Week 8 Assignment

Managerial Policies and Strategies

7 March 2024

Week 8 Case Study: Case 25 - Starbucks in 2020

Task #1: Regarding Starbucks' Strategy in 2020
(A) Briefly describe the following aspects of Starbucks' strategy.
Growth Strategy:
 Starbucks' growth strategy in 2020 was multifaceted, emphasizing global expansion with
a strong focus on increasing its presence in high-growth markets like China, as well as
enhancing the customer experience in existing stores through renovations and technology
upgrades (Thompson et al.).
Strategy to provide a unique coffee experience:
 This strategy involved creating an inviting and comfortable ambiance, referred to as the
"third place" between home and work, where customers could enjoy high-quality coffee
and a differentiated in-store experience, including the engagement with skilled baristas
and a focus on community (Thompson et al.).
Product sourcing strategy:
 Starbucks had a commitment to ethically sourced, high-quality coffee through its Coffee
and Farmer Equity (C.A.F.E.) Practices, ensuring sustainable and responsible sourcing
while maintaining the quality and consistency of its coffee (Thompson et al.).
Product diversification:
 The company continued to diversify its product offerings beyond traditional coffee drinks
to include tea, food items, and alternative beverage options to cater to a wider array of
tastes and dietary needs (Thompson et al.).
Marketing, advertising, and promotion strategies:
 Starbucks employed a mix of traditional advertising and digital marketing campaigns,
loyalty programs, and seasonal promotions designed to enhance brand loyalty and attract
new customers (Thompson et al.).
(B) Does Starbucks have a winning strategy? Your response must demonstrate your
understanding of the three tests of a winning strategy as described in Chapter 1 and be supported
by information in Case #29.
 Starbucks' strategy can be considered a winning one as it aligns with the three tests of a
winning strategy. Firstly, the fit test: Starbucks' varied product offerings, ethical sourcing,
and community-focused stores align with customer expectations and market trends.
Secondly, the competitive advantage test: Starbucks' strong brand, unique customer
experience, and ethical sourcing provide a distinctive edge over competitors. Lastly, the
performance test: Starbucks' financial outcomes, market expansion, and brand value
growth indicate a strong performance in the industry (Thompson et al.).
Task #2: Regarding strategy, policies, procedures, and operating practices at Starbucks in
2020
(A) details the things that you feel Starbucks is executing well
 Strong brand image and market presence.
 Ethical sourcing and sustainability initiatives.
 Effective loyalty programs enhancing customer retention.
(B) describes any problems that you see and the areas where the company needs to improve
 Adjusting to market saturation in the U.S.
 Addressing competition from lower-priced coffee vendors and specialty coffee shops.
 Continuous innovation in product offerings to match evolving consumer preferences.
(C) describes your recommendations to further improve Starbucks' performance prospects. In
your response, justify why your recommendations should be implemented by utilizing evidence
and logical argument.
 I would recommend expanding digital and mobile platforms to enhance the convenience
factor, exploring new markets for further global expansion, and continuous product
innovation tailored to local tastes. These are justified as they align with current consumer
trends towards digital engagement and personalized experiences (Thompson et al.).
Task #3: Regarding Starbuck's mission, business principles, and values.
Describe: (A) the features that characterize and define Starbucks' corporate values and culture;
and (B) the lengths to which Starbucks management has gone to create a work environment that
clearly supports effective execution of the company’s customer-friendly strategy differentiation
strategy.
(A) Starbucks' corporate culture is defined by values of respect, dignity, and a
commitment to excellence, which guide how employees interact with customers and each
other. The culture emphasizes social responsibility, community engagement, and the
importance of ethical sourcing and environmental stewardship (Thompson et al.).
(B) Management has invested in employee training and benefits, store design that
promotes interaction, and technological tools that facilitate service efficiency, thereby
creating an environment where the strategy of customer service differentiation can thrive
(Thompson et al.).
Task #4: INSIGHTS GAINED
Through the case study of Starbucks, my understanding of management’s role in strategy-making
and execution has been reinforced in the following ways:
 The importance of aligning company culture with strategy for effective execution, as a
strong culture is a driver of strategic actions (Thompson et al.).
 The need for a flexible and responsive approach to strategic adjustments, highlighting the
role of leadership in quickly identifying and addressing strategic shifts (Thompson et al.).
 The significance of internal systems and controls in facilitating strategy execution,
showcasing the necessity for real-time data and feedback mechanisms for continuous
improvement (Thompson et al.).
 The insights from Starbucks' case not only underscore the theoretical aspects but also
provide practical examples of these strategic principles in action.