1. What Corporate Strategies assist maintain the company’s superior performance?

Stability Strategy

When a company finds that it should continue in the existing business and is doing reasonably well in
that business but no scope for significant growth, the stability is the strategy to be adopted.

Stability strategy is pursued when firm wish to continue serving its customers in the same product line
or service, market, and function sectors as defined in its business definition, or in very similar sectors.

Growth/Expansion strategy; this strategy involves redefining the business either by adding to the scope
of its activity or by substantially increasing the efforts of the present business. This is evident by the
increased numbers of stores from operating as a single store thirty years ago, to the present 12000 and
more retail stores available within 40 states.

Retrenchment strategy involves a partial or total withdrawal either from products, markets or functions
in one or more of a firm’s businesses. Retrenchment strategy is generally followed during the period of
decline of a business.

Combination Strategy: When an organization adopts a mix of stability, expansion and retrenchment
either simultaneously or sequentially for the purpose of improving its performance.

Merger Strategy: Economic implications of mergers and acquisitions have long been an interest to
economics. A Merger by definition combines two firms leaving one surviving firm.

Restructuring approach usually entails buying the firm, selling its corporate headquarters and
terminating corporate staff members.

2. What functional strategies led to the company’s superior performance?

Marketing strategy; This is a comprehensive plan for achieving a company's goals by understanding the
needs of customer’s needs, providing for them and maintaining the market base. It aims at attracting
and retaining the prospective buyers of the product. This is evident by the Schultz’s approach that
clarified the need for individuals to get personal time out, interact with friend and also attend family
gatherings. As a result, Schultz’s model led to the selling of the firm’s premium roasted coffee in addition
to freshly brewed expresso-style coffe beverages, numerous pastries, coffee accessories, tea and some
other products.
Research and Development strategy; this is evident by the advanced knowledge gained by the CEO of
the company, Howald Schultz. The present course of Starbucks Company was set out the company’s
marketing director, currently the CEO, arrived from an Italy trip enchanted with the Italian coffee house
experience and ultimately advised the firm managers to experiment the coffeehouse format.

The Starbucks executives also developed employee hiring and training programs which were considered
the best in the restaurant industry. This was aimed at providing superior customer service.

Financial strategy

Starbucks provided employees with progressive compensation policies that gave even the part time
employees stock options grants and medical benefits. This is an effective approach that ensures
employees’ wages are minimum and no more benefits are awarded to them.