Introduction
Starbucks is an American based coffee selling company with its offices in Seattle. It is the largest coffee selling company with branches across the world. The company’s original mission was to ensure that the company grew into a firm that provided ample benefits to its employees deliver personal services to its customers by establishing personal customers while at the same time expanding on its corporate social responsibilities.
It started in 1971 as a coffee roaster. At that time, large supermarket chains such as Folgers and Maxwell house dominated the coffee market. The company was able to expand with time and as a result, the company’s revenues grew from around ten million US dollars in 1988 to around nine billion US dollars in 2007. This good performance was reflected in the price of the company’s stock. After its Initial Public Offer (IPO) in 1992, the company’s shares grew from around two US dollars in 1995 to around thirty US dollars in 2005. The company’s shares began a downward trend with them falling to less than nineteen US dollars in 2008. This crisis was largely due to a conflict between the company’s original mission and its expansionist growth policies.
In order to grow the company while maintaining its core values, the company should identify some other line of business activity such as sale of other beverages apart from coffee that expand its business activities along its value chain. The company could also venture out of its ordinary form of business activity and develop new products and services to expand on its client base. This ensures that even during economic hardships such as a global financial crisis, the firm is able earn sufficient revenue to run its business activities while at the same time paying out dividend to its shareholders. (Piedad 70)
This also ensures that the company has enough funds to support its corporate social responsibilities such as its mission to support people and places that grow coffee and other charitable activities. This venture into a new line of business should however not compromise the company’s core business. The company should ensure that the new ventures are reduced to a minimal number and such that it pursues only one move at a time. This ensures that The Company invests only in that activity that it has conducted sufficient market study on to determine the potential customers.
The company could expand into new geographical areas with a view to capturing those potential areas not covered by the current establishments. This should be done after a careful market study to determine the tastes and preferences of the potential markets. This ensures that the company only launches those products, which have ready market, and that it does not incur losses. While doing this the company should ensure that all establishments preserve the environment in order to ensure that its mission of conserving nature is preserved.
The company should conduct market study to determine the different gaps in consumption. This enables the company divide the market into different segments in order to adopt relevant pricing strategies and mechanisms. This also facilitates production of those commodities that suit and reflect the different tastes of consumers thus ensuring their satisfaction hence increasing sales.
According to Dringoli, the company could also use new coffee distribution channels to help increase its customer base while at the same time ensuring that the existing ones are maintained. This ensures that even with its expansion activities the company is able to ensure that its goal of delivering services of a personal nature are achieved and preserved. In addition, with the increased revenue, the company is able to maintain good remuneration of its employees thus its original goals and missions are preserved.
WORKS CITED
Top of Form
Growth Strategies That Work - Again and Again. Boston, MA: Harvard Business School Pub,
2003. Bottom of Form
Top of Form
Dringoli, Angelo. Corporate Strategy and Firm Growth: Creating Value for Shareholders.
Cheltenham: Edward Elgar, 2011.
Bottom of Form
Top of Form
Growth Strategy Insights. S.l.: Harvard Business School Pub, 2003. Bottom of Form
Piedade, Lucy D. A., and Adele Thomas. "The Case for Corporate Responsibility: An
Exploratory Study." SA Journal of Human Resource Management. 4.2 : 65-74., 2006
