January 10th, 2018
Formulating business strategy – Strategic Planning
Strategic planning helps entities achieve growth in increasing uncertain environments. Starbucks strategic planning approach can be evidenced by various factors. Firstly, the company has established a mission statement and vision that guides the entity on what it aims to achieve. Through its mission statement, the company establishes six core principles that guide its strategy – the quality of coffee, the employee treatment, their customer service, their store experience, their neighborhood commitment and their shareholder promise (Starbucks Corporation 2010). Such principles have led to establishment of strategies that, for instance, cater for employee welfare, increase operational efficiencies, enhance customer experience in their stores and improve the quality of coffee offered (Starbucks Corporation 2009). An example of these strategies is the iphone applications that better customer experience by providing store locations and nutritional contents of the entity’s products (Starbucks Corporation 2009). Additionally, the entity establishes an environmental mission statement to guide its tackling of environmental issues affecting its business (Starbucks Corporation 2010).
In view of Starbucks internal and external environment analysis (performed earlier), a strategic plan for the entity can be developed. The first category of strategies that the company should seek needs to be aligned to its core competency of quality coffee. To provide quality coffee to its customers, the entity needs to control its sources and coffee brewing processes. With respect to supply, the entity should enter into relationships with farmers by providing them with farm inputs that ensure they supply high-quality beans. Entering into long term agreements with such suppliers would also prevent them from switching into other customers or discarding the farming of the crop. With regard to the product quality, the company should invest in constant research and development activities that seek for better production methods.
Other strategic approaches for the company should be in human resource, product diversification, and foreign market entry. Since human resources of Starbucks directly influence the services provided in the stores, the entity should constantly review its hiring, remuneration and benefit programs to ensure it attracts and retains quality staff. Secondly, with clamor for healthier alternatives among consumers rising, the entity should evaluate other products such as tea that it could offer to its customers. Finally, the entity’s strategy should evaluate entry into foreign markets. Such entry should follow a careful cultural analysis that determines the feasibility of Starbucks-type stores in those countries. Similarly, economic assessment of such countries is necessary to determine whether individuals residing in such areas are capable of paying a premium price for their coffee. Go to part 5 here.