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Starbucks' Strategy and Internal Initiatives to Return to Profitable Growth

Autor:   •  July 3, 2013  •  Research Paper  •  4,488 Words (18 Pages)  •  929 Views

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Emily Thomas

Professor Gervais

Strategy

Starbucks Case

April 2, 2012

Starbucks' Strategy and Internal Initiatives to Return to Profitable Growth

Starbucks has been the world's premier roaster and retailer of coffee since its founding in 1987. Today they operate stores in over 50 countries. They have 8,812 company-owned stores and 7,583 licensed stores. Sales accumulate on average to about $10 billion dollars.

Starbucks along with the rest of the world was hit hard with the worldwide recession beginning in 2008. They were forced to change the way in which they operated. Starbucks is a rapidly expanding company and it is imperative through the leadership of Howard Schultz that they continue to evolve.

1. Summarize the overall strategy of Starbucks Management in its effort to create and develop a new concept and a rapidly expanding company.

During the 1990's it was evident that Starbucks needed to adapt and make changes in order to benefit their rapidly expanding company. The Chief Executive of Starbucks, Howard Schultz, decided that the way they would expand the company was by increasing distribution channels as well as acquiring more market segments. They increased their distribution channels by making products more accessible. By acquiring additional segments they aimed to create new products that cater to a larger group of consumers. They chose to focus on these changes in order to create sustained growth in the long run.

Starbucks started working hard to expand their company using the new distributions channels and expanding to new market segments. They started with new distribution channels by selling their products to existing Universities, hotels, country clubs, hospitals, airlines, and restaurants. They also decided to work with large distributors who resided in the U.S. such as Sysco and US Foodservice. Both distributors began delivering Starbucks products to their clients soon after the partnership with Starbucks was formed. In order to break into new market segments Starbucks created new partnerships. Firstly, in 2007 they partnered with PepsiCo in order to create the International Coffee Partnership. The International Coffee Partnership sold Starbuck's ready-to-drink beverages to countries around the world. In 2008 Starbucks also joined with Suntory and Arla Foods in 2010 to sell ready ready-to-drink beverages in Japan and the United Kingdom.

Starbucks decided they would also expand their new market segments into ice cream. In order to do so they created a partnership with Dreyer's Grand Ice Cream in 1995. This partnership dwindled and in 2008 Starbuck's formed a new partnership with

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