Ch. 7 Developing Corporate Strategy

Ch. 7 describes corporate strategy and types of diversification. The chapter identifies ways a business can achieve corporate-wide benefits through expansion and diversification that results in economy of scope and revenue-enhancement synergy. 

While Starbucks does not share the same kind of complex multi-business makeup of Walmart or conglomerate G.E., Starbucks is a business that is focused on growth through expansion and diversification. This is clearly not a company focused on "just coffee." Starbucks invests in complimentary products such as juices, teas, and baked goods. 

Kim Peterson, of MSN Money, writes, "The company is clearly trying to expand its business in just about every way possible. It will soon begin selling wine and beer in several restaurants in Atlanta, Chicago and Southern California. It already offers alcohol at some stores in Seattle and Portland, [Oregon]."

Other areas of expansion include plans to enter the premium juice market, having purchased Evolution Fresh last November and its growth in grocery store sales with its packaged coffee and the K-cup pods for Keurig machines. 

In a dynamic business environment, Starbucks must actively seek out ways to differentiate itself from the competition and to continue the track of growth that its been on over the last few years. To do this, Starbucks must diversify and expand in ways that create economies of scope and scale, and play into its mission and vision.