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Strategic management

Case study: Starbucks

Prof.Dr. univ. : Bacanu Bogdan

Student: Copaceanu Timeea


1 Product Strategy 10.3 Manufacture Strategy 10.2 Store/ Retail Strategy: “Third Place 10. Promotion and promotional means 6.Strategies 10. Financial analisis 8. Customers 5.1 Starbuck in Romania 2. Products and Services 4.4 Pricing Strategy 10.Conclusions(Recommendations) 2 .6 Marketing Communication Strategy 10.5 Service Strategy 10. The organizational structure 9. Social Responsibility 10.1Romanian competition 3.The SWOT analysis 12. Company presentation (short history and a general presentation) 1. Competition 2.Table of contents: 1. Human resources management 7.7 International Business Strategy 11.

generated a healthy profit from 2014 . and the other four in other important cities: Cluj-Napoca. Currently. there are 18. In 2013 the company generated net profit of 842. relaxing atmosphere with free wi-fi for customers. Howard Schultz. which was visible in the consolidated position of the brand in cafés/bars. The same thing is happening with Starbucks. Every new opening of Starbucks created a lot of buzz and interest.1. and. merchandise and a limited menu selection of food items. Starbucks sold high-quality whole coffee beans.1 Starbucks in Romania Starbucks open his first store in Romania in 2007 in Bucharest because then Bucharest was an ideal location for Starbucks to entry into Central and Eastern Europe. dark-roasted in small batches. The name of Starbucks was chosen in honor of the coffee-loving first mate in Herman Melville's Moby Dick. the European way. The current company logo. Mr. hot chocolate. which for many customers is equivalent with specialist coffee shops.5 million. Schultz convinced the founders of Starbucks to test the coffeehouse concepts in their downtown Seattle store. especially young ones. In 1987. Along with selling high quality coffee beans. Gordon Bowker. Starbucks has become the premier roaster and specialty coffee retailer in the world. teas. Starbucks was the brand which led cafés/bars sales in 2014 with a 1% value share of this very fragmented category. the main centre of Romanian foodservice. Since then. Timisoara. tend to embrace the products and services of strong global brands with high awareness.1. From this location. Howard Schultz led a group of investors that purchased Starbucks from its' founders. In 1982. The company. Eight out of the 12 existing outlets were present in Bucharest. Starbucks offers a variety of speciality coffee drinks. encircled by the store's name. Romanian consumers. 3 . because they thought the name evoked the romance of the high seas and the seafaring tradition of the early coffee traders.000 stores in 62 countries. with it's first shop located in Seattle's historic Pike Place Market.000 euros. with 12 cafes in Romania. the now celebrated CEO of Starbucks. almost double the previous year. from Greek mythology. is a twintailed siren.Company presentation Starbucks originally started in 1971 by Jerry Balswin. Their stores offer a clean. 1. and Zev Siegl. Two years later. joined as director of retail operations and marketing. Constanta and Iasi. where the first Starbucks® Caffe Latte was served. In the present the company has 11 units on the Romanian market but they plan to reach 30-35 units in the next 5 years.

The company introduced its first specialty coffees and drinks in the early 2000s and slowly began making a name for itself as more of a destination coffee shop. McDonald's is also revamping its marketing and advertising strategies. Starbucks has entered into a battle. The tactic has worked around the world. Starbucks began 30 years ago with one store and has experienced phenomenal growth and success. reflected by Starbucks' 2015 revenue of nearly $18. Dunkin' began putting more emphasis on the growth of its coffee business. The tactic has had great success. fighting Dunkin' Donuts and McDonald's for the top position as coffee king. though the company's 2015 revenue of $783 million for 2015 falls substantially behind Starbucks'. Dunkin' Donuts launched its "America runs on Dunkin" ad campaign in 2006. From development. New commercials and advertisements rolling out in the coming year will fall in line with Dunkin' Donuts' approach. but the company recently found that the campaign was not trending as well as it had in its initial years. It is often considered the go-to coffee place to work and socialize. Customer desire and preference greatly influence the fight. Where Starbucks has a more wealthy and upscale feel. 2) McDonald’s At over $26 billion. McDonald's has traditionally been known as a fast food restaurant and is not well-known for its coffee. Starbucks has aimed at creating a place for consumers to stop between work and home. representing itself as a brand for all-American consumers. after introducing flavored and iced coffees in the mid-2000s. However.5 billion. 4 . Dunkin' Donuts approaches customers with traditional advertisements. part of its new approach to marketing. However. McDonald's put its hat in the ring alongside Starbucks and Dunkin' Donuts. pushing McDonald's as a brand for the common American with emphasis placed on embracing people of every educational and cultural background. relying on word of mouth to spread its name. 1) Dunkin' Donuts Dunkin' Donuts peacefully coincided with Starbucks for decades. a concept that corresponds with the company's marketing approach. The company has continued to expand its menu. The company has been using the "I'm lovin' it" slogan for more than 10 years. augmenting its product line with more substantial food items. so each company is fighting to expand menu options and physical store locations to reach and better serve a greater customer base and draw consumers away from the competition. McDonald’s revenue for 2015 was higher than Starbucks' and significantly higher than Dunkin' Donuts. When the spokesman for its initial donut-focused ad campaign retired in the late 1990s.2. McDonald’s has employed research and development (R&D) specialists of various ethnic and experience backgrounds. Competition In the last few years. this is due in part to the fact that McDonald's has a much larger menu. Dunkin' upped the ante and declared war against Starbucks. and formed concepts for physical locations that provide customers a relaxed atmosphere and overall experience. In 2006. For the past several years.

2." Consumers liked the "experience" offered by McDonald's and coffee sales fast-food chain increased numbers of "two digits". in my opinion. Howard Schultz. have become competition for Starbucks as well. the concept of "coffee that experience.1Romanian competition In Romania the first competitor of Starbucks is Mc’Donald. McDonald’s is known for its hamburgers and fries. Better and less expensive Lattes. As an aside. is convinced Daniel Boaje. in its mission to transform Starbucks into a global power. The speed with which open McDonald's coffee is not good news for December 2010. In practice. Starbucks and McDonalds are in different businesses. McDonald's launched internationally. Maxwell House and a campaign of occupation of the local market with cafes that sell beverages like coffee that Starbucks has brought to the fore. In the last decade increased from 100 to over 20. McCafe -I is "about 7% of the turnover of a restaurant ‘we will achieve its leading position in the segment cafes". Folgers is not far behind. The company was launched . two companies that are known for such products. While these two brands currently dominate the dry coffee goods market. Thus. recently. has already become a serious competitor to Starbucks. McDonald's. Starbucks is known for its coffee and lattes. which are usually side by side with traditional McDonald’s stores. head of McDonald's Romania. Currently. which has 65 restaurants in Romania. Dunkin' Donuts and.000 coffee shops in 60 countries. that is. Maxwell House is one of the top-selling lines Kraft Corporation offers. especially because of the difficult times now i have made consumers take into account the 5 . McDonald's compete for customers in terms of dry coffee goods as well. Locally. there are six McDonald's that is integrated and McCafe concept. McDonald’s is also selling coffee and Lattes in its McCafes. In 2005. noted the Brand ubiquitous that it now declares 2000 as Starbucks seeks to become a "McDonald's coffee. when it first opened McCafe in Romania . they are not in complete competition with Starbucks due to their lack of physical stores and additional product offerings.000 Romanian. McDonald's "huge" burger that feeds daily aproximetly 140. All three companies offer coffee beans and ground coffee in retail and grocery stores around the world. In marketing theory. that is. But there are overlaps. and it is one of the best-selling coffee brands." He came close. But McDonald's has stood still and spotted including coffee consumer dollars 3-4.The Retail Coffee Game Starbucks.Starbucks is also selling all sorts of breakfast and lunch items together with coffee and Lattes. according to representatives of McDonald's beverage division. more than any other restaurant brand in the country. former president of the company.

Starbucks’ appeal to this consumer age group through hip. Gloria Jean's. This target audience grows at a rate of 3 percent annually.6 percent each year. Starbucks also has physical stores where you can go in and purchase coffee. Turabo Cafe. Plus. And there are enough competitors." said then Yannis Kalfakakos. Krupps and more. Starbucks appeals to this consumer directly through introducing technology as soon as it comes available. significant market between us and others who are trying to sell coffee ". They have drinkware for the consumer and many gifts available for purchase. focusing on social networking and actively cultivating a “cool” image. Starbucks seemed more focused on keeping up with demand than on expansion. and working to keep its products current as status symbols. operator Starbucks cafes in the local market. Costa Coffee or Cafepedia. hot chocolate.price. They not only have coffee. Starbucks Liberty Center was closed in 2009 after only one year since its inauguration in the commercial center in southern Bucharest. we decided to reconsider our presence in this market to convey brand values Starbucks in the most efficient manner. 4. total 40 percent of Starbucks’ sales. we will create a level renewed differentiation and separation. tea. professional careers and a focus on social welfare. contemporary design that is consistent in its advertising and decor. pastries and other coffee accessories. Suppliers and customers The main customers of the Starbucks: Adults Starbucks’ primary target market is men and women aged 25 to 40. Customers tend to be urbanites with relatively high income. Moreover. Starbucks positions itself as a place college students can hang out. write term papers and meet people. but they sell for the office as well. They account for almost half (49 percent) of its total business. in recent years of crisis. general manager of Marinopoulos Coffee Company. tea and equipment for the home buyer. Young Adults Young adults. among them City Cafe. study. 3. Starbucks has not answered the capital question about his plans in Romania and informed the employees that "we will focus again on the Starbucks Experience. The young adult audience grows 4. "Considering the current economic context and the evolution of Starbucks market in Romania. They also sell equipment from well known manufacturers such as Bunn. aged 18 to 24. 6 .Product and services Starbucks supplies consumers with a delicious variety of coffee and tea products.

and it is an area that Starbucks is pushing. kids and teens form a large part of Starbucks business. Starbucks may not cater directly to kids (and risk criticism about the high calorie and caffeine content of some of its drinks) but it does make its products kid-friendly. Starbucks’ Race Together public relations campaign was widely criticized. the firm uses sales promotions. Starbucks has made its coffees available for direct order online. but an increasing amount of its business is centered on selling whole bean coffees and merchandise. Starbucks’ promotional mix is as follows: 1)Advertising 2)Public relations 3)Sales promotions The company advertises its products through television. 7 . such as the Starbucks Card that customers can use to get freebies.Kids and Teens Kids and teens are also a large part of Starbucks’ target audience. in supermarkets and offered select food service outlets the chance to carry Starbucks’ family of coffee. This component of the marketing mix refers to the communication strategies used to disseminate information about the firm and its products. and the supporting roles of public relations and sales promotions for the company. both mother and child leave with cup in hand. including Starbucks brand. customers age 13 to 17 account for just 2 percent of Starbucks’ sales. Kids go there with their parents. 5. For example. whipped cream topped coffee drinks that are so popular with teenagers. In addition. Teens meanwhile use Starbucks as a place to hang out with friends or study. Complimentary Products Specialty coffee drinks account for around 75 percent of Starbucks’ sales. Whether the focus is on the steamed milk that Starbucks’ baristas refer to as “babyccinos” or the sugary. Seattle’s Best and Starbucks VIA. which has not always been successful for the business. print media and the Internet. These products give consumers a chance to have the “Starbucks’ experience” at home. but most items for kids are purchased by the parents. The company infrequently uses public relations. This part of Starbucks’ marketing mix shows the core significance of advertising. caffeinated. offering special child sizes for instance.Promotion and promotional means Starbucks Coffee’s Promotions Starbucks promotes its products mainly through advertising. Together.

the company maintains its high-end specialty image. In addition. and free drinks 8 . and one neighborhood at a time” . Its mission is to inspire and nurture the human spirit “one person. Starbucks believes that it is important to hire those not just for the ability to be trained in cafe work and customer satisfaction. To work at Starbucks is much like working with friends. and vision insurance (Obloga. Starbucks provides all employees and their same-sex or opposite sex-partners comprehensive health benefits that include medical. dental. Starbucks additionally offers their employees benefits such as income protection.The company is well-known for its ethical sourcing of coffee from farmers all over the globe and environmental leadership (by 2015 all its cups will be reusable or recyclable). It keeps employees or “partners” frequently informed. dental. respects. thereby helping the business maintain its premium brand image. one cup. its employees are vital for its growth. Starbucks has tried to develop its human resources practices and make them stronger to the extent that employees have better relationships with their managers and feel connected to the organization as a whole. 6. stock options. Starbuck’s has gained admiration and recognition by being a pioneer in offering the same benefits to part-time workers as are offered to full-time employees. Benefits also cover alternative medical treatments. its website claims. the company understands appreciates. saving plans. Employees are made aware of the company’s history and learn how to perform coffee preparation and use a cash register. and vision care as well as tuition reimbursement. “First Impressions” has given insight to baristas as how to interact with customers in terms of service principles. Through this pricing strategy. Starbucks is also company that practices open communication. and includes different kinds of people. such as McDonald’s Premium Roast. helping the business grow and thrive. The company’s coffee products are more expensive than most competing products. This part of Starbucks Coffee’s marketing mix directly relates with the firm’s generic strategy. Starbucks has offered a variety of training programs to provide employees sufficient knowledge of the company’s values and how to foster it amongst their customers. but also those with an aptitude for social consciousness. such as hypnotherapy and naturotherapy.Starbucks Coffee’s Prices and Pricing Strategy Starbucks uses a premium pricing strategy. 2011). partner discounts. its senior leaders frequently holding “Open Forum” events to answer employee questions and mitigate issues or concerns. Human resources management The Starbucks Corporation sees its employees as a key part of its view of itself as a business serving the community. It is a company that also embraces diversity. This pricing strategy takes advantage of the behavioral tendency of people to purchase more expensive products on the basis of the perceived correlation between high price and high value. It is also renowned for its community involvement through volunteer work in neighborhoods where stores are located. they learn the right kind of communication skills to interact optimally with customers in order to create the environment that Starbucks aims to promote. Such benefits include health care. vacation.

an increase of 10.6%. Starbucks closed most of its stores in 2008 for a full day training event. Another unique benefit of Starbucks is their“Adoption Assistance Program. compared to an operating loss of US$325. Starbucks wants them to have coffee knowledge and product expertise. One activity involved pulling an espresso shot and then evaluating and reflecting upon the process and the product. known as “Perfect the Art of Espresso. For example.447. compared to a net margin of 0.” was held to help baristas deliver high-quality espresso. 9 .8 million for the fiscal year ended September 2014 (FY2014).4 million in FY2013.on a regular basis. Starbucks believes its baristas are the key feature to the Starbucks experience and customer satisfaction. The training event.Financial analysis Financial Performance The company reported revenues of (US Dollars) US$16. The operating profit of the company was US$3.” which reimburses employees a certain amount of expenses incurred during a child adoption process stated that such benefits serve to increase employee motivation.1% in FY2013. Fundamentally. and retention. This highlights the degree to which the company values the training of its baristas and views the importance of their role in the Starbucks experience 7.081. recognition.1 million in FY2014. In FY2014. providing great customer service. to make sure that customers were delighted and served coffee to high-quality standards. (Did it take too long or too short a time? Was it the right color?).6% over FY2013. Staff discussions about how the training would be of use to customers occurred at each store. they also assist in decreasing employee turnover. the company recorded a net margin of 12.

10 .

The functional structure feature of Starbucks Coffee’s organizational structure refers to grouping based on business function. market. the company was expanding rapidly. Also. Each division head is given a high degree of flexibility in adjusting strategies and policies to suit specific market conditions. However. This feature of Starbucks Coffee’s organizational structure supports closer managerial support for geographic needs. Teams are used in different parts of Starbucks Coffee’s organizational structure.The organizational structure Starbucks has a matrix organizational structure.Functional structure 2.Teams Functional Structure. The functional structure feature of the firm’s organizational structure facilitates top-down monitoring and control. This feature relates with hierarchy in the organizational structure of Starbucks. These divisions address product lines. In each café. Each geographic division has a senior vice president. each Starbucks manager reports to two superiors: the geographic head (e. (c) Southeast. Middle East. Teams. At present. another division for baked goods. For instance. These departments are most pronounced at the top levels of Starbucks Coffee’s organizational structure. Starbucks experienced significant decline in sales in 2007. such that it shifted focus away from customers toward strategic global expansion. This feature of Starbucks Coffee’s organizational structure enables the company to provide effective and efficient service to consumers. This decline was 11 . Product-based Divisions. with the CEO at the top. the firm has teams organized to deliver goods and service to customers. Geographic Divisions.g. The following are the main features of Starbucks Coffee’s organizational structure: 1. For example.g. which is a hybrid mixture of different features from the basic types of organizational structure. By 2007. and another division for merchandise like mugs. This feature of the firm’s organizational structure enables focus on certain product lines. Starbucks Coffee’s organizational structure also involves geographic divisions. the corporate HR department implements policies applicable to all Starbucks cafés. such as at the corporate headquarters. (b) Northwest. In this way. and (d) Northeast.Geographic divisions 3. Corporate HR Manager). Starbucks has reformed its organizational structure over time. a finance department and a marketing department.8. the company has an HR department. particularly the Starbucks cafés. President of U.S. the company has three regional divisions for the global market: (a) China and Asia-Pacific.Product-based divisions 4. Starbucks also uses product-based divisions in its organizational structure.S. Starbucks Coffee’s organizational structure involves further geographic divisions: (a) Western. However. Russia and Africa. (b) Americas. Starbucks effectively develops and innovates its products with support from its organizational structure. in the U. For example. Starbucks has a division for coffee and related products. and (c) Europe. teams are most notable at the lowest organizational levels. In this way. Operations) and the functional head (e.

and employees become advocates of the company as well. Plus. the current organizational structure of Starbucks is a result of this reform to improve customer experience and the firm’s financial performance. Starbucks develops community stores that partner with local nonprofits. Starbucks refers to the planet as their “most important business partner. When Howard Schultz resumed the CEO position in 2008.Social responsibility Starbucks’ social responsibility strategy is based on three pillars: Community. First and foremost. You can find a list of these community stores here. Here’s what the company does to have a positive impact in each of those areas. 93% of consumers have a more positive image of that company. Starbucks in turn donates $0. To do this. The nonprofits these stores work with offer services aimed to meet the needs of the communities they’re located in. studies show that when companies support social or environmental issues. and focuses on diversity and inclusion in the workplace. consumers notice.worsened because of the lack of focus on customer experience.” and takes a comprehensive approach to reducing their environmental impact. Starbucks’ strategy and resultant outcomes are proof positive of that study. In fact. New regional divisions were created.05 to $0. Starbucks decided to invest in its people and the communities they work with. and the Environment. and teams at Starbucks cafés were given better training. they see less turnover. and focuses on making positive changes for the communities they work with and serve. Thus. Starbucks tries to be as environmentally friendly as possible in every aspect of their operations. To have a positive impact on the communities it works with and in.000 veterans and military by 2018.15 per transaction to the nonprofit partner. are committed to recycling and conserving water and energy. and pursue strategies that address climate change on a global level. 12 . Ethical Sourcing. Generally. when companies like invest in their people. they build LEED certified stores. he changed Starbucks Coffee’s organizational structure to bring back focus on customer experience. When a company puts people first. Starbucks has pledged to hire at least 10. 9.

10. It is a must that customers feel the uniqueness of enjoying their Starbucks coffee experience. salad and grain bowls.Strategies 10. smoothies and teas. Handcrafted Beverages: Fresh-brewed coffee. Frappuccino® coffee and non-coffee blended beverages. Creating unique and relaxing “experience” and “atmosphere” for people has been very important for the company as they have realized that this is one of the strongest concepts attached to the company. sandwiches. mugs and accessories. 10. salads. oatmeal. packaged goods. yogurt parfaits and fruit cups.3 Manufacture Strategy By having the backward integration theory which tries to cooperate and engage their suppliers in order to prepare good and sustainable coffee. 10. books and gifts. hot and iced espresso beverages.and tea-brewing equipment. 13 . Verismo System™ by Starbucks®. Merchandise: Coffee.1 Product Strategy Becoming innovative and creative with their products diversification Coffee: More than 30 blends and single-origin premium coffees.2 Store/ Retail Strategy: “Third Place” Focused on creating the“third place experience” for everyone to go to between home and work. music. The coffee giant achieved these using creature comforts. Fresh Food: Baked pastries. Robust Desing manufacturing. Starbucks Refreshers.4 Pricing Strategy Premium pricing strategy based on penetrating market pricing which tries to enhance the market segments in middle class society based on the emerging economics. such as comfortable furniture and relaxing music 10.

Starbucks has actualized a positive and welcoming workplace for its employees. and quality at an affordable rate. Starbucks marketing strategy has always focused onn“word-of-mouth” advertising & social media strategy 10.The SWOT analysis Strengths The main strength of Starbucks is its strong financial performance which has resulted in the company occupying the number one spot among coffee and beverage retailers in the world The company is valued at more than $4 Billion which is a key strength when compared to its competitors The intangible strengths of Starbucks include its top of the mind recall among consumers and by virtue of its brand. and the company strives to “personally” join in the contest.10. "Starbucks on every corner" strategy has allowed Starbucks to dominate local markets. The company is known for its pioneering people management in an industry where people skills and soft skills make the difference between success and failure. The company is the largest coffeehouse in the world and because of its size and high volumes.7 International Business Strategy Internationalization of Starbucks by having more than 19. On their website. 11. the company enjoys a dominant position in the worldwide market for coffee and beverages.6 Marketing Communication Strategy The Starbucks marketing strategy has even expanded to create a community around their brand. In other words. which symbolizes excellence. it can afford to price its products in the premium as well as the middle tier range to attract more consumers.000 stores all over the world The company's aggressive make the Starbucks store conquer in every large city in the world.5 Service Strategy Provide excellent services through customer service Giving the premium services for their customers Make the customers to have “ Starbucks Experience” by making them become loyal and repetitively buy their products Customer Handling by giving customer-based service 10. 14 . which translates into happier associates serving customers in a superior way leading to all round benefits for the company. individuals are encouraged to express their experiences with Starbucks history.

The company prices its products in the premium to the middle tiers of the market segment which places its products outside the budgets of many working consumers who prefer to frequent McDonald’s and other outlets for their coffee instead of Starbucks. the company has also been accused of violating the “Fair Coffee Trade” principles that were put in place a few years ago to tackle this precise problem. Further. the increase in the prices of dairy products impacts the company adversely leading to another threat to its profitability. Opportunities The company has an opportunity to expand its supplier network and expand the range of suppliers from whom it sources in order to diversify its sources of inputs and not be at the mercy of whimsical suppliers. The company has come under fire in recent times for its procurement practices with many social and environmental activists pointing to the unethical procurement practices of coffee beans from impoverished third world farmers. Further. The company can significantly expand its network of retail stores in the United States as part of its push towards greater market share and more consumer segments. is acutely dependent on the price of coffee beans as a determinant of its profitability. Starbucks also has the opportunity to expand its product offerings to take on the full spectrum food and beverage retailers like McDonald’s and Burger King as the consumer segment which these retailers target is expanding leading to more business opportunities for Starbucks to take advantage of. this would also help the company in becoming less sensitive to the prices of coffee beans and make it resilient against supply chain risks. which represents a lucrative opportunity for the taking. This opportunity ties in with the other opportunities described above related to the expansion into newer markets.Weaknesses The company is heavily dependent on its main and key input. which is the coffee beans and hence. Threats The company faces threats from the rising prices of coffee beans and is subject to supply chain risks related to fluctuations in the prices of this key input. The company has a huge opportunity waiting for it as far as its expansion into the emerging markets is concerned. must diversify its product range to reduce the risk associated with such dependence. Further. The company must immediately diversify its product range if it has to compete with full spectrum competitors like McDonald’s and Burger King in the breakfast segment which is rapidly growing as a consequence of compressed schedules of consumers who would like to grab a bite and drink something instead of making it at home. diversifying into newer consumer segments. the company can expand into these countries and other emerging markets. With a billion consumers likely to join the pool of those who want instant coffee and breakfast in China and India. This means that Starbucks is overly price sensitive to the fluctuations in the price of coffee beans and hence. and increasing its footprint across the US and globally. 15 .

Starbucks has fought litigation against those misusing its brand and famous logo.  We can see that Starbucks invest very little in advertising and marketing initiatives.  Further build and retain customer loyalty.  Also as consumer tastes and lifestyle shift towards more snacks and beverages options. Starbucks should tailor its menu’s and expand to give more healthy product offerings in its mix. the company faces a tough challenge from local stores that are patronized by a loyal clientele. 16 . It would be recommended that Starbucks make significant investments in advertising and marketing initiatives in the face of increased competition in the market. Finally.Conclusions(recommendation) In conclusion I want to mention that i like starbucsk coffee and this is the reason that I choose to write this project about this company and my recommandations for starbucks are:  Starbucks has great growth opportunities in Tea and Fresh Juice products mix. it faces significant threats from this aspect. 12. Starbucks has to expand into emerging markets as a necessity as the developed markets that it has traditionally relied on are saturated and given the fact that the ongoing recession has made the going tough for many retailers. as mentioned earlier. which is not enamored of big brands. by building on beta concept of on-the-go home delivery. In other words. Starbucks faces significant challenges because of its global supply chain and is subject to disruptions in the supply chain because of any reason related to either global or local conditions. As with other multinational retailers in the emerging markets. The company faces intense competition from local coffeehouses and specialty stores that give the company a run for its money as far as niche consumer segments are concerned. They should build up theseproducts along the same line of their core coffee products.The company is beset with trademark and copyright infringements from lesser-known rivals who wish to piggyback on its success.

starbucks.Bibliography:  http://scholar.harvard. Kevan Scholes and Gerry Johnson 17 .edu  http://www.academia. Michelly  EXPLORING CORPORATE STRATEGY/by Gerry  The starbucks experience-5 principales to turning ordinary into extraordinary/by Joseph  http://www.