2. Recommendations Report
Status to Date
Relation to Strategic Plan
Risks and Approach
Starbucks, one of the premier coffee brands across world is known to provide exceptional ‘Starbucks Experience’ to consumers through its wide-ranging products. The company has expanded its business well in USA and other countries and intends to maintain its position of market leader. Although its competitors are giving a tough competition to the company yet the innovative strategies adopted have helped it achieve a competitive advantage (Ryan, 2007). This report is based on making various recommendations as per the analysis of the key issues and challenges done in Report 1. These recommendations help the company to get a competitive advantage in the coffee market and maintain its position of being a premier coffee brand. Findings of the report reveal that strategies such as international expansion, employee training, more franchising and introduction of ‘loyalty cards’ can strengthen the image of the company in the coffee market and prepare it to confront various challenges. Recommendations
There can be numerous recommendations that can help Starbucks confront the issues faced by the company in recent years. They can help the company to grow strategically and also become one of the most profitable coffee companies in world. Expanding internationally: Starbucks has been depending heavily on American market. This is one of the most obvious reasons for the company to suffer from low sales. Hence, the company is self-cannibalizing its business in American market. Cannibalization refers to the negative impact of the company’s new product on existing market. Rather than focusing only on American market, Starbucks should open its stores in developing economies and BRICS nation including Brazil, Russia etc. There can be two reasons for its international expansion. Firstly, there are many countries where there is no popular coffee supply chain. Secondly, migrating to other countries will give Starbucks a chance to do product innovation (Ryan, 2007). Franchising: Starbucks can focus more on franchising their stores instead of operating them themselves. This will provide the company a chance to focus on quality building of products and build strategies to attain competitive advantage. It can also help the company to open stores in countries like India that allow 49% of foreign direct investment. Introducing the concept of ‘loyalty cards’: Every business wants loyal customers. Although many coffee chains have focused on price cutting policy but these can’t prove beneficial in long run. Consumers love as per (Ryan, 2007); Starbucks due to its strong image and hence cutting prices is not an ultimate solution to get loyal customers. For this, the company can introduce loyalty cards in which points are added with every purchase by a consumer. These points can be redeemed at Starbucks stores to get discounts or freebies. Employee Training and Motivation: Starbucks must train their employees in order to help them become competent in their work area. Employees are assets for every business and their training plays a vital role in determining the success of the company. It will help employees to get motivated, double their productivity. Implementing different coaching models, product innovation, leadership and building a learning organization where the partners are in the continuous learning zone will help Starbucks success. Corporate social responsibility: CSR or Corporate social responsibility is defined as the company’s contribution to the well-being of society. Starbucks should adopt strategies to contribute towards society. These strategies can be creating jobs, using eco-friendly products and...
References: Ryan, C. (2007). “Starbucks a strategic analysis.”, International Journal of Strategic Management, pp. 67-100
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