Q) What is Starbucks' strategy?Starbucks is currently following a differentiated strategy with a long term growth orientation.
It is also focusing on enhancing and strengthening its brand image, by taking several initiatives related to its core business that are intended to enhance customer experience at Starbucks retail stores.
Developing and maintaining leadership talent; as well as organizational values, culture and principles.
It has a continued focus on domestic and international growth, with the aim of being the largest and the most respected specialty coffee brand in the world. To accomplish this, it uses the strategy of pre-emptive entry into the market, followed by aggressive growth.
Growth through Innovation - this includes leveraging the brand into new product categories and channels as well as making sure that all elements are aligned. Product and market strategies include;Ã¢ÂÂ¢In existing markets, Starbucks follows a market penetration strategy (expanding in US, adding drive-through, expansion of seating, etc).
Ã¢ÂÂ¢Market expansion strategy is followed when Starbucks enters new markets with the same products: for example, offering Starbucks at Barnes and Noble, United airlines and airports.
Ã¢ÂÂ¢An example of Product Innovation strategy (new products and existing markets) could be the introduction of Frappuccino.
Ã¢ÂÂ¢Finally, introducing ice cream and bottled frappuccino is an example of diversification.
Q.2 Given your assessment of its competitive premise, how should it leverage its resources and capabilities to achieve its growth objective?Starbucks is by far the market leader and it is leveraging its resources and capabilities far more than any of its competitors. Even the second largest player, Second Cup has 243 stores in face of Starbucks' 1000 stores, and an international presence. However it could exploit a number of opportunities to pursue its goal of becoming the most recognized and respected brand of coffee in the world.
Starbucks should take the following...