Essay: Diversification Strategies of Starbucks
Once Starbuck has established the growth strategies, it needs to determine the diversification strategies. This will help the business in ensuring that the growth objectives are realized (Hitt, Ireland & Hoskisson, 2008). Vertical integration is a very good approach for Starbucks in reaching the growth strategy.
This is because Starbucks is in an industry which is potential and promising and thus by forward integration, Starbucks will enjoy the benefits of ext whenever it wants to leave the industry and controlling distribution costs and other costs. Horizontal growth is also important in corporate level strategy formulation as it involves introduction of Starbucks products to new markets, increasing the range of products offered to the existing forms or combining both of the strategies.
In related diversification strategy, Starbucks will be able to ensure that the existing business lines can gain by sharing the special advantages accruing from government access, distribution, location, customers and technologies (Weinstein, 2004). This is an internal move that is very good since it helps in developing other lines which are weak but promising such that they cannot be dropped.