the Starbucks authority in order to conduct the business in a proper way. This
negotiation process can be based on the some basic company rules and regulations of Starbucks.
Imposing the preference on different items based on the demand of the different people
from different state: The management of the Starbucks has come to know that people from the
different state prefer different types of coffee. In order to identify the preference, different
surveys can be conducted among the consumers. The preference should be given on the
beverages and type of coffee popular among people.
Implementation:
The plan can be implemented through a revised business plan or business model.
Through this business model, the reformation of the managerial structure of the organization and
the operational functioning can be done.
Conclusion
The discussion is regarding the different aspects of the Starbucks and its business. It is
complex to evaluate the business strategy for the well-known company like Starbucks which is
operating at different parts of the world. It can be said embarrassing incidents related to the
Starbucks can get highlighted more than the same incidents with small companies. The authority

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of the organization should be careful about the conform of the consumers and the behavior of the
attending employees of the coffee shop. Apart from that the organization has huge market
saturation in West. Relatively, in East which is Asia-Pacific the saturation of the organization is
low. In this situation the organization can expand the business through higher market saturation
at East. However, for USA, the business strategy for the organization should be different. More
innovations in the food items are needed in this part of the world. Apart from that the
organization is currently facing problems with the negotiation with the governments of the
different parts of the world. In order to solve the problem Starbucks can negotiate on the basis of
the basic business rules with the government. The outlets of Starbucks has certain attributes
those includes the larger space for sitting and social gathering. These will help the organization
to increase the comforts of the guests. However, further improvisations are needed for expansion
of the business and making a remarkable position in the market.

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