Diversification Strategy of Starbucks - Essay Example

In the highly competitive business environment, diversification strategy of Starbucks would greatly facilitate it in maintaining its niche market position. The falling revenues of Starbucks during the financial crisis of 2008 had witnessed tremendous comeback. Howard Shultz, the founder CEO had been brought back for spectacular turnaround of the company. The company was not able to face the stiff competition and lacked leadership initiative to introduce new ideas and format that would meet the challenges of the times.

Shultz’s turnaround strategy was fundamentally based on meeting changing demands of the people through customization and improving customer service. Both the issues have emerged as vital ingredients of success that influence customer purchase behaviour and challenge the status quo of companies that becomes complacent in its performance and growth.

Forging strategic business alliances become necessary business tools in the ever expanding and competitive global environment. In the fast transforming business dynamics, firms, therefore, are increasingly adopting new ways to meet the challenges of the evolving business compulsions.