Part 1

Starbucks is a multinational that has operations in different geographical areas. In the period before 2010, the company implemented a strategy to expand quickly and establish itself as one of the major coffee sellers. A fast expansion rate and the economic crisis of 2008, however, negatively affected operations and caused the company to lose value. In 2010, Starbucks adopted a strategy to enhance its operations by reducing the number of locations and improving the efficiency of its operations. The company increased its focus on its breakfast segment which was its primary revenue source. Starbucks also enhanced focus on the creation of new products and expanding the number of branches in other geographical areas such as the Pacific region. Starbucks created new products by acquiring some existing firms and partnering with others. As a result, Starbucks began selling tea, healthy fruit juices, new types of sandwiches, and yoghurt. Starbucks also started selling some of its products through grocery stores and online channels. The firm further improved the quality of service at its stores. Starbucks also motivated its employees by engaging them more. Over the period from 2010 to 2013, the success of the measures that Starbucks implemented was proven by the increase in the revenues and profits and better performance in countries such as India.

Part 2

Starbucks implemented various strategies to improve its operations. The company enhanced its interactions with various stakeholders. The three main important stakeholders that Starbucks focused on were the suppliers, the customers, and the employees. Starbucks created better interactions with the suppliers through acquiring some of the companies including Tazos tea, Naked Juice, and Evolution Fresh juice. The company entered into partnerships with other companies including Tata and Pepsi-Co. To improve the relationship with the employees, Starbucks engaged them more to increase their satisfaction levels. To create better interactions with the customers, Starbucks created new products including teas, beers and fresh juices to meet the diverse needs of the consumers. The company also enhanced customer experience through making improvements to store outlets.

Additionally, the company collaborated with grocery stores as another distribution channel that previously had not been utilised. The grocery stores were used to distribute products that did not require presence at the store including customer packaged goods such as ground coffee, and newer products such as the Evolution Fresh juices.

Moreover, Starbucks took steps to improve its relationship with the communities within which it operated. Starbucks adopted environmentally sustainable practices to reduce the effects of its operations on the environment. The company also began actively contributing to the political processes, taking positions that would benefit the members of the public, such as condemning the Federal Government Fiscal shutdown in 2012.

Starbucks adopted the use of technology in its marketing and distribution functions. The use of social media in marketing was useful as it enabled the company to access a large number of potential and current consumers. Social media marketing aided Starbucks in its objective of enhancing the customers’ knowledge about its products. Additionally, Starbucks adopted the use of online stores to increase the number of customers that it could access. E-commerce enabled customers to place orders for products online, thus creating an additional revenue stream.

Part 3

Starbucks should be careful not to diversify its products too much and neglect its traditional breakfast coffee business. Creating too many product lines creates the chance that attention on the breakfast coffee business may reduce, leading to a decline in revenue from the central business segment.

While expanding internationally, Starbucks should adapt to the local environment. The stores should reflect the culture and practices of the local people. The company should also consider creating products that are suited to each market. Creating products that are targeted at each geographical area will enhance the performance of the outlets located outside the Americas such as in India and China.

Starbucks should abandon its strategy of maintaining a budget brand alongside a premium brand. The company currently operates Seattle’s Best Coffee, a budget brand that is meant to serve clients that are price sensitive. The company also has Tazo and Teavana tea brands which focus on the low end and high-end markets respectively. The two brands compete against each other, creating the possibility that they may be negatively affecting each other’s revenue. Starbucks should focus on maintaining its premium brand identity to protect its revenue and preserve its image in the minds of the consumers.

Additionally, the company should enhance the flexibility of its employees instead of restricting them to fixed schedules and tasks as was the case in the Playbook employee rules. Encouraging flexibility will enable the employees to respond quickly to the changes in the number of clients during high traffic periods.

 
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