Starbucks Corporation is the famous American coffeehouse chain and coffee company. The company was established in Seattle, Washington. The company is operating in over 30,000 locations across the globe. Starbucks is usually known for representing the “second wave coffee” also called as dark roasted coffee. However, Starbucks uses automated espresso machines for coffee making to increase efficiency and employees’ safety. The company believes in creating connections with its customers by providing best quality coffee in the town (Starbucks, 2020).
Starbucks promotes and grow its business across the globe. The different marketing tools can help the company with growth and marketing techniques. Ansoff matrix is the tool promoting growth strategies in combinations of products and market Starbucks is operating. The matrix helps the company in selecting the appropriate growth strategy for the future expansion of the company and revenue or market share growth. Here is the detailed Ansoff matrix analysis of Starbucks.
Market Penetration
Market penetration is the least risky growth strategy suggested by Ansoff Matrix. This encourages the company to increase the sales of their current products in the current market. Hence, this strategy helps the company in increasing the market share of the business and so the revenue. The company can adopt this strategy by different ways. Decreasing the prices or changing the pricing policies is one a way. The increase in promotion or marketing of the product is another way. Personal selling is also a way of penetrating deeply in the market. Starbucks is one of a famous coffeehouse chain across the globe. It can adopt this strategy by giving rewards and loyalty cards to its loyal consumers. Moreover, offering discounts on and off also helps the company in increasing sales. It has adopted the new strategy of writing the names of consumers on coffee cups to be more connected with consumers (Blatchford, 2013).
Product Development
Product Development is the growth strategy suggested by Ansoff matrix. Here the matrix encourages the company to expand it product portfolio by introducing new product for the current market. This strategy is also referred as product expansion. The company here can either introduce new product for the consumers or different versions of same product or relaunch a product. Starbucks had adopted this strategy by introducing Starbucks card and Starbucks VIA Ready brew for the consumers. It offered new and unique coffee flavors and combinations for consumers. Starbucks can promote its new product to create awareness among people or for promotion of the new flavors (Throwsdloh, 2020).
Market Development
Market development is another name of market expansion. Ansoff Matrix suggests the company to expand itself in new markets with the current products. This can be done geographically or demographically. Exploring the new markets or target new customer base helps the company in increasing the market share and sales of products. Starbucks is operating across the globe and continuously expanding itself in the new markets where it was not present before. Recently, it started its operation in Middle East regions like Kuwait, and Asian countries like China. Starbucks adopt this strategy as it earns great profit from every country it is operating (UK essay, 2018).
Diversification
Diversification is the growth strategy suggested by Ansoff matrix. This strategy suggests the company to introduce new product for the new markets. This is the riskier strategy among all, as company has to operate in completely new markets with new and different products. If the diversification strategy gets hit, it brings greater benefits in the company. Starbucks is a coffeehouse chain across the globe. It offers multiple flavours and different versions of coffee. The company can diversify itself into food industry. It can offer breakfast along with its coffee or lunch and dinner meals like McDonalds. Its expansion in the food industry will allow the company to tap in food market. This may help the company in increasing sales. The company will be able to shift its attention on food which is not snack compliment with coffee. Starbucks has the opportunity to grow its market share and sales in this industry (Blogspot, 2018).
References
Blatchford, J. 2013. Starbucks Ansoff matrix. [Online], Available at: https://manifestedmarketing.wordpress.com/tag/starbucks-ansoff-matrix/, [Accessed on: 4th February, 2020].
Blogspot, 2018. Starbucks Ansoff Matrix and Porter’s Generic Strategies. [Online], Available at: http://bigfatrevision.blogspot.com/2018/10/a-level-business-studies-starbucks.html, [Accessed on: 4th February, 2020].
Starbucks, 2020. About us. [Online], Available at: https://www.starbucks.com/about-us, [Accessed on: 4th February, 2020].
Throwsdloh, 2020. Ansoff Matrix. [Online], Available at: https://www.scribd.com/doc/50607040/Ansoff-Matrix, [Accessed on: 4th February, 2020].