Dominant business diversification strategy example
Please sign up to read full document. Sign Up Sign In. Only available on StudyMode. CoffeeStarbucksCoffeehouse Pages: For companies, they all want to example bigger market share and earn more profit. Diversification they will find many ways to penetration into the market like diversification. Diversification strategies are used to expand firms' operations example adding markets, products, services, or stages of production to the existing business. The dominant of diversification is to allow the company to enter lines of business that are different from current operations. There are diversification two broad forms of diversification as related diversification and unrelated diversification. Starbucks is the largest coffeehouse company in the world; they not only sell coffee and coffee beans also sell other drinks, salads, sandwiches and snacks. Besides they bought the Hear Music Company and develop other business except coffee. Related diversification, occurs business a company develops beyond its dominant product and market whilst remaining in the same area. For example, Starbucks Corporation buys roasts whole bean coffees dominant sells them along with example, specialty coffees, pastries and confections, and coffee-related accessories and equipment through company-operated retail stores. It also sells premium coffee beans through other channels of distribution, including coffee distributors, hotels, retailers, warehouse diversification, and restaurants; which are example called Specialty Operations. Starbucks example their coffee cup in their retail shops as well. Companies pursuing a strategy of unrelated diversification have no intention of transferring or leveraging competencies between business units or sharing resources. Starbucks bought example in Retail stores heavily advertised the film before its release and sold the DVD. Business would be able to browse the iTunes Store at starbucks via Wi-Fi in the US, targeted at iPhone, iPod touch and MacBook users. There are few efficiency-based reasons for diversification. With diversification, firms can easy to have more customers and more market shares. For business, starbucks use the best coffee beans diversification make coffee and produce the strategy cup of coffee so they can started in and keeps going today. With these different products so starbucks can successful so many years, in different countries and have different position customers. Besides drinks, business also service like strategy, sandwich, salad and other snacks. Firms Diversify also can get the economies of scale and scope. The company sells Starbucks-branded coffees and teas through arrangements with grocery stores as well as retailers such as Costco and Wal-Mart. The company's retail sales mix was roughly 61 percent coffee beverages, 15 percent whole-bean coffees, 16 percent food items, and 8 percent coffee-related Show More Please sign up to strategy full document. YOU MAY ALSO FIND THESE DOCUMENTS HELPFUL. They give back to the community while striving to have genuine service and an inviting atmosphere. We care deeply about all of this; our work is never done Starbucks, diversification 1. Analysis Starbucksinused economic analysis on elasticity in order to increase sales of their famous coffee drinks and use its reputation and premium brand drinks to take away sales from McDonalds which introduced a new line of lower priced espresso drinks business have proved example be popular. Starbucks has decided to increase the cost of some of their drinks like the Frappuccinos and caramel Macchiatos by an average of True example loyalty exists when customers have a high relative attitude toward strategy brand, which is then exhibited through repurchase behaviour. In this assignment for Principle Example the brand loyal that I chosen is Starbuck Coffee. Starbucks coffee is the premier roaster and retailer of specialty coffee in the world and has become a truly global brand. In basic concepts of marketing Starbucks Coffee can be consider as 'demands' rather than 'needs' and 'wants'. Starbucks product include fresh brewed coffee, strategy and iced espresso beverages, coffee and non coffee blended beverages, Tazo tea, baked pastries, sandwiches, and salads. The global consumer products include bottled Frappuccino, iced coffee, and espresso drinks, whole bean coffee, tea and premium ice cream. HISTORY OF THE STARBUCKS COFFEE 3. Inthe original Starbucks opened in Pike Place Market in Seattle, Washington by three partners named Jerry Baldwin, Zev Siegal, dominant Gordon Bowker. Their focus was to sell coffee beans and equipment. Example Diversification can be briefly defined as the expansion of a firm into a range example different product areas. Firms may choose to diversify for either of two reasons. Singapore Strategy SIA serves as a typical example of diversification in a certain degree as SIA dedicates to providing air transportation services of the highest quality and to maximizing returns for the benefit of its shareholders and employees via different ways of diversification since it was founded in Ways to Diversify As is mentioned above, firms generally diversify based on two reasons: If a merger is motivated by scale economies, the market share of the merged firm should increase immediately Or perhaps you want a Frappuccino, but don't want to find a parking spot for your Audi. Well, Starbucks has you covered. Business goal is to have 1, new locations that will include drive-thru windows. It's a big departure from the Starbucks concept that most of its customers currently experience, but the company's been seeing strong sales at the handful of stores that already offer drive-thru service. So its plan is to cash in on hurried drivers. Brews over Burgers Mickey D's introduced Mc-Cafe drinks five years ago, allowing diners to opt for lattes dominant iced caramel mocha brewed drinks to go with their Big Macs and fries. Other fast food chains have been following suit. Starbucks hasn't missed a beat, despite the burger flippers pushing into its bean business. Beyond a brief stretch early in the recent recession, comparable-store sales have remained largely positive at Starbucks. However, as rushed morning commuters grow accustomed to being able to grab a caramel hot chocolate or premium roast coffee without having to leave their cars, Starbucks knows it doesn't want to be left behind. The aromatic scents of freshly brewed java are so important that the chain scrapped several breakfast items a few years ago after they were making the place smell like -- well -- a McDonald's. Now Starbucks wants to take business page out of the Mickey Diversification Who are the target markets for starbucks? How do they differ from those of other coffee shops? Starbucks primarily targets coffee drinkers. These segments comprise of adults, young adults and Kids strategy Teens. Starbucks offers its customers a total brand experience which stretches beyond the consumption of the bevergae. The strategy includes excellent customer service, gold card loyalty program, diversification coffee drinks, unique drink names, its dedication towards social responsibility, elegant looking coffee shops. Other coffee shops such as Tim Hortons, Timothys World Coffee, and Second Cup do not offer extended brand experience as Starbucks. They mostly focus on business lower priced products and extensive distribution. Tim Hortons does not position itself as a hang out place or a meeting place but mostly targets people who are on the go. These coffee shops are mostly known for standard brewed coffee as dominant to Starbucks dominant for its premium quality specialty coffee. These customers tend to be living in large urban areas with relatively high income managerial careers who like to visit the coffee shop at diversification twice a day and sometimes more to conduct business meetings. Howard Schultz is the chairman and chief global strategist. They have a lean corporate structure that allows a lot of money to go to employee health benefits and future growth. The success of the company is directly related to its corporate structure. It is not clear from the case, however, I believe that Starbucks has a corporate structure that is clearly understood by everyone, they try to make all employees feel like they are part of the team. Their corporate structure is consistent with their current corporate objectives as well as strategies, policies and international operations which are run in a similar way. They run their international stores very similar to the ones they have in the US, keeping the no smoking policy and diversification. This might not be a good strategy strategy them because different cultures have different habits, it is dominant necessary that all Starbucks stores, regardless of location, are run in the same manner. Starbucks does have a well defined corporate culture. They spent very little money on advertising and believe that having the best coffee and customer loyalty are the keys to success. They treat their employees very well offering competitive wages and good benefit packages. The culture in the Time Frame Dominant Case Analysis falls within the events occurring from to ; Where Rapid expansion growth into the international and local markets affected the profit and continuous growth of Planet Starbucks. Point of View The Proponents would like to assume the point of view of Marketing Consultants in order to address the expansion diversification issues within the organization. Statement of the problem How to address the issues related to the rapid expansion and saturation of Planet Starbucks to the local and international market. The competition in the coffee industry has been intensified in recent years. Starbucks is providing people with strategy experiences instead of just a cup of coffee. This well established brand image of Starbucks has been playing an important role to business its position as a leader diversification the coffee industry. Therefore, in order to overcome the problems that Starbucks is facing, it should focus on enhancing its brand images by setting long term goals that make people believe that Starbucks is a nice and special company. Starbucks is facing two problems. Decreasing sales which are related to strategy economic recession is the first problem. Dominant be specific, due to economic depression in recent years, Starbucks has confronted decreasing sales that result in reduced net income and revenue in There are only limited ways to solve the first problem because the problem is related to macro-economic condition that Starbucks cannot control. The second problem is an intense competition in its markets. 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