Starbucks Case Study
“The Boston Consulting Group (BCG) matrix is enhancing a multidivisional firm’s efforts to formulate strategies” and are including Question Marks, Star, Cash Cows and Dogs Starbucks is applying this matrix to identify the each stores strategic position.
In division Question Marks, shows low relatives market position but high growth industry. Firms cash needs are high and cash generation is low. This division decides to strengthen on pursuing an intensive strategy. Division Stars is the best long-run opportunities for growth and profitability. This stage is maintaining or strengthening their dominant positions. Next in are Cash Cows with control and manage for high relative market share position but compete in a low growth industry. Finally, in Dogs have low relative market share position and no market growth industry. This divisional are weak into internal and external position and often retrenchment, divestiture and liquidation. Retrenchment is the best strategy because can reduce cost and expenditures to become viable, profitable divisions.
Besides that, between the years 2003 to 2005 Starbucks Income Statements shows the net revenue were $4075,000 in year 2003, $2191,000 in year 2004 and year 2005 was $6369,000. Moreover, the sales growth rate between year 2004 and 2005 was 56.3%. This was HIGH position of industry sales growth rate and proved that in STAR division. This division represents the Starbucks have long-run opportunities for the growth and profitability. The divisions will be considering about forward, backward, and horizontal integration, market penetration, market development and product development.
PEST ANALYSIS
Political
Nowadays companies find it difficult to survive by relying solely on domestic market and try to find various businesses in various countries without boundaries. The basic need for globalization is to understand and learn different cultures of country which are including tax rates, law and legislation. Economic
In division Question Marks, shows low relatives market position but high growth industry. Firms cash needs are high and cash generation is low. This division decides to strengthen on pursuing an intensive strategy. Division Stars is the best long-run opportunities for growth and profitability. This stage is maintaining or strengthening their dominant positions. Next in are Cash Cows with control and manage for high relative market share position but compete in a low growth industry. Finally, in Dogs have low relative market share position and no market growth industry. This divisional are weak into internal and external position and often retrenchment, divestiture and liquidation. Retrenchment is the best strategy because can reduce cost and expenditures to become viable, profitable divisions.
Besides that, between the years 2003 to 2005 Starbucks Income Statements shows the net revenue were $4075,000 in year 2003, $2191,000 in year 2004 and year 2005 was $6369,000. Moreover, the sales growth rate between year 2004 and 2005 was 56.3%. This was HIGH position of industry sales growth rate and proved that in STAR division. This division represents the Starbucks have long-run opportunities for the growth and profitability. The divisions will be considering about forward, backward, and horizontal integration, market penetration, market development and product development.
PEST ANALYSIS
Political
Nowadays companies find it difficult to survive by relying solely on domestic market and try to find various businesses in various countries without boundaries. The basic need for globalization is to understand and learn different cultures of country which are including tax rates, law and legislation. Economic