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strategy case study - 7.0 Strategies Starbucks has...

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7.0 StrategiesStarbucks has implemented strategies such as Market Penetration Strategy, MarketDevelopment Strategy, Product Development Strategy, Joint Venture Strategy,Concentric Growth Strategy, and Horizontal Integration Strategy.1.Ansoff MatrixMarket PenetrationStarbucks Coffee has adopted market penetration strategy to achieve intensive growth.This intensive strategy supports the firm’s growth by maximizing revenues fromexisting markets through opening more company-owned stores, licensing formerchandise and franchising in some countries, such as United States and SouthKorea. For example, Starbucks is aggressively expanding its coffee line in the UnitedStates, where it sees a potential $377 million market for flavoured coffee (case). As ofthe 3rdquarter of 2016, Starbucks has a total of 5186 stores in United States(Appendix 1). Since 1999, Starbucks opened first store in Beijing, China, itcontinuously penetrates the China market by expanding the Starbucks stores. In 2016,there are total of 2,382 stores in China (Appendix 2).Market DevelopmentStarbucks has adopted market development strategy to sell the existing products intonew market through the expansion to new geographical market. As of October 2,2016, Starbucks operated across 75 countries through four segments: Americas, whichis inclusive of the United States, Canada, and Latin America; China/Asia Pacific(CAP); Europe, Middle East, and Africa (EMEA), and Channel Development (FiscalAnnual Report 2015). During the third quarter of 2016, Starbucks continues themarket expansion by launched 474 new stores, including the first stores inAndorra and Slovakia (Kneoma 2016). Product DevelopmentStarbucks also has used product development as one of the growth strategy. Starbuckscreated new products to gain more revenues from the existing market. In 2009,Starbucks has launched VIA Ready Brew instant coffee product to the market(Starbucks 2009). According to Euromonitor International, VIA hit grocery and drugstores in May of 2010 and was already the fifth-best-selling instant coffee brand by
volume in the U.S. with 10.4% market share (Schultz 2011). Besides, in 2016Starbucks also innovated and launched some new products in specific areas such asNitro Cold Brew in China, Reserve Roastery from India across the U.S., andSnickerdoodle Hot Cocoa in U.S. (Appendix 3). DiversificationTea IndustryIn 2013, Starbucks made a major move toward diversification into the expansion ofthe specialty tea brand. Starbucks brought Teavana from a strictly retail space into thefoodservice world with the launch of the first Teavana tea bar in New York City(Starbucks 2016). In 2015, Teavana-branded handcrafted tea beverages generatednearly $1 billion in sales through Starbucks stores in the U.S while the tea category inStarbucks stores is growing double-digits across the U.S. and Canada store portfolio

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Term
Spring
Professor
Staff
Tags
Starbucks Coffee

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