Business-Level and Corporate-Level Strategies of Starbucks

free essayBusiness-level strategies and corporate-level strategies form a significant part in the development of every company striving to be an ultimate leader in the field of its performance. It is impossible to have a long-term success without sufficient planning of both business and corporate strategies. Multinational corporations have a pure reflection of their strategies on both levels of their performance. Starbucks is one of those companies that prove that it is highly recommended to have appropriate business and corporate strategies. This company is experienced and successful enough to make it clear that business and corporate strategies should be a reflection of the company’s long-term goals. Starbucks is successful enough to continue expanding its business all over the world, which makes it a valuable topic of interest.

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Business-Level Strategies of Starbucks

Target market and competitive advantage are the two forces that help to develop efficient strategies. Every company considers those two elements in order to create a compatible product or service. Business level strategies help the company to design a unique product, which will satisfy the needs of the target audience and meet its expectations. Starbucks is the company that has succeeded in the development of complex business strategies, which continue to transform along with the company’s growth of opportunities. Business-level strategies of Starbucks support the company’s position on the market and its competitiveness. Broad differentiation is the company’s business-level strategy, which helps it to create a diversity of products according to the changeable nature of the customer’s tastes and needs. Starbucks has an outstanding ability to accommodate to the conditions within the industry, in which it operates. These conditions help Starbucks to be attentive to the customer’s needs and create products, which would be affordable and enjoyable for every customer. The company’s strategy helps it to navigate through the diversity of tastes based on ethnic and cultural backgrounds, season of the year, traditions, and other aspects (Melvin, 2012). However, the strategy of broad differentiation helps Starbucks to understand the customer’s demands and satisfy them regardless of the customer’s age, gender or nationality. Moreover, a strategy of broad differentiation is a key element in satisfying the needs of customers, who do not like coffee at all. It means that Starbucks aims at meeting the demands of every client visiting the coffee store.

Starbucks is the company, which uses a combination of business-level strategies in order to accommodate to the terms of business environment. For example, a strategy of broad differentiation may need additional support of cost leadership, which can attract customer’s attention by creating a flexible pricing policy. Moreover, cost leadership helps Starbucks to save its financial resources, maintain the same level of quality, and provide customers with the company’s products at the most affordable price. Coffeehouse industry includes many companies, which strive to replace Starbucks, and this is what makes the company creative and wise in the competition. A combination of different business-level strategies prevents Starbucks from falling under the negative influence of the competitors.

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The main characteristic feature of Starbucks is the creation of a product, which will be valuable for its customers. Moreover, Starbucks never creates products that the customers would not be able to afford. From this perspective, it is possible to emphasize that broad differentiation strategy is the most important element in the company’s mixture of business-level strategies. It formulates the core of the company’s performance and sets its further transition to the next level of the activity. Specifically, a broad differentiation strategy has become the key to the company’s success.

Corporate-Level Strategies of Starbucks

Corporate-level strategies also occupy a significant place in the performance of Starbucks. Mergers, acquisitions, and effective human resource management represent the main corporate-level strategies, which help Starbucks to keep in balance with its strategic plans.  In addition, diversification and integration also play a significant role in shaping the company’s corporate-level strategies. Diversification is a strategy, which means that the company continuously creates new products in order to ensure its penetration into different markets. Starbucks has a myriad of products, which include coffee flavored ice cream, food items, coffee beverages, coffee beans and various kind of equipment for making hot drinks. The main rule of the diversification strategy lies in creating new products, which would meet the highest standards of quality and satisfy customers’ needs at the same time. Thanks to the diversification strategy, Starbucks has successfully enhanced its profitability, extended its competitive advantages, reduced threats from the business environment in the form of new competitors, maintained its reputation and image, and managed to extend the boundaries of its performance by adding new stores to its network (Hutt, 2016). In addition, the company continues to impress its customers with new products, taking care of its brand and reputation, which play a significant role in shaping the attitudes of customers, partners and suppliers.

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Integration is another part of the company’s corporate-level strategies, which continues to benefit the overall development of the multinational corporation (Strohhecker & Größler, 2012). The main step in the process of integration is a continuous increase of farms belonging to Starbucks. In this way, the company not only reduces the rate of unemployment, but also takes care of the quality of its resources. In addition, Starbucks continues to acquire other companies, which have a specialization in the fields related to the coffeehouse industry. In such a way, Starbucks started offering tea to its customers by acquiring small businesses specialized in the production of tea.

In the diversity of corporate-level strategies, diversification is the most important one. It enhances the company’s ability to navigate through the needs of its customers by offering new products to them. In case of Starbucks, diversification is an optimal choice, which can help it to explore the market even further and evaluate the customer’s ever-changing needs. In the continuous race for excellence and competitiveness, it is most likely that Starbucks will always find the best approach towards satisfying the needs of every customer. However, competition plays a significant role in shaping the company’s profitability and overall development.

The Competitive Environment

McDonald’s represents the main competitors of Starbucks, and has a significant influence on the decision-making process of the company. McDonald’s is another respected company in the world of business, which tries hard to meet its customers’ needs and provide them with high quality products. On the level of corporate strategies, the main difference between the two companies is that McDonald’s works in a single industry and does not try to enter new markets. It is interesting to mention that the company does not have as many acquisitions as Starbucks. However, it does not prevent it from developing. In the light of competition, McDonald’s remains one of the most respectable companies, which are proud to be absolute leaders in a single industry. Nevertheless, other corporate-level strategies of McDonald’s have the same direction.

Business-level strategies of McDonald’s have the same intention of supporting the company’s advertisement by means of its brand and image. For example, the company has been using its slogan “I’m loving it!” for years, which made it popular and noticeable. However, the most recent changes in the company’s performance indicate that the company needs to transform its approach towards advertising in order to refresh its competitiveness. McDonald’s has decided to add a research department, which would analyze the reaction of customers all over the world. The main criteria of the response are based on cultural and ethnic peculiarities, which allow gaining respect and attention among customers. The department is a unique part of the company’s business-level strategies, which helps McDonald’s to increase profits and apply a diversification strategy in order to satisfy the needs of its customers.

How It Works


McDonald’s and Starbucks are multinational corporations, which operate in a similar field. Both companies strive to excel their opportunities and provide their customers with the best choice in products and services. It is difficult to state, which company operates better in its field. The time will show whether Starbucks or McDonald’s will be capable to remain a leader on the global level.

Slow-Cycle and Fast-Cycle Markets

The nature of slow-cycle and fast-cycle markets continues to penetrate the performance of Starbucks, which obviously aims at having a balanced performance. The main aim of such intention is to avoid the negative influence of competition, which can mislead Starbucks on the way to success. The company is capable to perform successfully within both markets, which is evident from its ability to generate unique products and services. In this way, Starbucks creates an unrepeatable organizational behavior, which other companies cannot copy. It provides Starbucks with a guarantee of domination in slow-cycle and fast-cycle markets in future. Starbucks has everything to win loyalty of new customers in both markets by making products and services of outstanding quality. In the nearest future, it will be possible to see whether the company’s strategies are capable of bringing it to the new level of competition. In fact, Starbucks has all chances of becoming a single leader in the field of coffeehouse. Fast-cycle markets also can help Starbucks to reach its strategic goals by remaining in a single industry with a focused strategy. At the same time, the company’s ability to navigate through the diversity of resources can help it to provide customers with new options among its products and services. Starbucks will always continue exceling its opportunities in business. Active integration of the farming sector and creative approach towards the development of new products will help Starbucks to win a niche in fast-cycle markets. However, there is a need to provide the company with some recommendations, which will help it to increase its competitiveness. In general, the company needs to take care of its competitiveness and ability to influence its competitors by providing customers with such benefits as flexible prices, high quality products, and new services. In combination with the company’s differentiation strategy, it is possible for it to become a global leader in the coffeehouse industry, which can change the course of the development of other businesses.

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Conclusion

It is necessary to say that Starbucks has already become a legendary multinational corporation, which continues to grow and develop. There are many companies striving to copy the characteristics of the company’s performance in order to achieve the same level of success. However, Starbucks has a unique approach to every process involved in its performance, which prevents other companies from discovering all secrets of the company. Moreover, Starbucks managed to build business relations with suppliers and partners filled with trust and respect, which will ensure that the company’s reputation remains intact. In the future, Starbucks is most likely to become a single leader in the field of coffeehouse business due to its perfectionism. Starbucks values its partners’ and customer’s loyalty, which makes it an outstanding company. A combination of corporate-level and business-level strategies helps Starbucks to reach its goals and remain a respectable leader.