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Starbucks' Global Quest in 2006: Is the Best Yet to Come? The Key Elements of Starbucks Strategy as of 2006 Howard Schultz positions the company as the dominant retailer, roaster and brand of specialty coffees and coffee drinks. In 2006 Starbucks continued its international store expansion strategy and planned to open 1, 800 new stores globally. According to preliminary calculations, it could grow revenues by approximately 20 % annually as well as net earnings by 20 - 25 % annually for the next 3 - 5 years. Schultz also examined an opportunity to enter China market along with India, Russia and Brazil. Schultz considered that, in order to continue growth and to make the company a global brand, Starbucks has to be innovative, to take risks, to challenge the status quo and to adapt its vision of who it was, what it did, and where it was headed.
In case the company succeeds, the next years success will repay hard work. Starbucks main competitive advantage is the retail of coffee. The company positions itself as a third place after the work and home as its brand strategy. The company created a need for choice. It didnt choose low-cost leadership and strategy based on low cost, as it didnt choose to sell cheap coffee at lowest possible price. Instead, the company undertakes all efforts to provide customers with best service and unique product, offering an individual approach to each unique customer.
Starbucks utilizes a differentiation strategy that offers not just coffee but a lifestyle. Foreword Howard Schultz did an excellent job as CEO because of the market success and the companys phenomenal growth. When he started to work for the company he undertook all possible efforts to teach employees customer-friendly sales skills. He developed special brochures that made easy for customers to learn about Starbucks selection of products.
In 1983 he went to Milan for a business trip. Schultz left Milan and brought to Starbucks the idea of the Italian passion for coffee drinks and latte, which he decided to make a feature item of Starbucks coffee-shops. Re-creation of Italian coffee-bar culture could become the companys differentiating factor. However, it took time to convince the management to try at least one store designed to sell beverages (the first Starbucks espresso bar). The experiment was successful. However, due to several reasons Schultz had to leave Starbucks and continue his experiments in Giornale.
Several years later, in August 1984, Giornale acquired Starbucks and Schultz was appointed the Starbucks president and CEO. Schultz as CEO Schultz started his activity from defining his business. As far as he was quite successful with his previous experiments, he decided to continue implementing his strategy. Schultz aim was to create a group of people with common vision.
The vision was for Starbucks to become a national company with values and guiding principles that employees could be proud of. He also wanted to engage people in decision-making processes and declared that honesty and openness were very important for the companys success. His strategy was to build a company that values and respects people, inspires them and shares the fruits of success will help the company to achieve its objective to become the most respected brand all over the world. His strategy was based on mutual trust and mutual respect. Schultz did all his best to successfully implement the strategy. The stores were remodeled to look more Italian: a cross between a retail coffee-bean store and an espresso bar / cafe became the Starbucks signature.
The company started market expansion outside the Pacific Northwest. The expansion took time and the company started to be profitable only in 1990 and profits had increased every year since 1990. Schultz evaluated performance of the company and its stores; he reviewed new developments and introduced corrective adjustments. Finally, the company reached his strategic objective and became a profitable and well-recognized worlds brand.
In such a way, we can claim that Schultz was effective as Starbucks CEO. Starbucks Values As far as the main objective was to build a company with soul, Starbucks cornerstone value was that the company would never stop pursuing the perfect cup of coffee and would continue buying the best beans and roasting them to perfection. The company also takes care of environment and claims that it will never pollute their high-quality beans with chemicals. Besides, according to Starbucks environmental mission statement the company is committed to a role of environmental leadership in all facets of their business. Customers are the value of fundamental importance for Starbucks company.
Schultz believes that the companys success heavily depends on customers having a positive experience on Starbucks stores and the employees pay attention to what pleases the customers to make sure the customers are fully satisfied. Starbucks values its employees. The company offers employees good compensation and a comprehensive benefits package predicated on belief that better benefits attract good people and keep them longer. Actually, all Starbucks values are closely connected with the companys strategy. Bibliography Shah, A.
J. Starbucks' Global Quest in 2006: Is the Best Yet to Come? Frostburg h State University.
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Research essay sample on Howard Schultz Companys Success
