Starbucks: An Alex Poole Strategy

Study Questions

1. Can Starbucks expand beyond the coffee business in a meaningful way without destroying its core coffee retailing business?

2. Can Starbucks create value through its diversification strategy? Will management be able to create valuable, rare, and imperfectly imitiable economies of scope through its expansion into juice, tea, pastry, and new distribution channels or will the expansion be the downfall of Starbucks as it was in 2008?

3. Do competitors represent a significant threat to Starbucks competitive advantage through their additions of customized, higher quality coffees to their menus?

4. Should Alex Poole sell his Grandma’s Starbucks stock or keep it in her portfolio?
Sentences 1&2 – Your conclusion and/or recommendation for management (5 points)
Remaining Sentences of the PO – supporting course concepts (20 points) and analysis with evidence — persuasive qualitative or quantitative facts or interpretations of them (20 points) — that confirms your position and refers to the attached exhibits written essay style in a total 300 words. Analysis and overall effectiveness will account for 40 points of your score. Formatting is worth 5 points, and writing style accounts for 10 points of the assignment.
Exhibits – calculations, graphs, tables showing the use of course frameworks such as Porter’s Five Forces, VRIO, financial analysis (not included in word count)
The PO should present your main idea(s) about the case for discussion. In other words, give me what you think is important about the case. Do not summarize or review the events of the case. After you read the case, determine the central issue or issues management needs to address.
The PO should not contain:
§ a recitation of case events or facts;
§ bullet points or lists of any kind;
§ section headers;
§ passive voice;
§ unsupported assumptions and opinions from personal experience;
§ more than 300 words excluding exhibits, your name and other administrative details (course number etc…); or

§ a cover page