Starbucks Strategic

Decent Essays
Starbucks – Strategic Management Prowess Efficacy
Today we stand witness to a new coffee era, one made up of Caffé Lattes, Espresso Macchiatos, Cappuccinos and Frappuccinos. Specialty Coffee is here to stay and no one will be more eager to tell you that than Howard Schultz, CEO of Starbucks, the world’s largest specialty coffee bar. In 1993, Starbucks continued its aggressive expansion and moved into the East Coast market by establishing a presence in Washington, D.C. This expansion has continued and today Starbucks operates more then 15,800 stores internationally and employs roughly 140,000 employees. It grosses 11.7 billion in annual revenue and is opening 5 new stores every day. (Starbucks Corporation, 2011)
Starbucks competes with
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The objective of any firm trying to dominate or monopolize the specialty coffee industry would be to create defendable sources of competitive advantage through the use of barriers to entry and a horizontal or organic hierarchy that could outpace competition in innovation. Results of the five forces analysis would suggest, given the unlikely prospect of a price war and the negative repercussions of one, that price superiority alone would be an ill-advised approach.

Starbucks’ Success Factors

First-mover advantage
When Howard Shultz purchased the assets of Starbucks on August 18, 1987, he immediately set in motion an aggressive growth strategy targeted at the unique consumer base the specialty coffee industry attracted.

Strategic expansion to east
Chicago was chosen as the first major eastern expansion target because it presented enormous opportunities being located in the heartland of the two largest basic coffee companies in the United States. The first of these two companies was Folgers, part of the food and beverages division of Procter & Gamble, and the second company was Maxwell House.

California Expansion
California simply represented a vast market with an ideal demographic makeup and open attitude toward high quality and innovative foods. Los Angeles was chosen to be the
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