Starbucks has overcame obstacles through its shorts history in business. They deliver an experience of commitment to customer attention and review their operations carefully. They also created a matchless primary product allowing them a competitive advantage over their market. Their choices delivered consistent returns for some years, but not all of their hard work was successful. To address their issues of competition and unrelated diversifications, Starbucks must choose an appropriate global strategy and utilize opportunities from diversification.
Currently Starbucks has expanded beyond its U.S. origins. They have 8078 Company operated stores in the Americas, 826 in EMEA and 882 in China/Asia Pacific. In order to have advantage over their competitors overseas, Starbucks needs to increase their company operated stores over licensing stores. Licensing has its advantages for quick expansion without the risk, but licensing overseas doesn’t allow much control over manufacturing, marketing and strategic functions. If they are able to own more company operated stores they can pursue a localization strategy. This strategy allows Starbucks to increase profitability by customizing its goods and services, so they can hit the target for that market location. Increasing their company operated stores ensures their company can target their market effectively.
In addition to their endeavors Starbucks is in the works of trying to deepen the company’s involvement with health and wellness. In order to make this a successful endeavor, Starbucks needs to choose their approach based on an unrelated diversification. This corporate-level strategy is based on a multiple business with similar organizational competencies to increase the performance of all the company’s business units. Schults the chief executive officer has a great idea for their involvement with health and wellness, but needs to focus the company effectively by targeting their image to encourage their consumers to pursue a healthier lifestyle. Their pursuits should acquire companies with like goals and involvements to increase their overall profits and performance of their units as a whole.
Evaluate each alternative. Critically assess the alternatives defined above. Describe the implications and key steps for implementation of each alternative. Consider external and internal factors and other relevant trends. Once again, utilize course texts and other resources to enhance your assessment.