Starbucks: An Alex Poole Strategy Case
Course Concepts, Analysis, and Recommendations
The decline in the price of shares in the Starbucks Corporation due to internal problems and the Great Recession made the company’s shares fall from $39.4 to $6.8 per share in 2008. Managerial change in a company can bring a huge impact on its performance. As Starbucks changed its strategy, its shares traded at $80 per share in 2013. However, coming up with a new product (e.g. Starbucks’ coffee) is a product development strategy that can enable a company to increase sales by enhancing its customer share. This is achieved through Research and Development (R&D) over the Internet, library, and the primary sources.
Moreover, through product mix,Starbucks initiateda coffee bar in one side of the restaurant, whereby the product performed well in the market. In addition, the market competition became harsh from major sellers of general foods and coffee. In such a case, the price needs to be reduced at a reasonable rate to maintain the profit margins, as well as to satisfy the customers. Nevertheless, through application of technology, Starbucks introduced instant coffee in 2009, which was its first innovation to improve its customer satisfaction. Innovation enables a company to venture in other markets. For instance, Starbucks ventured in UK and Japan. In addition, the company had acquisition like the Premium Juice Company to boost its platform, which increased revenue. Acquisitions lead to other investments as well as e-commerce. For example, Starbucks use loyalty card and it is able to compete with its major competitor, McDonalds.
Therefore, it is recommended that for an organization to grow, it should ensure that it applies strategies like the new product development, product mix, and use of technology, acquisitions, and venture in online business. These strategies help a firm to diversify and beat the market competition.