Schultz’s strategy is to keep Starbucks’ partners happy and passionate about their work through compensation, benefits, and company culture. A possible approach in these countries is to employ market development along with aggressive marketing campaigns to attain the customer base size needed to support business expansion within these local coffeehouse markets. The enterprise needs to innovate ahead of other coffeehouse firms to maintain its competitive advantage and growth based on this generic strategy. Based on Igor Ansoff’s matrix for market expansion, these strategies for intensive growth are directly related to the company’s generic strategy for competitive positioning in the coffeehouse market. ... a New York City–based firm that works with companies to devise content strategies and develop thought leadership for top management. In the simultaneous implementation of its intensive growth strategies, the coffeehouse company focuses more on expanding its international market presence, as well as in offering products of high quality and value. However, the cost leadership generic strategy might not work because being a best-cost provider goes against the premium brand image of the company’s cafés and merchandise. However does the generic strategy lead to sustainable competitive strategy?This analysis will explain in detail. For GDPR compliance, we do not use personally identifiable information to serve ads in the EU and the EEA. While competitors like McDonald’s and Dunkin’ compete through low cost, Starbucks emphasizes a warm and friendly ambiance that people enjoy. Merchant, H. (2014). As I discussed when writing about Porters 5 Forces, suppliers want to be able to supply Starbucks because of ethical rules and demand Starbucks adheres to. Configurations of governance structure, generic strategy, and firm size. (1997). Starbucks uses market development as its secondary strategy for intensive growth. Create a free website or blog at WordPress.com. Moreover, the business diversification intensive growth strategy can help increase actual growth potential through operations outside the coffeehouse industry. However, the company needs to overcome regulatory and sociocultural challenges in these coffee markets. For FY21, Starbucks reaffirmed its GAAP EPS range of $2.34 to $2.54 and non-GAAP EPS range of $2.70 to $2.90 (both inclusive of a $0.10 impact attributable to the 53 rd week). Competitive Advantage Through Information-Intensive Strategies. We use cookies for website functionality and to combat advertising fraud. As another secondary intensive growth strategy, product development contributes to Starbucks Corporation’s growth through new products or variants that add to business revenues. Risk of cost leadership strategy Too much focus on cost reduction may lower quality. For example, through product innovation, the company offers brewing equipment, as well as ready-to-drink products available at grocery stores. With its corporate strategic positioning to lead in the coffeehouse chain industry, Starbucks maintains its use of a generic strategy that involves specialty of products, and intensive growth strategies that emphasize current and new products in the company’s current markets. Intensive growth opportunities: An extended classification. They may include the pursuit of economies of scale, proprietary technology, preferential access to raw materials and other factors. A., & Wright, P. (1993). a) Cost Leadership Strategy This generic strategy calls for being the low cost producer in an industry for a given level of quality. See our Privacy Policy page to find out more about cookies or to switch them off. Also, Starbucks has intensive growth opportunities in countries where the company’s coffeehouses are not yet common, such as in Africa and the Middle East. (1) In FY22, Starbucks expects outsized annual non-GAAP EPS growth of at least 20%, inclusive of the negative impact of lapping a 53-week year. http://nicksbizblog.blogspot.com/2015/03/cost-leadership-at-starbucks.html, https://www.ukessays.com/essays/marketing/a-robust-cost-leadership-strategy-marketing-essay.php, https://www.cheshnotes.com/starbucks-generic-and-intensive-strategies/, https://kabrown9.wordpress.com/2013/02/21/chapter-6-cost-leadership/. Also, Starbucks could apply other generic competitive strategies together with its current one in order to maximize actual growth and competitiveness. Such, they can be classified as product differentiation brewing equipment, as well as ready-to-drink products at., W. R. ( 1982 ) its sustainable and finest ingredients leadership strategy enables a company to ahead! 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