Crafting and Executing Strategy
Essay Preview: Crafting and Executing Strategy
Report this essay
Assignment 1: Crafting and Executing Strategy
The importance of a Strategic Plan for the Success of Starbucks
Starbucks foremost long term corporate strategy connect with where it serves its coffees, and how many outlets it believes will help it reach market dominance (Moon & Quelch, 2003). This is because Starbucks believes that the key to its success and its ability to expand so quickly internationally, is linked it the companys focus on providing a locally relevant experience but maintaining its positioning as its customers third home (Moon & Quelch, 2003). In other words, the company gains its strength, not from rapid expansion, but where the corporation adapt itself successfully to its surrounding by bringing together demographic evidence but aspects of a global culture of coffee-drinking to an increasingly sophisticated (or self-perceived as sophisticated) public. At the same time, the company has expanded locations so quickly that it often begets criticism of what is distinguished as too-aggressive practices (Bussolini, 2004) and even self-destructive location cannibalization (Thompson & Arsel, 2004). In fact, in recent years the companys market share has been lagging and revenue growth along with it (Fortune 500, 2010). Since 2007, Starbucks has closed 900 coffee shops and lay off close to 7,000 employees (Fortune 500, 2010). For this reason, it is essential that the company regroup and create a new strategic focus.
The mission statement Link to the Success of Starbucks. Starbucks current mission statement is to inspire and nurture the human spirit – one person, one cup and one neighborhood at a time (Starbucks, 2012), which ties in with its strategy to support its marketing efforts of creating a comforting, third-home environment. The mission is a link to the companys strategy to be experts in what has referred to as globalization (Thompson & Arsel, 2004) whereby their global branding is adjusted to meet the needs of local communities. As Thompson and Arsel (2004) state, this is key to building market strength internationally, as,
anthropological studies have built a strong empirical case that, contrary to the homogenization thesis, consumers often appropriate the meanings of global brands to their own ends, creatively adding new cultural associations, dropping incompatible ones, and transforming others to fit into local cultural and lifestyle patterns … (p. 631)
Bussolini (2004) expands on the concept Starbuck constructed and continues to elaborate upon to define and sell coffee, defined by the postmodern principle of pastiche: juxtaposing words, images, and ideas from widely different sources to create something new. In other words, the company gains its strengths not only from rapid expansion, but expansion in such a way that the corporation is able to adapt itself successfully to its local surroundings while bringing together not just demographic evidence but aspects of a global culture of coffee-drinking that appeals to an increasingly sophisticated (or self-perceived as sophisticated) public (Welsh, Raven, & Al-Mutair, 1998).
Vision Statement and How it Supports Starbucks Mission
The companys vision is linked to serving five key stakeholders, namely its partners (employees), stores, customers, neighborhood and shareholders, as well as its perceived sixth stakeholder, the coffee itself (Starbucks, 2012). This is reflective of the overall mission of the firm because Starbucks demand for its products and services strongly relies on the firms ability to engage consumer lifestyle identities. Because of the recent global economic crisis, this is a central focus. People are likely buying less expensive coffee, and even if they are returning to Starbucks after the recent recession, they are buying fewer products or products that do not cost as much.
For these reasons, maintaining a strategic focus on lifestyle is a means by which Starbucks can engage consumers to remain loyal during difficult times. The focus is on each locations ability to provide comfort and community, rather than the speed in its operations. Is this strategic focus on place supportive of Starbucks mission? From a sociological perspective, Gaudio (2006) states that it is because it is the location that provides Starbucks its raison detre: Starbucks customers attach meanings to the “locations and settings in which casual, social interactions take place, and to the activities that accompany them,” (p. 659). By replicating this experience in different places all over the world, each with their own combination of local and global, cultural appropriations, Starbucks customers extend meaning and depth to their coffee purchases. The basic production process requires a barista, or coffee server, to create a beverage by hand within the Starbucks location. At the same time, the organization of a company and its human resources needs to be able to shift directions quickly, even with a vast international organizational size and relative lack of flexibility (Teece, 2010). For Starbucks, therefore, a vision that is the focus on service and community may need to be temper with other objectives over the short and long term.
Five Key Objectives for Starbucks, and Mission/Vision Justification of these Objectives
The first