2022

Business-Level and Corporate-Level Strategies of

Starbucks

Zargham KhaWn
Starbucks
9/29/2022
 Starbucks Strategic Management

Contents
Introduction......................................................................................................................................2

Business-Level Strategies of Starbucks...........................................................................................2

Corporate-Level Strategies of Starbucks.........................................................................................3

Functional Areas strategies of Starbucks.........................................................................................4

The Functional Areas...................................................................................................................4

FINANCIAL STRATEGY..........................................................................................................4

The Functional Areas...............................................................................................................5

Inter-relating (Increase sales)...................................................................................................5

Immediate risks........................................................................................................................5

Inter-relating (Provide new products)......................................................................................5

The Function Areas..................................................................................................................6

PRODUCTION STRATEGY......................................................................................................6

INFORMATION TECHNOLOGY STRATEGY.......................................................................6

Mission Statement...........................................................................................................................6

Vision Statement..............................................................................................................................6

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 Starbucks Strategic Management

Introduction
Every performance-leading company needs business- and corporate-level strategy. Long-term
business success requires careful planning. Strategy affects multinational firms' performance.
Starbucks demonstrates the importance of business methods. This successful company shows
that business strategy should be long-term. Starbucks' global growth is intriguing.

Business-Level Strategies of Starbucks

Market and advantage help create strategy. When designing a product or service, every company
considers these two elements. Business-level strategies help the company create a product that
matches customer needs. Starbucks' business tactics vary with its expansion. Starbucks' business
strategies boost its competitiveness. The company's business approach is wide differentiation,
which allows it to produce a range of commodities based on consumer needs. Starbucks is
adaptable. These characteristics allow Starbucks to deliver cheap, tasty goods. The company's
approach handles ethnic, seasonal, and traditional tastes (Melvin, 2012). Starbucks differentiates
across age, gender, and nationality to match customer expectations. Diversification is key to
pleasing non-coffee drinkers. Starbucks seeks client satisfaction.

Starbucks uses business-level tactics to adapt. To attract clients with flexible pricing, a wide
differentiation approach may require cost leadership. Starbucks' cost leadership saves money,
maintains quality, and lowers prices. Starbucks' cafe competition makes it imaginative and smart.
Starbucks' business-level actions prevent competition.

Starbucks makes popular items. Starbucks makes nothing expensive. The company's most
important business-level strategy is wide differentiation. It influences corporate performance and
next steps. The company's success is wide distinction.

Corporate-Level Strategies of Starbucks

Starbucks depends on company strategy. Starbucks' strategic goals are balanced via mergers,
acquisitions, and HRM. Integration and diversification affect company strategy. Diversification
means entering new markets with new products. Starbucks sells coffee-flavored ice cream,
sandwiches, drinks, beans, and equipment. Diversification means creating new products that
meet quality and customer expectations. Starbucks' diversification approach has raised profits,

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 Starbucks Strategic Management

enhanced competitive advantages, reduced new rivals' problems, safeguarded its reputation, and
added outlets (Hutt, 2016). The company continues to impress customers with new products
while keeping its brand and image.

Integration is another corporate-level technique that boosts firm growth (Strohhecker & Größler,
2012). Starbucks is integrating its farms. This reduces unemployment and boosts firm resources.
Starbucks buys coffeehouse companies. Starbucks started selling tea by buying small producers.

Corporate diversification is key. The company may better address customer needs by launching
new products. Starbucks should diversify to understand the market and consumer needs.
Starbucks will satisfy every customer's needs while it pursues excellence and competitiveness.
Competition affects profit and growth.

Functional Areas strategies of Starbucks

The Functional Areas

 Avoid paying the tax, it may against the UK law.

 In this case, customers had boiled up the negative image.
 The competitors will against the company in this point.
 Customers will remember this case and getting the back image.
 The social media defame Starbucks in separate ways.

FINANCIAL STRATEGY

 2007 – Huge addition to long-term debt

 2008 - Restructuring costs implemented
 2009 - Paid off all short term debt
 2009-2010 - Continuous improvement each quarter

The Functional Areas

 Increase sales (e.g. extend the opening hours, deliver leaflet)

 Provide new products
 Do more promotion (e.g. discount, buy one get one free, etc.)

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Inter-relating (Increase sales)

 Strong relationships with suppliers

 Diversification of supply networks
 Sustainability

Immediate risks

 Marketing + Finance
 Marketing: Decide how to promote the company or product
 Finance: Calculate the profit and loss for the promotion

Inter-relating (Provide new products)

 The immediate risk of the campaign against Starbucks’ tax avoidance includes the
chance of boycott of Starbucks. If a boycott really takes place, the sales will decrease
further.
 For example, it will probably fall by 40%. Then, if sales continue to fall, Starbuck
may start to make losses since the sales may have fallen below the breakeven point.
 Technology and product design strategy
 Supply chain management system
 Production strategy
 Sales, marketing and distribution
 Human resources strategy
 Information technology strategy
 Financial strategy

The Function Areas

PRODUCTION STRATEGY
 Quality control processes strong.
 Strong brand recognition
 Joint ventures with Pepsi, Kraft, and Unilever

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 Need to increase advertising

 They value their employees by calling them partners and treating them as such
 High degree of training.
 Strong 'partner' incentive/recognition programs

INFORMATION TECHNOLOGY STRATEGY

 Digital software to assist with design of stores (cuts down costs and time)
 Software for managers for scheduling
 Partnership with AT&T for WIFI
 Partnership with ITunes.

Mission Statement

Starbucks highlights its mission as “to inspire and nurture the human spirit – one
person, one cup and one neighborhood at a time.”

Vision Statement

Starbucks’s vision is to “treat people like family, and they will be loyal and give their
all.”

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References
Hutt, R. W. (2016). Reputation on the line: the Starbucks cases. Journal of Business Strategy.

Melvin, S. P. (2012). Case Study of a Coffee War: Using the Starbucks v. Charbucks Dispute to Teach
Trademark Dilution, Business Ethics, and the Strategic Value of Legal Acumen. J. Legal Stud.
Educ., 29, 27.
Strohhecker, J., & Größler, A. (2012). Implementing sustainable business strategies. Systems Research
and Behavioral Science, 29(6), 547-570.