Starbucks Corporate Strategy Essay Example for Free

Starbucks Corporate Strategy EssayStarbucks Corporate Strategy Corporate Strategy fundamentally is bear on with the selection of businesses in which the company should compete and with the development and coordination of that portfolio of business. 1 In the case of Starbucks the unified scheme they nominate implemented is unique to their industry which has allowed them to differentiate from their competitors and is summarized best by Howard Schultz CEO of Starbucks, Were in the tidy sum business serving coffee tree,2 full(prenominal) quality specialty coffee and related products in a European cafe environment. It is clear Starbucks is in a growth dodging utilizing three key techniques that support its Mission, to animise and nurture the human spirit iodin person, one cup and one neighbourhood at a time3. Vertical Integration Tying in with Starbucks Mission, the companies vertical integration with its supply chain from roast its own coffee in one of two of its plants to its involvement with developing and fostering strategic partnerships with topical anaesthetic coffee farmers may be the most important growth strategy the company focuses on.Quality and corporate social responsibility are the pillars of Starbucks vertical integration is the key component to insuring both of these fundamental characteristics of Starbucks are managed. Diversification Starbucks has created related diversification into wholesale distribution by developing coffee based mark products with Pepsi-Cola and Dreyers Inc. that can be sold in grocery stores. The company is as well as expanding into non-related industries by creating an pastime division focusing on the music and movie industry.As Starbucks expands diversification will proceed as important as its vertical integration as it moves through the product lifecycle in the coffee industry. (See addendum A) Horizontal Integration Starbucks has expanded with horizontal integration by acquiring Seattles Best coffee bean and Torreazione Italia Coffee. With the increased competition and new entrants in the coffee industry horizontal integration may become a greater focus for Starbucks. Starbucks Business StrategyAt the business level, the strategic issues are little about the coordination of operating units and more about developing and sustaining a competitive advantage4. In order to examine the Coffee Industrys competitive advantage the use of Porters five Competitive Forces Model should be utilized. (appendix b) Starbucks has gained its competitive advantage by the use of diversification. The company has focused, through vertical integration corporate strategy, on providing the highest quality coffee products in a sustainable practice that is highly identifiable by its guest base.The use of their innovative marketing design with their European Cafe feel and creative diversification with its products has allowed it to be classified as, the most dynamic retail brand conceived over the last t wo decades5 Starbucks faces a high degree of rivalry and a medium degree of buyer power (appendix b). The coffee industry also retains many characteristics of having high Consumer Market Segmentation, which can be supported by the relatively large brace in the price for a cup of coffee and the varying degree in which certain coffee chains are found in certain particular geographic regions and outlets.Starbucks has found a management to incorporate a broad strategy attracting a broad consumer despite the high prices of its products6. This supports that their differentiation strategy is affective and it is clear consumers can identify the high quality of their products and the overall experience of visiting one of their locations. With a high threat of new entrants (appendix b) and the presence of high Consumer Market Segmentation, Starbucks strong differentiation strategy will allow it to remain competitive in light of this high threat.