Starbucks strategic action – 2012 to 2015

Question

What are the new main strategic action of starbucks from 2012 to 2015?

Answer

Starbucks, one of the world’s largest coffee houses, has undergone a series of strategic changes between 2012 and 2015 to ensure its long-term growth. It is argued by Urbancova (2013) that maintaining a competitive advantage is only possible through continuous innovation, otherwise the competitive advantage will lose its ability to differentiate a firm from its competitors. Seemingly this was the driving force behind Starbucks’ management’s decision to launch a five-year strategic plan in 2014, in response to increasing threat from competitors (such as Costa Coffee) (Woolf, 2014).
The strategic change was also crucial as Starbucks, an over 20-year old brand, was starting to show a decline, so an adjustment of its strategy was essential (Starbucks Corporation, 2014). In 2014, Matt Ryan, the global chief strategy officer for Starbucks has summarised the new strategic direction in seven concise points. These seven points were (Starbucks Corporation, 2014):

1) Be the employer of choice

2) Lead in Coffee

3) Grow the store portfolio (e.g. international expansion)

4) product development

5) Grow CPG (consumer packaged goods) market share

6) Invest in and develop Teavana, Starbucks’ tea business

7) Increase Digital involvement

To categorise these seven points, it can be concluded that Starbucks primarily focused on redefining the Starbucks’ experience (product development), invest in other food and beverage sectors (other than coffee, a kind of related diversification), develop new markets (global expansion) abroad and respond to the growing trend of mobile-ecommerce by synchronising its in-store experience with smart phones (product development).

References

Geereddy (2011) Strategic analysis of Starbucks corporation. Available at: http://scholar.harvard.edu/files/nithingeereddy/files/starbucks_case_analysis.pdf (Accessed: 21 October 2016).

Starbucks Corporation (2014) Starbucks details Five-Year plan to accelerate profitable growth. Available at: https://news.starbucks.com/news/starbucks-details-five-year-plan-to-accelerate-profitable-growth (Accessed: 21 October 2016).

Urbancova, H. (2013) ‘Competitive advantage achievement through innovation and knowledge’, Journal of Competitiveness. 5(1), pp.82–96.

Woolf, N. (2014) Starbucks faces growing rivals as coffee wars reach boiling point. The Guardian. Available at: https://www.theguardian.com/lifeandstyle/2014/dec/12/starbucks-faces-growing-rivals-as-coffee-wars-reach-boiling-point (Accessed: 21 October 2016).