Starbucks Essay

1282 WordsSep 30, 20126 Pages
Introduction In 2011, Starbucks reported their highest ever annual revenue and operating income of $11.7 billion and $1.728 billion respectively (Starbucks, 2011). Starbucks corporate and business strategies, along with the relevant functional operations of key operating segments demonstrate how Starbucks has been able to achieve the financial strength it has today. While Starbucks is coming off a record year for revenues, there are still a number of organizational risks that Starbucks’ board of directors will need reduce or mitigate going forward. Organizational Corporate Strategy Starbucks is pursuing a growth by concentration strategy. Over the past eight years from 2004 to 2012, Starbucks has opened 9586 new stores internationally, which represents an approximately 122 percent growth in stores (Starbucks, 2012). Starbucks is not only trying to expand the markets served within its primary business, but also it’s continuing to increase the number of products offered within its primary business. Starbucks continues to introduce new brands of hot and iced handcrafted beverages, new choices of baked and fresh food, desserts and store merchandise, such as espresso machines, coffee brewers, grinders, and coffee cups. Organizational Business Strategy Starbucks has become a coffee industry leader utilizing a differentiation business strategy. Starbucks is driven towards providing its customer with the highest quality coffee products and exceptional customer service. Starbucks provides its customers with what they feel is the finest coffee available commercially, combined with an unrivaled café experience with custom prepared hot and cold beverages, comfortable seating arrangements, music, and a community feeling within each store. Starbucks remains effective at implementing this differentiation strategy for three important reasons. Firstly, they successfully

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