Sunday, June 9, 2013

Ch. 1: Introducing Strategic Management


In chapter one, we are introduced to the concept of strategy, "the coordinated means by which an organization pursues its goals and objectives." This chapter highlights the interconnected parts of the strategic management process including establishing a vision and purpose for the organization, setting goals and objectives, assessing the external and internal environment, and creating an action plan to meet objectives and create value for the organization's stakeholders. The role of the strategic leader is to successfully implement the organization's strategy by making implementation lever and resource allocation decisions and developing support for the strategy from key stakeholders. (Carpenter, Strategic Management)

In this blog, A Look Into Starbucks, we'll explore the various elements of Starbucks' strategy as they relate to the concepts covered in our text. With over $13 billion of revenue, Starbucks is #208 on Fortune Magazine's Fortune 500 list and is the third largest food service business on the list after McDonald's and Yum Foods. (Fortune) With over 18,000 stores world-wide, Starbucks has grown considerably since its foundation in 1971. 


This week, I'd like to highlight some of the important characteristics of the Starbucks strategy that has allowed this company to achieve financial success and turn itself into household name in America and throughout the world:


Starbucks is all about atmosphere. One of the firm's goals and key strategic moves has been to bring the luxury coffee experience to Americans for an affordable price. They emphasize comfort, providing a relaxed environment for customers to break away from the hustle and bustle of daily life. Unlike McDonald's or other food service retailers, Starbucks emphasizes comfort over convenience or speed.


Starbucks offers high quality products. Their selection includes their trademark coffee, hot and cold beverages, sandwiches, smoothies, and desserts. Their product decisions are based on customer feedback and they are very successful in responding to customer demands. For example, over time they have been creating more healthful options, using more wholesome ingredients, providing nutrition information on their website, and adjusting portion sizes to meet customer demands. The company also sells books, mugs, cups, coffees for home, instant coffee, coffee makers, and other products.


Starbucks manages a customer loyalty program that offers deals and discounts that make customers feel valued by the firm and keep them coming back.


Starbucks strives to be a good corporate social citizen, investing in many admirable causes.


 Starbucks expands internationally. It fosters healthy business relationships with communities all around the world, recently creating 500 new stores in China. (Mourdoukoutas)


In my next entry, we'll look at Starbucks' mission and vision, and the role of CEO Howard Shultz.


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