Starbucks’ Strategic Planning & Management Free Essay

This paper seeks to analyze Starbucks’ strategic planning and management, strategy formation and implementation, strategic leadership, Starbucks culture and ethics, and global trends.

Case Study


Strategic planning and management are very important for every company in order to maintain their competitive advantage in their respective industry. Basically, strategic management offers an in-depth knowledge for the development and enactment of business plans in order to attain a long-term objective which takes into consideration the internal and also external variables within the enterprise environment (Bergh et al., 2016). Essentially, it includes an incorporated, a future-oriented management viewpoint is broadly goal-centered, forward thinking as well as based on performance. Starbucks is a reputable company that is among the top in the coffee retailing industry (Bergh et al., 2016). It is an international company operating in many countries worldwide. This company has been successful for a long time and has made significant expansion worldwide. Its success is attributed to its strategic planning and management. The study of Starbucks Corporation takes one on a multidimensional journey through the organization’s culture, its domination in the coffee retail industry and the establishment of a brand synonymous with integrity, longevity as well as loyalty (Starbucks.pdf, n.d.). It also gives a better understanding of the development and advancement of Starbucks into an international giant as well as the strategic planning and management they applied to get there starts with the origin and background information of this company. Therefore, this paper seeks to analyze Starbucks’ strategic planning and management, strategy formation and implementation, strategic leadership, Starbucks culture and ethics, and global trends.

Background and contextual information

Starbucks Corporation is among the top and successful coffee retailer that is highly admired. This company has developed from a single coffee shop situated in Seattle 33 years ago and transformed into a $4.1 billion company (NASDAQ_SBUX_2017.pdf, n.d.). Its headquarters is located at Seattle, Washington. It offers tasty beverages, proprietary coffee blends accompanied with a strategic relationship which small business can learn from Starbucks. Actually, Starbucks as a specialty in coffee retailer is an American pride in the 21st century  (NASDAQ_SBUX_2017.pdf, n.d.). Starbucks is actually regarded as the most successful company today and has developed from a single store thirty-three years ago in Seattle to 5,945 retail shops within the United States and 2392 retails in twenty-eight countries  (NASDAQ_SBUX_2017.pdf, n.d.). Moreover, Starbucks has influenced people on how they drink coffee. Notably, Starbucks successfully changed pedestrian commodity to a top-notch accessory. The company has established a “Starbucks lifestyle” which people still continue embracing in the United States and worldwide.

Strategic planning

Starbucks uses swot analysis, pest model and Porter’s five forces as their strategic planning model. However, Starbucks adopts the following strategic planning process:

a)    Outlining the phases of the strategic planning process

The strategic planning process entails 5 stages:

  1. Development of the mission statement: Starbucks begin by developing the mission statement which enables it to clarify its business vision, identify short and long term goals as well enabling employees to have a good understanding of their duties and roles in the organization  (NASDAQ_SBUX_2017.pdf, n.d.). This mission statements also gives Starbucks its unique identity and definition of its purpose. The mission statement for Starbucks focuses on nurturing and inspiring the human spirit by providing one cup to every person within one neighborhood every time. The mission statement suggests that Starbucks ardent to make sure that the company’s expansion strategies do not in any way undermine the company’s core values of providing high-quality products.
  2. Environmental analysis: the second stage entails undertaking both internal and external environmental analysis to determine the factors impacting Starbucks’ operations. Environmental analysis through situational analysis entails applying various tools which help in analyzing the organization’s competitive advantages as well as challenges facing it. According to Starbucks, before it expands to a new market, it first undertakes extensive research define its potential clients’ preferences and as well undertake the adjustment of the menu in order to suit the clients’ needs (NASDAQ_SBUX_2017.pdf, n.d.). For example, Starbucks sells a small amount of sweet espresso as well as the latter within the Japanese market since the consumers there do not like sweet coffee products. Within the American market, the company serves a lot of sweet espressos because most of the local consumers like them. This company succeeds in operation in different markets since it has established a strong popular brand name through the sale of high-quality beverages and snacks. Starbucks’ stores are well-managed and are identical in all its regions of operation.
  3. Setting objectives: To address a problem as well as strategic issues determined during the environmental analysis effectively, setting objectives is very important. Although the objectives cannot define the procedures to achieve the anticipated results. Therefore, the objectives should be precise, measurable, singular and also time specific. Starbucks’ set objective is to be a reputable and popular brand worldwide  (NASDAQ_SBUX_2017.pdf, n.d.). Therefore, Starbucks looks forward to achieving this objective through the expansion of its specialty operations, increment of its retail operations as well as the introduction of new products and distribution avenues. Actually, the company has an extensive expansion program into new markets abroad by opening several coffee retail shops in South America, Canada, Asia, Australia, and Europe. Albeit Starbucks’ specialty is beverages, it has also expanded by selling music CDs in a number of its chain stores.
  4. Strategies development: At this stage Starbucks develops its strategies at a corporate, business and functional level. In essence, strategies are created after the information collected out of the situational analysis is reviewed. In this phase, the problems that face Starbucks are given a priority on the basis of relative significance. It is important to have contingency plans to make sure that the company progresses its operations regardless when unexpected situations emerge (NASDAQ_SBUX_2017.pdf, n.d.). The company attains its objectives by ensuring that it recruits employees who have a passion in the hospitality industry. Moreover, Starbucks also trains its employees so that they make sure that they provide its customers with an exceptional experience. It also trains its baristas to be dexterous in describing various sorts of coffee and custom-mixing drinks meeting the customer’s taste and preferences.
  5. Implementation and control: The final stage of Starbuck’s strategic planning process entails making sure that the company attains its set mission and goals. Starbucks can attain its goals if the support system in the company is adequate and effective. Actually, controlling the implementation process makes sure that the company attains its goals. Starbucks attains its business growth and expansion goals by means of strategic alliances as well as acquisitions of organizations like Teavana, Evolution Fresh amongst others  (NASDAQ_SBUX_2017.pdf, n.d.). The acquisitions have enabled Starbucks to achieve its expansion as well as product diversification strategies. Starbucks also makes sure that its clients, despite their geo-location, they always get a positive experience utilizing its products by training its employees to deliver high-quality services.

Ongoing strategy formulation and implementation

Starbucks board has amended its bylaws pertaining to its strategic leadership to encompass majority voting to include and let shareholders to play a significant role when electing directors. Currently, director nominees have to obtain more for votes as compared to against votes in order to be chosen in the unchallenged election (Starbucks, n.d.). Such changes demonstrate the company’s ongoing commitment to stronger strategic management.

Starbucks has strengthened its committee charter, director nominations policies encompassing the board membership criteria, governance principles and added the profiles of every board member in their corporate governance section. Starbucks has also created and implementing a Policy Governance Council for overseeing and approving governance tools at an international business level, and to make sure that they are properly described, reliable with one another, updated, kept for simple retrieval as well as efficiently conveyed to shareholders and partners (Starbucks, n.d.). In essence the council encompasses Starbucks’ leaders representing multiple businesses retails and also functions and obtains support from Starbucks Policy Office as well as its stakeholders such as the employee, shareholders, farmers, customers, environmental groups and activists, community members, suppliers amongst others (Starbucks, n.d.). Starbucks is struggling to engage these stakeholders in order to be able to have a better understanding of their concerns and needs so as to obtain their input on subjects regarding mutual significance.

Strategic leadership

Starbucks has a strategic leadership comprising the board of directors. Its board of governance has assumed the governance principles and committee charters in leading Starbuck practices. At the moment, it has nine directors, most of them have met the independence necessities of NASDAQ® and the United States Securities and Exchange Commission. This board is made up of culturally diverse board members and is chaired by CEO, Howard Schultz (Starbucks, n.d.). Moreover, it has 3 committees of the board comprising of independent directors having particular charters which include: Audit and compliance, compensation and management, development and nominating as well as corporate governance. Generally, Starbucks’ strategic leadership is strong since it is diversified based on the leader’s background, gender, culture, and education. Starbucks’ strategic leadership is shaped by the participation of shareholders and employees by providing recommendations as well as response via the Business Conduct Helpline as also the Audit landline (Starbucks, n.d.). Additionally, it is admissible to send written correspondence to the board, director or the board committee. Moreover, Starbucks has three levels of managers in all its retail shop. Every department has its own managers to strategically manage specific tasks.

Culture and ethics

Starbuck’s corporate culture is basically to think and act accordingly when in the corporation. The company employees various types of people from different backgrounds and train them at the course of the process; as a result, employees learn the working operations of the company including how to operate the machine and how to attend to customers which have been defined as Starbucks’ organizational culture (Hassan, n.d.). The most significant aspects of the company are high-quality services and coffee. Starbucks has made it a culture to produce best and high-quality products and services as well as absorbing less educated individuals and train them which makes Starbucks produce the best workforce own its own.

Starbucks’ economic ethics is supporting its mission, shielding the company’s reputation and the culture via the resources obtained from the partners that come up with an ethical decision which are helpful to the work processes (Starbucks, n.d.). Indeed, the optimum ethical reports obtained relating to issues of employee relations trend is consistent with other organizations and moreover, this is a substitute coverage as a compliance program. Starbucks observes high standards of ethics and equality and has a proper method of selecting new board affiliates, thus it is a vivid show of its integrity as well as ethics. Cultural diversity is embraced within the company as employs in this company are from the various cultural or ethnic background (Martínez-Torres et al., 2015). In fact, the board diversity is considered based on the members’ ethnicity, personal together with their professional backgrounds, race, gender or other distinguishing traits that enable more variety of opinions to be taken into consideration (Martínez-Torres et al., 2015). Such criteria of selection positively impact Starbucks promoting its success in the international market. Election of directors in Starbucks is done in an ethical manner since shareholders are allowed to participate in their election

Global trends

Starbucks of late has been taking many measures in driving growth as it thrives with the declining population and traffic of its customers. In its quarterly 2017 report, Starbucks announced that it intends to open its mobile ordering platform that could be used by all its customers through the organization’s digital umbrella and could eventually generate more traffic (NASDAQ_SBUX_2017.pdf, n.d.). Starbucks has also initiated a co-branded Visa credit card partnering with Chase, enabling customers to gain rewarding points based on transactions made.

The company has also focused on the improvement of industry dynamics. Initially, the general restaurant industry was quite impressive with comparable sales noting a slight increase in it.  As guest traffic has been decreasing, guest check sizes have significantly increased within fine dining as well as upscale casual restaurants. Starbucks as a top performing brand is more likely to perform better and benefit more from this current trend (NASDAQ_SBUX_2017.pdf, n.d.). Additionally, the Starbuck’s emphasis on food as well as expanding to China is probably to be a prime growth driver promoting its success. Therefore, it is likely that Starbucks will thrive even more. The growth of Starbucks is anticipated to exceed the current growth expectations.

Ever since Starbucks has also looked forward to the revolutionary drive-through model. However, it has ultimately determined means of bringing the inner brand experiences to the outdoor lane, conducting experiments on the digital authorization boards in the drive-thru via two-way live video communications which include a barista preparing beverage (NASDAQ_SBUX_2017.pdf, n.d.). The outcome of the drive-thru has been determined to be very intense as drive-thru stores were found to have gotten 50% more business (NASDAQ_SBUX_2017.pdf, n.d.). To add to it, Starbucks has authorized a historic large capital expenditure to add more drive-thru through in many locations in order to increase its net income.

Another global trend for Starbucks is its emphasis on diversifying and shifting into risk-taking areas through the rampant global expansion. The company has been flexible and expanded into all areas including areas that are dangerous to the company. Starbucks has expanded into China whereby it faces a dangerous rival from rivals such as Luckin Coffee, a rapidly developing coffee chain retail that is supported by big investors such as private equity firm Centurium Capital. However, Starbucks still has a lot of chain stores in China about 3500 and focuses on increasing them to 6,000 by 2022 (Starbucks, n.d.).

As a strategy to remain competitive, Starbucks has ventured on improving its customers’ experience by partnering with Uber Eats to offer delivery coffee services in the major city across the world in countries it operates in. Starbucks’ ultimate goal was to improve its customers’ service so as to retain the existing services and attract more customers given the tight competition they were getting from its competitor such as McDonald’s. In the United States, Starbuck has managed to adopt Uber Eats offering delivery services in more than 8,000 retail stores (NASDAQ_SBUX_2017.pdf, n.d.). In China, Starbucks has focused on working with Alibaba to offer delivery services in more than 2000 retail stores (NASDAQ_SBUX_2017.pdf, n.d.). Deliver services has transformed from a cab or car delivery to even motorcycle and bicycle delivery to improve service efficiency especially during rush hours with heavy traffic.


To sum it all, Starbucks is a popular and successful coffee retail company. The company has been dominating the coffee retail industry for a long time. It grew from a single small business until now it is operating internationally with several chain stores in various countries. This company is operating in a very competitive industry, as McDonald’s is its major competitor. To remain at the top of this competitive industry and as well continue to grow, Starbucks exploits the knowledge of strategic planning and management. The company has created an effective strategic planning model that has enabled it to have strategic management that has helped it to be successful despite the high competition it encounters. Moreover, the company has a strategic leadership which has enabled it to perform better which is evident by its global expansion rate. The organizational culture and ethics of this company too is excellent and encouraging good performance. And lastly, the company has made significant trends in order to increase its profits and also improve customer service.