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Strategic Management
1.Draw the SWOT matrix of the new Starbucks company.
2.Provide examples of the Corporate Social Responsibilities (CSR).
3.What is the competitive strategy used by this company? Justify.
4.Use the five forces of the M. Porter matrix to describe the Starbucks industry, particularly, in Japan.
5.Describe the relationship of Starbucks with its primary stakeholders.
6.Describe the core competency of Starbucks company.
7.What kinds of strategic alliances are used by Starbucks in China?
8.What are the main challenges that this company faces in the Indian market?
9.Assess the competitive advantage of Starbucks in the global market.
Sample Answer
Analysing Starbucks’ Competitive Advantage
Here’s a breakdown of Starbucks’ competitive landscape:
1. SWOT Matrix:
| Strength | Weakness |
|---|---|
| Strong brand recognition | High coffee prices |
| High-quality coffee and beverage offerings | Limited menu customization |
| Comfortable and inviting store atmosphere | Franchise model can lead to inconsistency |
| Loyal customer base | Large, complex supply chain |
| Focus on innovation | Vulnerable to economic downturns |
| Opportunity | Threat |
| Expansion into new markets | Competition from local coffee shops |
| Mobile ordering and delivery | Fluctuations in coffee bean prices |
| Increase focus on sustainability | Rising labor costs |
2. Corporate Social Responsibility (CSR) Examples:
- Ethical sourcing: Starbucks aims for 99% ethically sourced coffee beans.
- Community involvement: Supports local communities through various initiatives.
- Environmental stewardship: Aims to reduce waste and its environmental footprint.
3. Competitive Strategy: Broad Differentiation
Starbucks uses a broad differentiation strategy. They differentiate themselves through:
- High-quality coffee: Focus on Arabica beans, unique blends, and specialty drinks.
- Customer experience: Comfortable atmosphere, friendly service, “third place” concept.
- Innovation: Regularly introduces new seasonal drinks and food offerings.
- Brand image: Strong association with premium coffee and a lifestyle.
4. Porter’s Five Forces Analysis (Japan):
- Threat of New Entrants: Moderate – High initial investment and brand loyalty can act as barriers.
- Bargaining Power of Suppliers: Moderate – Starbucks’ size gives them some leverage, but coffee bean prices are still a factor.
- Bargaining Power of Buyers: Moderate – Customers have choices, but Starbucks’ brand loyalty weakens buyer power.
- Threat of Substitutes: High – Vending machines, convenience stores, and home brewing offer alternatives.
- Competitive Rivalry: High – Japan has a strong coffee culture with established domestic chains and local cafes.
5. Stakeholder Relationships:
- Customers: Focus on loyalty programs, rewards, and a welcoming environment.
- Employees: Invest in training, benefits, and creating a positive work environment.
- Investors: Aim for consistent growth, profitability, and shareholder value.
- Suppliers: Build strong relationships with coffee bean growers and other suppliers.
- Communities: Engage in social responsibility initiatives and support local communities.
6. Core Competency:
Starbucks’ core competency lies in creating a unique coffee experience. This experience combines:
- High-quality coffee beverages
- Comfortable and inviting atmosphere
- Strong brand image and customer loyalty
- Focus on innovation and product development
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