Starbucks strategy to stay competitive

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Starbucks

Starbucks is a corporation which was formed in 1985 to do business in the line of roster and retailer coffee. The corporation grew very fast and today is one of the leading roster and retailer of special coffee in the world. The major products the company deals with include rich-brewed coffee, Italian espresso beverage, cold blended beverages, a selection of premium tea and coffee related accessories and equipment. Up to 2006 the company was expanding well and profits were rising stock was also soaring. However, Starbucks downturn occurred unexpectedly making the share price to decline by more than 75% from 2006-2008.During the fiscal year 2008 the company operated retail stores total revenue accounted for 84% of the total net revenue.

Issues

The return of Schultz as the CEO at the beginning of 2008 brought in the organization a shaking in wanting to improve customer service, reignite the connection to customs, and reallocate resources from USA to overseas. Retrenchment occurred in the process and the economic downturn was casing damage to same store-sales margin. Quarterly revenues declined for the first time at the end of 2008 fiscal year.

The company’s core competency was diversification of its product ranges so as to meet the customer needs and demands.

Starbucks strategy to stay competitive in the market included producing coffee beans of high consistent quality, involving the employees in core activities aimed at luring the customers into their product, community relations and social purpose which aimed at upholding human dignity while supplying the products and making profits, proper lay out and design of stores which were aimed at providing un hurried sociability and on-the-run efficiency and lastly Starbucks location i.e. the clustering of more than 20 stores in every urban hub enhanced the experience of creating a local Starbucks buzz and facilitated loyalty to customers.

The company could have opened more retail outlets overseas and venture into new markets so that they cold increase their base of operation maximizing on profits.

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