Case Detail

Case Summary

Starbucks: A Story of Growth

Case Number: 5-211-259, Year Published: 2011

HBS Number: KEL665

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Authors: Craig GarthwaiteMeghan BusseJennifer Brown; Greg Merkley

Key Concepts

Competition, Competitive Strategy, General Management, Growth Strategy, Strategic Positioning

Abstract

Founded in 1971 and acquired by CEO Howard Schultz in 1987, Starbucks was an American success story. In forty years it grew from a single-location coffee roaster in Seattle, Washington to a multibillion-dollar global enterprise that operated more than 17,000 retail coffee shops in fifty countries and sold coffee beans, instant coffee, tea, and ready-to-drink beverages in tens of thousands of grocery and mass merchandise stores. However, as Starbucks moved into new market contexts as part of its aggressive growth strategy, the assets and activities central to its competitive advantage in its retail coffee shops were altered or weakened, which made it more vulnerable to competitive threats from both higher and lower quality entrants. The company also had to make decisions on vertical integration related to its expansion into consumer packaged goods.

Learning Objectives

  • Understand how strategy needs to be adapted to new contexts
  • Understand how to manage tradeoffs involved in growth
  • Be able to identify possible threats to competitive advantage as a result of growth
  • Number of Pages: 20

    Extended Case Information

    Teaching Areas: Strategy

    Teaching Note Available: Yes

    Geographic: United States

    Industry: Coffee

    Organization Name: Starbucks

    Organization Department: Corporate

    Decision Maker Position: CEO

    Decision Maker Gender: Male

    Year of Case: 1981-2011