Starbucks’s Stability Corporate Strategy

Among the three corporate strategies growth, stability and retrenchment, I have chosen stability for this assignment. As mentioned in the course material “Growth is not necessarily the best strategic alternative for every healthy organization.”

Starbucks aims at maintaining stability in the company. Starbucks is one of the leading companies in the coffee industry. It keeps bringing in the innovative products and keeps their products easily accessible to the people. The company continues to keep the quality of the product high while maintaining its position in the market. As per the InvestorPlace “Two years ago, SBUX stock was trading around $60 per share. Today, it trades around $54 per share.To put that lack of movement in context, the S&P 500 was trading around 2,050 two years ago. Today, the S&P 500 is at 2,570.” According to them the company isn't growing much and its stocks are almost at the same place in the past two years.

Starbucks has two strong competitors within coffee industry dunkin Donuts and McDonalds. According to forbes “Many companies have tried to copy and replicate Starbucks business model. Some tried to replicate the company’s espresso beverage menu -- like McDonald's with its McCafe product line. Others tried to copy its "third place" concept -- like Costa Cafe in London and Caffe Bene in New York City.” Even with growing competition Starbucks keeps its quality steady which instead helps it in having loyal customers. According to TheStreet “Over the last decade we have witnessed a number of companies in a variety of sectors place an increasing level of importance on creating customer loyalty in more creative ways. For a number of years I have followed one of my favorite companies, Starbucks ( SBUX - Get Report), with great attention.” They have Membership rewards. This loyalty rewards helps customers gain rewards on each of their purchases from any of there starbucks franchises. They give free drinks on there membership holder customers. Also after is a certain amount of time and when certain conditions are met loyal customers get green membership with which they can get free refills.

They offer Frappuccino Happy Hour which gives aways certain drinks on low prices to attract more customers. The company is getting positive results to happy hours. They aim at maintaining these results and eventually will make strategies on growing there sales using happy hours". The company attempts and makes strategies to maintain the current size and scope rather than planning on growing the company. Since the “growth can deteriorate the quality of product and customer service” as mentioned in the course material. The company does make strategies of growing but by increasing there sales and earning loyal customers rather than expansion.

Corporate level strategy is strategy top level formulates for the overall organization. Starbucks maintains sustainability in the company. Starbucks is creating a milestone in the industry by providing the best and unique service not in terms of its business but also in the matters that define the well being of the community or the society as a whole. The company's strengths are its unique product and positive brand image that helps in maintaining its loyal customers.