Introduction (Starbucks, 2017). · the MyStarbucksidea.com website,
Introduction Innovation is the process of translating an idea or invention into a good or service that creates value for which customers will pay. Within business innovation results when a company more over looks to satisfy the needs and expectations of the consumers or customers (BusinessDictionary, 2017). When it comes to innovation within the Starbucks community it plays an important role within the corporate model that displays an array of products and services that has expanded overtime both domestically and globally.Strategic Innovation As a leader within the Retail Coffee industry, Starbucks currently makes up 60% of the business market (Geereddy, 2017).
This allows them to be at the forefront of innovation and changes as a commander in the industry, the current strategic strategy is place is focused on providing products that exceed the experience and standards of the consumers and also allows the door to be opened to new consumers. The objective is to make the products accessible to all store locations and then expand it to the online market after release. Starbucks CEO, Kevin Johnson stated during the Annual meeting of Shareholders that the company was focusing on three areas of innovation for the coming year. These areas are Innovation in Coffee, Elevated Food Options, and Innovation in Premium Craft Iced Teas.· Innovation in Coffee with the flagship store in Seattle as the center for this new program, Starbucks has stated with the introduction of the Cascara Latte, they would than go on to introduce customers to a nitro cold brew that is now available in over 570 stores globally.
The company continues to shine with the introduction of the first ever barrel-ages Starbucks Reserve Coffee that is already performing above projections. With future goals of opening 20-30 Roasteries globally. · Elevated Food Options: Mr. Johnson spoke on the plan to launch Starbucks Mercato a new lunch menu that features fresh and flavorful grab-and-go items that fit into a variety of dietary lifestyles.
This expansion of the food business is due to growth since 2013 which has seen a 1.5% increase with plans to double food business by 2021. · Innovation in Premium Craft Iced Teas: reinventing the craft iced tea with the introduction of Teavana shaken iced tea infusions.
(Starbucks, 2017).· the MyStarbucksidea.com website, which allows consumers to promote ideas or suggestions, request products that they would like to see back in stores and also improve on existing items Innovation Strategy Starbucks innovation plan is to continue to provide the high quality and valued products and services at a convenient and affordable price for the coffee consumers and not limiting the role that we as a corporation play in the environmental, sustainable growth of the coffee bean and products that we sell to consumers. In the next year Starbucks plans on introducing the sale of organic chicken and tomato soup within regional markets.
It will also debut the company’s first gluten free breakfast sandwich, this pipeline of new items will be a robust build that will expand the current offerings of the Starbucks lunch and breakfast offerings. Currently these sales account for 40% of all food sales, this has seen a doubling in the past four years (Kell, 2016). Starbucks is focused on the area of human society and that why they are ethical sourcing and maintaining and complying within every aspect of the business to the environment and its empowerment for future generations, if you look at the mission of the company “To inspire and nurture the human spirit- one person, one cup and one neighborhood at a time” (Starbucks, 2017). Innovation plays a role within this mission, it clearly outlines goals and future objectives for the business. The core values of a company must be highlighted within the innovation standards for growth, Starbucks core values currently are:§ Creating a culture of warmth and belonging, where everyone is welcome.§ Acting with courage, challenging the status quo.§ Being present, connecting with transparency, dignity and respect.§ Delivering our very best in all we do, holding ourselves accountable for results.
§ We are performance driven, through the lens of humanity (Starbucks, 2017).When looking to expand or change with new innovations a company must first ask itself some questions to increase the strategic management process within the organization. Below is a chart that helps to walk corporations through the steps of processing a goal and how to implement it to the general populous. COMPONENT DIAGNOSIS FORMULATION IMPLEMENTATION Basic question Where are we (org. in context of environment)? Where do we need/want to be? How do we get there? Output/product Set of critical issues (CIs) plus improved understanding of the organization& its environment Strategy-level recommendations to ensure success & address the critical issues Successful implementation of the strategies (an implementation plan, for this course) Process & elements * Identify & critique current mission, objectives, & (especially) strategies * Analyze data about external & internal environment to evaluate performance plus identify SWOT & CIs * External: competitive environment (5-force model) + societal environment (political/legal, technological, economic, and sociocultural) + stakeholders. Also social responsibility * Internal functional areas: financial; marketing; production/operations; technology; organizational – No set protocol or checklist. Do what is necessary to understand & develop CIs.
Analysis is a means to this end. – Consider both immediate and long-range problems – causes rather than symptoms. 1. Formulate rich range of alternatives2. Evaluate alternatives, including feasibility& effects on issues3. Select a set * Need clear recommendations with supporting justification* May revise mission, objectives, strategies* Three levels of strategy recommendations: corporate, competitive, and “other” – Recommendations should be: effective in solving problems, practical, feasible, cost-effective,& acceptable to key stakeholders – Is vital to ensure that all CIs have been addressed adequately * Plan is a set of basic action steps addressing: what, how, who, where, when & why – is necessary to make the strategy work. * Resources (financial, human, physical, technological)* Obtaining & maintaining support for changes* Reward systems* Timing (especially sequencing & constraints)* Organization structure* Tracking & control systems* Leadership, managing change – Those who implement & are affected by strategy changes are often different from those who formulate the changes (often producing the “NIH syndrome”) (Mitchell, 2009)Industry Competitors In the fight to be the Coffee king, Starbucks has entered the ring with corporations like Dunkin Donuts and McDonalds to better serve the customer base and try to draw consumers away from the other businesses.
The chart below details the current state of the coffee industry within the U.S and how each company fares within that market, Starbucks leads the pack but the competition continues to give chase. (Team, 2016) Dunkin Donuts: while Dunkin Donuts is the smaller of the three chain magnets it has co-existed with Starbucks for decades each focusing on the clients that they had and supported but in the late 1990’s Dunkin saw an opportunity to increase growth within its self and the coffee industry, they hope on this chance and slow have become a destination coffee shop rather than just a donut shop. Dunkin has prompted its self as the working man’s brand compare to Starbucks that has a wealthy and upscale consumer brand and feel, the marketing brand that ” America runs on Dunkin” was launched in 2006 (Hawley, 2015).McDonald’s: while the largest of the three corporations, McDonald’s restaurants has a global recognition that has been around for decades and is easily recognizable by all. It is only recently that McDonald’s has been seen as a destination for coffee, making itself a force to be taken serious (Hawley, 2015).
The newest competition to all of these mega-corporation is the growth of independent trendy coffee shops that are focused on the local communities that they are found in. these shops do not need to promote and market outside of the regional areas, allowing for sales to flow directly back to the area and consumers. Starbucks CFO Scott Maw states that ” what we have acknowledged … is the collective group of independent coffee shops out there, they are doing a lot of what Starbucks has been so good at for so long.
” Because of these shops Starbucks has invested heavily in the Roasteries and The Reserve brand and hope to open 20 to 30 Roasteries in tourist friendly locations throughout the global chain to combat the growth of independent chains (Taylor, 2017).Conclusion While the thoughts of innovation within a corporation is a good thing to help continue the growth of a corporation and its industry, the lack of innovation and the limited ability to catch up and reform a company can and will kill its longevity within an industry. Currently Starbucks has been an industry leader in the innovation of the coffee and products associated with coffee but the competitive market that was regional and local has expanded to a global and corporate market that has ever changing taste, flavors and appearance. To properly keep the advantage and brand name that has become the Starbucks name it must always be on the forefront on innovation and continue to expand into other avenues and areas that promote and distribute the name of the corporation on a grand scale.