Starbucks: Strategy Implementation Harvard Case Solution & Analysis

Environmental Analysis

Internal Analysis

SWOT Analysis

Strengths

Starbucks has strong global recognition and brand image due to which it has developed a perception in the minds of a consumer that Starbucks is the third place for them after home and work. In the United States alone, the company has a market share of 37% market share. The company also has presence in over 60 countries which makes it one of the most global recognized brands. The company has also been ranked as the best global brand for the year 2013. Starbucks developed its brand recognition through providing good product quality on regular basis. This consistency has allowed the company to earn a respect amongst consumers. The company has also earned superior economies of scale due to which it has spread its wings in different international markets through its superior distribution channels and relationship with its suppliers. (Simon, 2009).

The locations amongst which Starbucks have placed their stores is extravagant across the globe. The company targets premium customers where high traffic is a possibility. The location allows the company to target its true customers. The ambience of its stores is usually very appealing and also serves the concept of environmental friendly. The company has a motto that it aims to provide an excellent customer experience that the consumer would want to come again the next time when it leaves the door behind. The company has highly skilled employees that have huge amount of knowledge about their products and their company. The employees are referred to as partners in a company. The company has lowest turnover rate in the industry and a very high satisfaction rate. (Simon, 2009).

Weaknesses

The recent approach of the company has been focused upon expanding the retail business with a rapid growth in order to meet the gap around the world and also to meet the expected demand. In the midst, the company has forgotten its customers and has failed to achieve their satisfaction. The company which was from the very beginning had developed the base of their business through customer recognition and satisfaction, has now become weak in gaining their trust. Through a research, the results have indicated that the customer satisfaction has decreased because the serving time for each customer have superseded the normal time for each customer i.e. 3 minutes. This has resulted in the switching of its customers to different companies due to poor customer relationship management. The company has expensive products in its product base in order to provide the ‘Starbucks Experience’. Many companies have launched their specialty coffee products with a very low price which has affected the customer base for Starbucks. At the recession times, many customers’ spending power had decreased due to which they had to switch to other companies. (Schultz, 2011).

Due to the aggressive retail expansion from the company leads to self-cannibalization which decreases the future growth rate of the company. United States market is facing the same self-cannibalization problem due to the opening of many stores in the country. The international business strategy is standardized which means that the company has the same strategy for building up the environment of its retail stores which has failed in some countries. The reason for failure was the wide acceptance of the internationalization strategy adopted by the company. (Gilert, 2009).

Opportunities

Starbucks have opportunities to enter and expand its business in the emerging economies that have high spending power and as well as in the verge of becoming a high economic country. Targeting the emerging economy countries would result in the increase of high growth and high revenues for the company. However, the company would also have to develop a habit of drinking coffee than usual. The company has good opportunities to enter the Indian market where it could operate through joint venture with a local company that has huge amount of knowledge in local market. Starbucks can also expand its growth through offering different product lines for different market. Previously, the company had been successful in launching fresh juices and tea products for their particular market segment. Therefore, introducing new products would ultimately increase the customer base and would allow it to retain its old customers. (Schultz, 2011).

The rising demand of the coffee has increased its consumption amongst different developing nations have also been an opportunity where the company can target and expand its retail operations. Although, the company had also entered in the packed coffee products for which the particular has not been fully catered. The company has an opportunity to marker..................................

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