Question

Business Strategy Analysis-

Starbucks What is the Starbucks strategy to compete in the industry? Give specific examples of how you believe they are competing in their industry.

In what ways is the strategy succeeding and/or failing?

What would you recommend they change regarding their current business model?

Answer 1

Starbucks Corporation is an American company founded in 1971 in Seattle, WA, which is a premier roaster, marketer and
retailer of specialty coffee around world. Starbucks has about 182,000 employees across 19,767 licensed stores in 62 countries.

Starbuck strategy to compete in the industry -

1) Starbuck has to concentrate over the quality of the product.

2) They also concentrate at providing excellent level of customer services.

3) Increasing revenue is the main strategy of the company.

4) Increasing the level of operation efficiency through technology innovation.

5)Starbuck focus at increasing the range of target consumer segment.

Starbucks, with its size and scale, has the power to take advantage of its suppliers but it maintains a Fair trade
certified coffee under its coffee and farmer equity (C.A.F.E) program.
The suppliers in the industry also pose a low threat of competing against Starbucks by forward vertical
integration, which lowers their power.
Starbucks also forms a highly important part of the suppliers business, due its size and scope, which makes the power of supplier lower.

The strategy is likely to be succeeding but there are some weekness too like -

1) Expensive Product.

2) Self-Cannibalization through overcrowding.

3) Overdependence on US market.

4) Negative large coorporation image.

5) American and european coffee culture clash with that of other countries,which maybe not accepted by them.

I would recommend starbuck coorporation to change their current business model according to the negative points mentioned above.