Strategic Analysis Results and Change Recommendations for Performance Improvement – Starbucks
Executive Summary
In a recent strategic analysis of Starbucks’ business, I was able to identify some strengths and limitations to the company’s strategy. The general results of the analysis show that Starbucks is in a good position currently. However, to maintain the top position that it maintains in its industry, the company may want to explore some new strategies. The following is a summary of the strategic analysis results and some recommendations for the changes that the company can make to improve its performance.
Key Analytical Findings
The key findings of the analysis of Starbucks is that the company is in a good position. The SWOT analysis of the company revealed that it is still a leading global brand in the coffee house business. The company also has an extensive global supply chain that gives it access to the resources that it needs to maximize value. However, this position is threatened by the easily imitable business strategy used by the company. Starbucks’ competitors can easily imitate the types of products and services that the company creates for its target consumers.
Starbucks is also in a good position financially. The company has consistently been profitable for the past five years. Nonetheless, the company can do better when it comes to managing its debt. The company has a relatively high debt to asset ratio. This means that the managers need to make some strategic changes to improve the management of the company’s financial obligations to its creditors.
Corporate-Level Strategic Alternatives
Alternative strategies that Starbucks can explore to improve on the weaknesses in its current strategic standing include international expansion and investing in innovation. International expansion can help to further strengthen the Starbucks brand around the world. Stringer brand value means that the company will be earning more to improve its debt situation. Additionally, Starbucks can invest in a new innovation unit to help in the development of new ideas that can advance the performance of the company. New innovation can help the company to create new products that are harder for competitors to imitate. Therefore, the company will develop a differentiation competitive advantage.
The advantage of international expansion is that it provides new opportunities for the company to advance its brand and increase its revenues. However, this plan has the disadvantage of having too high a risk. The company’s success in the new markets is not guaranteed. Every market has different factors that influence business performance (Singh, 2010). These factors can be unique and unexpected for global companies that are joining a given market for the first time. However, the company can perform a comprehensive market analysis to reduce such risks from influencing the success of the expansion.
On the other hand, the innovation strategy has the advantage of further developing the Starbucks differentiation process. However, innovation can be time-consuming. It can be a long time before Starbucks realizes the fruits of the investments it has made in the research and innovation unit.
Best Alternative
The best alternative to pursue among the two is international expansion. This strategy has a clearer future since there is a lot of global market potential to be explored. This strategy allows the company to further develop its global brand. If Starbucks is to choose global expansion, it can gain more competitive advantage from its brand. The more recognizable the brand is around the world, the more people will want to be associated with it.
Funding Suggestions
Funding an expansion strategy can be very hard. Therefore, the company needs to find resources to fund the expansion. The company should use only a portion of its personal capital and then borrow the remaining funding from financial institutions. Funding from personal capital has the advantage of cost-effectiveness because there are no interest payments that will be needed (Freeman, 2010). However, the company cannot exhaust all its capital for a single strategy. Therefore, they should borrow from financial institutions. Borrowing helps to provide the funds needed, and then the patient will be made later.
How Starbucks Can Promote Its Culture, Mission, and Vision
Starbucks needs to develop company values that align with its culture, mission, and vision. One way of doing this is by training its employees to make sure that they understand the appropriate leadership and followership qualities that will align the organization’s culture with its mission and vision. The company can also use servant leadership to exemplify the tenets of the Christian Worldview. Christians believe in servant leadership, which entails leading by example. Jesus was divine, but still, he preached and served his people (Spears, 2010). Similarly, leaders can develop their servanthood by developing leadership initiatives that include the education of the employees on the right values and behaviors to help them succeed.
References
Freeman, R. E. (2010). Strategic management: A stakeholder approach. Cambridge University Press.
Singh, D. (2010). Managing cross-cultural diversity: issues and challenges in global organizations. IOSR Journal of Mechanical and Civil Engineering, 43-50.
Spears, L. C. (2010). Character and servant leadership: Ten characteristics of effective, caring leaders. The Journal of Virtues & Leadership, 1(1), 25-30.
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Question 
The purpose of this assignment is to summarize two strategic alternatives for your selected corporation based on individual research and team analyses.
Strategic Analysis Results and Change Recommendations
Assume that you work as an analyst team lead at the company you have been studying throughout this course, and you are issuing a high-level communication to the company CEO that summarizes your analysis. Based on what you have discovered regarding environmental scan issues, financial analysis issues, industry trends, etc., communicate a plan for implementing two strategic alternatives in an executive summary of 750-1,000 words.
Include the following in your response:
Based on your work this semester, synthesize and present key analytical findings about where the company is excelling and how or where it can improve. Refer to both your CLC and individual analysis in your summary.
Propose two creative yet viable corporate-level strategic alternatives. Critique the pros and cons of each alternative utilizing your analytical findings.
Select and defend the pursuit of one of your two viable alternatives. How does this alternative align with the firm’s mission, vision, and values? How can management employ this alternative to create a competitive advantage for the firm? Suggest next steps.
Based on your analysis, identify a business unit or activity within the corporation that you would suggest defunding in order to finance your strategic alternative or provide an alternate funding source. Defend your selection.
Given your overall proposal, how do you suggest the company promote its culture, vision, and mission to maximize its chances for success in the industry? How might the company develop its servant leaders to endorse and exemplify tenets of the Christian worldview (CWV) in the workplace? Propose and defend at least one significant leadership initiative.
Prepare this assignment according to the guidelines found in the APA Style Guide, located in the Student Success Center. An abstract is not required.
This assignment uses a rubric. Please review the rubric prior to beginning the assignment to become familiar with the expectations for successful completion.
You are required to submit this assignment to LopesWrite. Refer to the LopesWrite Technical Support articles for assistance.
Benchmark Information
This benchmark assignment assesses the following programmatic competencies:
BS Business Analytics; BS Business Management; BS Finance
3.3 Examine the role of leadership in creating competitive advantage through aligning strategy with an organization’s mission, vision, and values.
4.3 Determine how servant leaders develop leadership capacity in others and a shared value of service within an organization.