Essay MGMT3015: Corporate Strategy – Starbucks – Management Assignment Help

Assignment Task:

QUESTION 1:

Starbucks are a great example of best practices in the strategic management of ethics, corporate social responsibility and creating shared value.     

Argue for or against this statement (above) based on an analysis of the case and specific and detailed applications of at least one appropriate strategic management model, concept or framework.

Even though the corporate social responsibility (CSR) strategy of Starbucks might have changed with time, but the core beliefs at Starbucks is to find a balance between profitability and social morality. Starbucks has always been a great example of best practices in the strategic management of ethics, corporate social responsibility and creating shared value due to it continues contribution to its community, following an environmentally sustainable business practices and earning the trust and respect of customers, shareholders, government and public. 

The five key CSR strategies of Starbucks are sourcing products ethically, giving back to the community, environmental sustainability, support local farmers and charitable contribution has helped the company to achieve its high-end coffee and a key factor of its product differentiation strategy. 

The five component of a corporate social responsibility strategy

1. Actions to ensure that the company operates honorably and ethically

• Provides loan to small family farmers to support them and improve their standards of living. 
• Supply products from suppliers who follow the company’s global suppliers code of conduct. 

2. Actions to support philanthropy, community service, and better quality of life worldwide

• Regularly volunteers in community services and also formed a strategic alliance with Feeding America. 
• Donation to organizations that feed needy and homeless people

3. Actions to sustain and protect the environment

• Initiating to build LEED certified stores
• Focusing on recycling, reducing waste, being energy efficient, more use of renewable resources, reduce water consumption. 
• All the stores are build using environmentally friendly materials and using recycled and reused product in stores such as reusable cups, recycling cardboard boxes and bins

4. Actions to enhance employee well-being and make the company a great place to work

• It provides a great working environment to employees where they are treated with respect and dignity
• Competitive pay and attractive compensation 
• It offers different programs and services to employees such as Health care coverage to both part time and full-time employees, stock option plan, training which helps employees to stay motivated in the workplace and a motivated employee provides a great customer service. 
• Build a company that valued and respected its people, that inspired them and established a mutual respect between employees and management

5. Actions to promote workforce diversity

• There isn’t any workforce discrimination as there is a diversity in the hiring process as young people aged 16-24, veterans and military spouses, refugees and people with quality skills are hired regardless of their age, sex, nationality and race.  
• Starbucks vice president said, “we are looking for a diverse workforce, which reflects our community”. 

All these ethical and CSR activities and steps taken by the Starbucks has positively impacted the company as it attracts customers that share same values. Furthermore, it has also created a positive brand image and reputation which has directly increased the sales of the company following customer loyalty. Therefore, all these positive effects on company shows that the strategic management of ethics, corporate social responsibility and creating shared value is the great example of best practices. 

He aspired for Starbucks to become the most respected brand name in coffee and for the company to be admired for its corporate responsibility. 

QUESTION 2:

Starbucks’ growth can be best understood by recognising how the company has strategically driven value through diversification and moving into adjacencies.     

Argue for or against this statement (above) based on an analysis of the case and specific and detailed applications of at least one appropriate strategic management model, concept or framework.  

• I agree with the statement that Starbucks’ growth can be best understood by recognising how the company has strategically driven value through diversification and moving into adjacencies. Its approach to introduce new product offerings in their menu is a narrow diversification strategy because the company is offering number of new products that is associated to each other and helped tap onto the market for beverages and fast food meals. 
• Starbucks which originally started as a purveyor of fine coffee, started a long term strategic planning to diversify the product offerings and sell products in wider distribution channels and market segments in order to establish strong brand awareness and capture larger market share which will generate a solid foundation for long term growth. The main product of Starbucks is coffee with addition to that Starbucks started entering into joint venture with different companies in order to create a large variety of new products such as bottled drinks, coffee ice-cream, iced tea, and bottled water.  It also started offering healthier and low-calorie products such as wraps and sandwiches, pastries, bakery. Furthermore, also started offering wines, beer and other complementary food items in the menu which broader the menu offerings and becomes an attractive destination for larger customer base. Starbucks has strategically bundled complementary goods which has helped Starbucks enhanced their revenue because of their respected brand image in coffee items and successfully sold other food items sold by Starbucks. 
• Diversification of one of the four growth strategies of Ansoff (growth vector) matrix, which shows how Starbucks can increase its sales by introducing new product in the new market. Ansoff matrix shows four ways by which the company can grow its business via new or existing product or new or existing market. 

PART B: These questions do not relate to the case study. 

QUESTION 3:

The only effective ways for an organisation to gain a competitive advantage is either through cost leadership or differentiation – there are really no other effective ways to strengthen the company’s competitive position.

Argue for or against this proposition using specific and detailed applications of an appropriate strategic management model, concept or framework from the course and support your arguments by using illustrative examples of organisations that you know from your own experience or observation.

According to the Porters Generic Strategy model, there are three major factors that help companies create a competitive advantage among their competitors such as cost leadership, differentiation and focus. 

Even though there is a third factor FOCUS, it has a smaller effect compared to other two factors are applied by companies in broad level and further focus is used in narrow and broad target market. Therefore, I agree with the statements that according to the Porters Generic Strategy model, the only effective ways for an organisation to gain a competitive advantage is either through cost leadership or differentiation. 

QUESTION 4:

The most successful strategy for competing globally is adopting a single global approach (online or offline).  Everything less than a global strategy is really missing out on value creation.

Argue for or against this proposition using specific and detailed applications of an appropriate strategic management model, concept or framework from the course and support your arguments by using illustrative examples of organisations that you know from your own experience or observation.