Starbucks: Strategies to Sustain Competitive Advantage

Key Issues Definition of “industry” Pursuit of growth: Suppliers: Coffee? Pursuit of growth: Control of independent vendors, partners, and licensees Suppliers: Quality, stable supply Rivals: Grocery producers, fragmented houses, foreign

Outlook Growth in consumption: 15% per year per capita rebounding to 2-3 cups/day Shift in demand for coffee types/channels: Specialty coffee growing faster than basic More being sold via specialty stores vs. grocers

General Environmental Forces Social Political Technological Global Legal Economic NET EFFECT?

Five Forces Buyers Suppliers Substitutes New entrants Rivalry NET EFFECT?

External Analysis Opportunities: Threats:

Value Chain of Firm Activities Firm Infrastructure Human Resource Management MARGIN Technological Development Procurement Service Inbound Logistics Outbound Logistics Marketing & Sales Operations 21

Internal Analysis Strengths: Weaknesses:

Mission and Goals Mission/vision: Goals: Define industry, values, customers, etc. Overall strategic approach Goals: Financial Strategic

Strategic Recommendations Do XX Value chain activity ‘a’ Value chain activity ‘b’ Result: Eliminates vulnerability to SWOT Do YY Value chain activity ‘c’ Result: Increases extent of experiential differentiation, buffers against new rivals