Strategic management Case Study Example | Topics and Well Written Essays - 1750 words

Strategic management - Case Study Example The Business System Model is responsible for the current level of strategic performance of the company. In order to sustain in the highly competitive retail market, Starbucks has undertaken a comprehensive strategy of integrating its business ethics, values and principles in the area of customer service in order to tap the potentially high market demand. The emotional engagement talks about a third factor introduced by the company called the Starbucks Experience. The customer gets engaged emotionally with the offerings of Starbucks and treats it as the third place to visit after their home and office (Fitzroy and Herbert, 2007, p.48). Starbucks have been able to set up their retails shops in identified locations in the urban areas which can reach the largest number of customers. Apart from this, the current strategies also involve diversification of business to the area of financial services. Findings: external and internal analysis The internal and external analysis of Starbucks has been conducted with the help of analysis of data (given in Appendix) on the strengths and weaknesses, opportunities and threats of the company which are internal and external characteristics respectively of the organization. The analysis of the strengths of the company reveals that Starbucks is the largest coffee chain spread all over the world. The company has strong financials and the valuation of the coffee segment is $4billion. Starbucks experience is an influential factor in the business that has driven internal performance of the company to new heights (Hutt and  Speh, 2012, p.29). The Starbucks products are slightly high priced and are aimed at tapping the customers who are willing to pay slightly more for the Starbucks experience. This leads to loss of customer base for Starbucks. The negative publicity of Starbucks is also an area of weakness for the company. Key strategic issues/findings The strategic issues in the business of Starbucks could be found with the help of i nformation of the business and the industry trends (given in the Appendix). The dip in the performance of stock from 2008 to 2009 reveals that inevitable gaps between the business of the company and the industry trends have developed. This has also been reflected in the slowdown of revenues earned from 2008 to 2009 and in the profits earned from 2008 to 2009 and 2009 to 2010. The strategic issues that have been identified in the business of Starbucks are inability to control the rapid expansion of its retail coffee outlets (Jenster, Hayes and  Smith, 2005, p.68). The image of Starbucks have got diluted which was built among the up market consumers over the years. The retail coffee outlets that are competing with each other intensely are also eating up their market shares. This has resulted in the of the Starbucks experience which has led to the decline of Starbucks performance. Evaluation of options The options to reduce the gap between the business performance and the changes dev eloping in the industry could be evaluated with an objective to reduce the gaps in the business per