Ch. 2 Strategic Planning for Competitive Advantage

Starbucks Coffee’s Intensive Strategies (Intensive Growth Strategies)

Market Penetration. Starbucks Coffee’s main intensive growth strategy is market penetration. This intensive strategy supports the firm’s growth by maximizing revenues from existing markets. Starbucks already has presence in 65 countries around the world. To maximize revenues and growth in these current markets, the company applies the market penetration intensive strategy by opening more company-owned stores. Starbucks also applies this intensive strategy for growth through licensing for merchandise and franchising in some countries, such as the Dominican Republic.

Market Development. Starbucks Coffee uses market development as its secondary intensive growth strategy. This intensive strategy supports the company’s growth by generating revenues in new markets or market segments. For example, Starbucks Coffee plans to enter more countries. These countries are mostly in Africa and the Middle East. In this intensive strategy, Starbucks grows by expanding its global reach.

Product Development. Starbucks Coffee also uses product development as a secondary intensive growth strategy. This intensive strategy involves creating new products to gain more revenues. Starbucks continues innovating its product mix. For example, after the firm acquired The Coffee Connection, it started offering Frappuccino at Starbucks cafés. The company also introduced sodas in 2014. Through such new products, Starbucks grows through this intensive strategy.