Most restaurants use the franchise model as a method of expansion, however, Starbucks operates on a different business model. Starbucks’ expansion strategy is not based on the franchise model as it believes that by operating company-owned stores, it maintains the company culture and achieves greater control of operations.
Goh indicates that organizational culture helps to improve brand image and award an identity. A franchise-based model ensures less control of daily operations and thus, Starbucks prefers to maintain control of its stores. It ensures that its baristas understand the company’s vision, culture, and value statement.
Starbucks is a successful company in the fast-food industry not because it revolutionizes the trend, but due to the strategies deployed. The company has a constant need for innovation making it unique among competitors. It makes incremental improvements to existing brands while placing investments in significant innovations and breakthroughs. It emphasizes diversification as a strategy to unlock growth opportunities.
In 2014, the company launched a program dubbed Starbucks Evenings, an initiative that saw it introduce the selling of alcoholic beverages in its company stores. Starbuck’s global competitors have diversified their products and as a result, Starbucks is looking into ways to establish a foothold in emerging markets such as China by introducing products that resonate with its consumers.
Consistency in brand experience is a strategy that has enabled it to edge companies that operate a franchise model. The company can recreate a similar brand experience in all its restaurants globally. Starbucks’ expansion strategy has focused on several issues such as the adoption of an innovation mindset, investment in new technology, and new concept stores. To remain a global leader, Starbucks has continued to ensure that it meets consumer preferences while maintaining a good brand experience.
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