Starbucks Report

5887 Words24 Pages
Application of Strategy Dynamics:
Starbucks Corporation Pascal Gambardella, Ph.D. CSC 12708 Chilton Circle Silver Spring MD, 20904 301-346-5398
Strategy Dynamics (Warren, 2008) provides a quantitative, resource-based approach to understanding a firm’s performance over time. This paper describes a strategy analysis of Starbucks Corporation using Strategy Dynamics. It demonstrates the usefulness of this approach in addressing business performance issues for a realworld company. The strategic architecture, a key
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The following sessions discuss three possible issues confronting Starbucks.
1.2.1. Less Discretionary Income?
Because of current, poor economic conditions, customers may have less discretionary income to spend. The pool of potential and active Starbucks customers may decrease based on these conditions.
Yet other companies are doing well despite the poor economy. Lauren Shepherd of
AP reported that McDonald’s same store sales rose 8.5% in October 2008. She speculated that people were “seeking value” and going to McDonalds. McDonalds and Starbucks do cater to different market segments with some overlap. However, perhaps Starbucks can also improve its performance despite the current economic crisis. 1.2.2. Expanding too Fast?
Has Starbuck’s expanded too fast by opening too many stores each year? In 2008,
Starbucks decided to close 600 stores in the US – that is about 8% of US companyowned stores. One way to increase the number of customers is too keep opening new stores. However what is a good rate to do this?
Are there too many Starbucks stores in any given location? I went to the Starbuck’s website and found the stores within an ever increasing area around my home. The results were: 4
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