Starbucks Strategy: Five Stages of Strategic Planning
This paper examines Starbucks Corporation through the five interrelated stages of strategic and organizational planning: vision/mission/values-setting, objective-setting, strategy crafting, strategy execution, and monitoring with corrective adjustment. Drawing on case study material and news analysis, the paper traces how Starbucks built its brand around quality and customer experience, pursued aggressive domestic and international expansion, adapted its offerings to local markets in Japan and China, and responded to competitive pressures from rivals such as McDonald's and Dunkin' Donuts. The paper also addresses the challenges Starbucks encountered during the 2008 recession and how it refined its global strategy accordingly.
- Vision, Mission, and Values: Starbucks' founding mission, quality focus, and customer experience values
- Setting Objectives: Expansion targets, hub-and-spoke growth, and recession setbacks
- Crafting a Strategy to Achieve the Objectives: International licensing, joint ventures, and China focus
- Executing the Chosen Strategy: Local adaptation in Japan and China while protecting brand identity
- Monitoring Developments and Corrective Adjustments: Quality auditing, barista reforms, and customer-satisfaction metrics
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What makes this paper effective
- It uses a clear, well-recognized strategic framework (the five stages of strategic planning) to organize the analysis, making it easy to follow and academically grounded.
- It supports each stage with specific, concrete examples — such as the company-wide store closure for retraining, the hub-and-spoke expansion model, and the introduction of black sesame green tea frappuccinos in China — rather than relying on vague generalizations.
- It acknowledges trade-offs and setbacks (store closures, job losses, lower international profitability) alongside successes, giving the analysis balance and credibility.
Key academic technique demonstrated
The paper demonstrates applied framework analysis: it takes a standard business strategy model and maps real company decisions onto each stage systematically. This technique shows the writer's ability to move beyond description and use theoretical structure to evaluate corporate behavior, a core skill in business and management courses.
Structure breakdown
The paper is organized around five named sections that mirror the five stages of strategic planning. Each section opens with a brief conceptual framing, then applies that stage directly to Starbucks using sourced evidence. The conclusion of each section transitions naturally into the next stage, maintaining logical flow throughout the argument. References follow APA-adjacent formatting with retrieved URLs included.
Vision, Mission, and Values
Starbucks' original mission was to bring a neighborhood coffeehouse to every location in the United States, in the style of Italian cafés. It emphasized quality to a greater degree than any existing coffee brand available to the general public at the time of its founding. There are lower-priced coffees and higher-quality coffees on the market, but Starbucks attempts to offer an affordable luxury and a home away from home to its patrons.
From the beginning, "Howard Schultz strongly believed that Starbucks' success was heavily dependent on customers having a very positive experience in its stores. This meant having store employees who were knowledgeable about the company's products, who paid attention to detail, who eagerly communicated the company's passion for coffee, and who had the skills and personality to deliver consistently pleasing customer service" (Thompson & Gamble, 1997, p. 2). When Starbucks felt that the coffee it was serving was suffering in quality, it shut down all of its stores for a single day to enable a massive, company-wide retraining effort.
Setting Objectives
Starbucks strove to super-saturate the market during its initial phases of expansion in order to whet the public's appetite for better coffee. "When Starbucks' store expansion targets proved easier to meet than Schultz had originally anticipated, he upped the numbers to keep challenging the organization" (Thompson & Gamble, 1997, p. 2). Starbucks adopted a hub-and-spoke expansion strategy in which it expanded into major urban markets, established a consumer base, and then spread into the suburbs. While some franchises preferred to limit expansion to avoid stores competing with one another, Starbucks did not — which is why Starbucks locations on opposite sides of the same street in New York City are so common — rationalizing that the personalization of individual stores would create distinct client bases.
In 2007, Starbucks set a goal of having 30,000 stores worldwide. "That dream died a year later and just over halfway there, with sales and profits sliding before other retailers really felt the recession. The Seattle company has since closed nearly 900 stores and eliminated more than 34,000 jobs" (Allison, 2010). It subsequently refined its strategy to focus more on under-served markets abroad, particularly in the Far East.
Crafting a Strategy to Achieve the Objectives
This emphasis on international expansion is currently focused on China. Starbucks is drawing on the lessons it learned from its expansion into Japan and other East Asian nations regarding differences between its original product and the varying tastes and preferences of consumers abroad. "In markets outside the continental United States (including Hawaii), Starbucks' strategy was to license a reputable and capable local company with retailing know-how in the target host country to develop and operate new Starbucks stores. In some cases, Starbucks was a joint venture partner in the stores outside the continental United States" (Thompson & Gamble, 1997, p. 3). Joint ventures enable Starbucks to better navigate the local regulatory environment and to understand different consumer taste preferences.
References
Allison, Melissa. (2010). Starbucks has a new growth strategy. Seattle Times. Retrieved from http://seattletimes.com/html/businesstechnology/2011861321_starbucksstrategy16.html
Jargon, Julie. (2009). Latest Starbucks buzz: Lean Japanese techniques. The Wall Street Journal. Retrieved from http://online.wsj.com/article/SB124933474023402611.html
Online extra: Q&A with Howard Schultz. (2002). Businessweek. Retrieved from http://www.businessweek.com/stories/2002-09-08/online-extra-q-and-a-with-starbucks-howard-schultz
Thompson, Arthur A., & Gamble, John E. (1997). Starbucks case study. McGraw Hill. Retrieved from http://www.mhhe.com/business/management/thompson/11e/case/starbucks.html
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