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A written strategic analysis report (strategic management - Essay Example

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Starbucks in 2009 The Coffee Goes Cold Starbucks Corporation or Starbucks is an international chain of coffeehouses, headquartered at Seattle, United States. It is regarded as the world’s largest coffeehouse company as well as leader roaster and retailer of specialty coffee because it has more than 17,000 retail stores in over 55 countries in the world, out of which over 12000 are located in United States, and over 700 are there in the United Kingdom…
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Download file to see previous pages Apart from these food services, they also sell coffee-related accessories and equipment. Starbucks offer and sell all these products and services primarily through its own retail stores, and also offer its trademarked products through other channels like licensed retail stores. Along with these coffee-centric services, Starbucks also has an entertainment division and Hear Music brand, through which it markets media content like music, film as well as books. Importantly, they also pepped up the ambience of its stores to provide the customers a wholesome experience for socializing, which came to be known as Starbucks experience. Schultz always viewed the employees as the company’s “partners”, and optimally involved them in various processes, thus eliciting good productivity from them, which also elevated Starbucks’ performance. With this diverse portfolio, extensive reach and effective functioning, Starbucks became one of the well-known American brands, also achieving good financial figures. However, with the onset of economic downturn in 2008, its financial figures started showing negatively, with its revenues as well as stock prices dwindling. In addition, the strong strategies and performance put forward by its competitors like McDonald, Dunkins Donuts and other area centric coffee chains also ‘ate’ into Starbucks’ customer base. With certain operational inefficiencies also creeping and negatively impacting the sales, its founder Howard Schultz brought himself in. That is, Schultz after running Starbucks since its founding, as its CEO and President, took an hiatus in 2001 and he was succeeded first by Orin C Smith and then by Jim Donald. With sales and financial figures in the red, Starbucks took over the positions of CEO and President in 2008 and initiated a series of strategies mainly focusing on optimizing operational efficiencies and also Starbucks brand and ethical image, through a series of Corporate Social Responsibility (CSR) initiatives. Although, Schultz was able to salvage Starbucks sizably, there is still room for further improvements in the future. Starbucks Story Starbucks Coffee or Corporation was actually founded by three persons Jerry Baldwin, Zev Siegel and Gordon Bowker in 1971. In the initial stages, they sold coffee beans and other coffee related tools or equipments. Howard Schultz joined as an employee in Starbucks at its coffee shop in Seattle. Due to his optimum involvement and hard work, he was given a sort of leadership role and asked to go to Milan, Italy to study and understand the coffee market there. There “he discovered "the romance of the Italian coffee bar" and recognized the opportunity for Starbucks to be a place where people would come to share the experience of drinking great coffee rather than to simply buy coffee beans.” (Grant 2010). Finding that such type of coffeehouses, which not only offered services but also facilitated social experience, were non-existent in United States, Schultz advised the Starbucks management to sell coffee and espresso drinks along with the beans, seeing the potential to develop a similar coffeehouse culture in Seattle (starbucks.com 2008). However, the management team completely rejected his idea with a reason that entering the ...Download file to see next pagesRead More
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