Strategy Planning: Realistic Strategy and Development Plan

STRATEGY PLANNING 11
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Background
The global business strategy is necessary during expansion into new markets, since the businesses may be faced with new challenges. The economic situation, political climate as well as buyer behavior all influence trends and preferences. The success of any corporation requires thorough analysis of the local market needs and viability of the business strategies. Starbucks follows a global strategy selling premium products and differentiating while seeking to be recognized as global coffee chain. Organizations may choose to pursue a global standardization strategy, but the fail to take note of local responsiveness and this potentially affects the performance of global business operations (Peng, 2009).
Current strategy
Starbuck’s current strategy focuses on product differentiation and selling premium products with the broad range of cofeee, while combining superior customer service with a good reputation. This has made the company’s premium products hard to imitate, while the company has entered into strategic alliances with smaller companies in the new areas of operation to broaden the company’s appeal and reach to potential customers. Unlike the competitors, the company does not rely on franchising to grow in the international markets preferring, alliances joint ventures and acquisitions. The acquisition efforts have mostly focused on market extension, horizontal acquisition and product acquisition. Despite operating in diverse countries of Latin America, the company’ operations are mainly in the developed and upper middle income countries.
A realistic strategy
There is a need to undertake external analysis with the aim of informing decision makers on the most effective strategies. The acquisition and joint venture options have allowed Starbucks to enter new markets without facing many challenges related to cultural differences. Even though, the company has a good reputation and brad recognition, entry into the Panamanian market needs to take into account the factors affecting the beverage industry in the country as well as the economic performance. One of the major threats to the company is that the high prices are unaffordable to a section of the targeted middle-class in the new markets. Nonetheless, Starbuck’s innovativeness gives the company a competitive edge while expanding in new markets (Theodore, 2007)
Development plan
Starbucks has two major options to improve operations in Panama and Latin America through international franchising and introducing more innovative menus. Starbuck’s strategy of differentiation in the U.S. has been crucial to growth, and the same strategy ought to be applied but taking into account th...