When Strategic planning came into existence in the 1960’s, several business planning leaders said that its one of the best way to be successful in the market but at the same time, many authors and researchers have talked and argued about strategic planning. For example (Armstrong, 1982)argued that strategic planning is totally a clear and precise process rather than just the assumptions of collecting the data to create an organization where the work flows in a smooth manner. Likewise, (Ansoff, 1991)argued that planning of the work obviously gives better results and alignment of the work than the trial-error method. However, many researchers have also criticized strategic planning and said that the strategic planning is irrelevant and is of no use. For example, Mintzberg criticized that the organizations should face the uncertainty, therefore it’s very risky but he summarized his criticism in a very smart way, which was; putting oneself on a preplanned work and on a unknown path leads to a perfect way in hooking in the iceberg.
According to Frederick Taylor, the best way in the management of science involved the separation of thinking from actually doing. Many people see strategic planning as strategic thinking but it isn’t like this. Strategic planning is of two ways, analysis is the first one and then synthesis comes as the second one. Thus, when the companies understand the real meaning of strategic planning they can capture anything and reach to the top.
Brief about the Company:
It all started in the year 1971 when three people who were crazy about coffee started to run a small coffee shop in Seattle. The specialty of the shop was that it used to sell the best coffee beans I.e. Arabica to a very small-targeted market. After almost 11 years, Howard Schultz entered the marketing team of the Starbucks Company and after a span of time; he went to Italy, there he saw and got inspired by the coffee culture of Milan. After he came back to Seattle, he convinced the company to install an espresso bar. Schultz really wanted to take the coffee culture ahead and thus, he wanted to buy the Starbucks Company to fulfill his dream. (Moon & Quelch, 2006)After some years, he got lucky when the owners of the company decided to sell him the whole company. In the start, Schultz idea was to make a big famous chain of coffee places that would be the third place, where Americans would like to go after their house and work. The motive was to give people a third place after their work and home where people can go and have fun, sit and relax peacefully. (ROLL, 2017)
Global Expansion: Expansion Strategy
Immediately, after buying the company, Schultz started opening new stores at different-different locations. In the year 1992, there were almost 140 stores opened in Chicago & Northwest was also giving full competition to the other coffee chains.
In the very same year, He wanted to take the company outside the United States so he raised the funds, which allowed him to open Starbucks across the nation.
By the year 2002, Starbucks had become the coffee king and was dominating the coffee culture in the North America. (ROLL, 2017)
After the company went fully public, Starbucks growth has always been rapid and strategic. The first international store was opened in Tokyo in 1996 after two years they entered the United Kingdom market in 1998. In 2002, Starbucks opened their first Latin-America store in the Capital of Mexico. As the company was growing so fast; in 2007, they entered Russia and opened their its first store. Because of their demand and rapid growth, the company has spread their stored across 75 countries and have more than 26,000 stores till now and is expected to grow more in the year 2018. Moving into Canada and Chicago was the major reason behind the expansion of Starbucks at such a fast rate at that time. (Schultz, 1997)
On April 3rd, 2017, Howard Schultz who was the former CEO of Starbucks was changed and Kevin Johnson became the new one. Johnson was already in the list of board of directors since 2009.
Value Proposition- Reason for the Starbucks success in 1990’s
Starbucks mantra, which is the live coffee, indicates about the company’s best practices the keep the coffee culture very much alive. Starbucks strategy of branding has three components. Coffee itself is the first component as Starbucks is very much proud to sell the most superior quality of coffee which comes from different regions of the world. Since the start, Starbucks was really serious about the standard of their coffee so to keep the standard it they started to join hands with the farmers and cultivators and then they worked together.
Service comes as the second component; the Starbucks Company also refers it as the customer intimacy. The main motive of them is to make sure that their customers go more than satisfied when they leave the store.
Atmosphere comes as the third component: When it comes to the atmosphere, their main idea was to make the ambience or the surrounding as such that it makes the people stay for long. (Moon & Quelch, 2006)
Value Proposition of Starbucks is so fascinating because it puts the customer before its delivery of service, for them the most important factor is the customer’s experience and satisfaction. Even though in the end it’s a coffee story they more emphasis on the coffee culture and to take this culture far ahead.
The company’s brand strategy has been advanced and has also taken full advantage of the latest customer engagement trends in the market. They have made a website domain where their customers can post their anything related to their service which would help them to improve their company and the experience of the customer as well.