Starbucks Harvard Case Solution & Analysis

Step 3: Business and Corporate Strategy Analysis

Mission Statement

To inspire and nurture the human spirit – one person, one cup and one neighborhood at a time.

Goals and Objectives

Starbucks’ objectives and goals are to provide a place other than home and office where people can gather and socialize; meanwhile, they can enjoy the great taste of Starbucks’ innovative coffee products.

Strategy

Starbucks’ strategy is to develop its worldwide coffee brand through high quality and innovative products by using the worlds’ best work force, moreover, as part of the expansion strategy Starbucks is opening more outlets around the world. It wants to exceed customer expectations and give a memorable experience through every interaction with Starbucks. Additionally, it gives importance to cultural values and makes sure that growth and expansion do not erode their cultural values. All in all, Starbucks’ strategy is focused on its product and the people who make and deliver that product.

The target customer trends are changing and they prefer to live healthy lifestyle, therefore, they avoid use of alcohol. Further, the consumers want luxuries of life but at affordable prices and most importantly the consumer knowledge is increasing regarding the tastes and types of coffees. Additionally, as per the survey of consumers spending, it has been identified that the greatest revenue can be generated from those consumers who are aged between 30 to 59 years and college going females. The survey also revealed that consumers will like to change the taste and once they like a specific type of taste then they will ask for the same taste all the time in future.

Moreover, consumer trends changes with the society trends and now the trends show that customers prefer to go outside of their home in order to look for entertainment and community gathering places fills that need effectively, meanwhile, consumer like to have a cup of coffee not just for breakfast but also as a regular beverage. However, consumers not only buy a cup of coffee but a place where they can get together and satisfy the life-style need of consumers.

Starbucks has been successfully selling the experience with coffee cup because they provide customers with a comfortable place where they can spend time and think about themselves instead of thinking about family or business. Additionally, customers are pleased by the staff at coffee bars, which puts a good impression on consumers regarding the service that they will receive.

This differentiating strategy of Starbucks has helped to grow successfully and has made Starbucks’ brand to become more popular and recognized among the consumers.

Product Market Mix

Starbucks
Product Market Mix

Product

Existing

New

Market

Existing

Market Penetration Strategy

Product Development Strategy

New

Market Development Strategy

Diversification Strategy

Market Penetration Strategy

In order to further increase the existing market share, Starbucks needs to spend heavily of on marketing strategies and should provide the customers with additional services such as free home delivery.

Product Development Strategy

In order to increase the market share, Starbucks can develop new products such as offering breakfast deals. Moreover, it can enhance quality level of its service in order to exceed customer expectations; meanwhile it can add more features to its existing products.

Market Development Strategy

Starbucks can identify new markets for its coffee products such as it can expand its operations into neighboring countries. Moreover, new distribution channels can be identified such as agreements with chain stores, meanwhile, Starbucks can target new market segment that has been unidentified in past.

Diversification Strategy

Diversification strategy would not be suitable for Starbucks because they have established their good will in coffee products, therefore, diversification into new market with new product would not be recommended.

Step 4: Operations and Organization Analysis

Inbounds

Starbucks has bypassed the middle market and has developed direct relations with bean growers; meanwhile, it provides support and advices to growers in order to grow higher quality of coffee beans. Moreover, Starbucks purchases the coffee beans from different regional areas in order to add portfolio of tastes that it can offer to the consumers. However, in order to assure the high quality of coffee beans Starbucks tests the sample and if they are not up to the required quality then the whole stock gets rejected, meanwhile, Starbucks has developed strong relationship with exporters, which helps Starbucks in order to get the best quality coffee beans even when they are in short supply.....................................

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