The Strategic Model Of Starbucks's Business Strategy

732 Words 3 Pages
Business Strategy

Campbell et al. (2002) describe business strategy as a ‘’set of theories, frameworks, tools and techniques geared towards achieving and sustaining superior performance.’’
(p. 14) When returning to Starbucks in 2008, Howard Schultz had a clear vision in regards to altering various business strategies seen throughout the organisation. (Hanna, 2014) One of the strategic changes applied was to ensure the original business core values were altogether revisited throughout as to ensure that Starbucks would return to its original roots. (Hanna, 2014)

Employee satisfaction has long remained a key priority at Starbucks with Schultz once remarking, ‘’these people are not only the heart and soul but also the face of the company.’’
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The model is based on eight segments intending to unearth relationships between price and perceived value expected from consumers. (Simister, 2011) Relating the model to Starbucks, Appendix 3 displays that Starbucks lies on the fifth segment, that of focused differentiation. Focused differentiation relays to the belief whereby Starbucks sells products for a premium price in order to develop high perceived value from consumers. (Simister, 2011) Although such a business strategy can produce strong overall corporate identity, it is crucial that Starbucks ensure that certain market segments are not alienated by high pricing strategies. (Saint-Leger, 2015) Anticipation, positioning and response to external sources of …show more content…
From promoting differentiation throughout their product line, Starbucks deliver a high quality product for consumers. Using Bowman’s ‘’Strategy Clock’’, it can be seen that Starbucks operates a focused differentiation strategy in order to create high perceived value from consumers. Creating a convenient service for consumers is also a priority for Starbucks in order to cater for passing trade and have also developed drive-thru service and in 2015 have begun to offer delivery as to enhance the overall Starbucks experience.

Upon return to the organisation in 2008, Howard Shultz has altered various business practices at Starbucks and the result of which has resulted in positive outlooks for the business and has also resulted in high levels of employee

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