Starbucks Strategic Management

Document Type:Case Study

Subject Area:Business

Document 1

An alternate approach to the firm's emphasis on specialty coffee to maintain its market is through franchising of the brand. This is a business arrangement through which the owner of a product, the franchiser, grants a second party, the franchisee, rights to use its trade-name for business purposes. A model that has been adopted by Starbuck's competitor, authorizing a smaller entity to sell one's product would grant the organization expansion into new markets while at the same time providing room for concentration on new strategies to further develop the brand. The downside of franchising, however, includes loss of control over each store and lower revenues for the parent company as a result of shared profits between many parties. A strong global presence as a strategy can also be useful.

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