There is only so much revenue that coffee, lattes, and pastries can bring in, so Starbucks performed SWOT and QSPM analyses and decided to spend millions on three new strategies: (1) provide beer and wine, (2) provide expanded lunch and dinner menus, and (3) provide advanced mobile ordering. Several key factors that entered into this decision were (1) there have been long wait times for customers to get served at many of its locations, (2) company business had fallen off 30 percent after morning breakfast, and (3) rivals Panera Bread, Atlanta Bread, and Dunkin Donuts were expanding their menus and growing revenue 15 percent faster than Starbucks. Starbucks’ five-year strategic plan is to double its U.S. food revenue to more than $4 billion, with wine and beer alone adding $1 billion in 2015. Starbucks’ new food items include truffle macaroni and cheese, Parmesan crusted chicken skewers, bacon-wrapped dates with balsamic glaze, artichoke and goat cheese flatbread, and chocolate espresso, champagne, and raspberry truffles. Starbucks’ new wines include a variety of sparkling, red, white, and rose choices. Starbucks’ new mobile app and coffee truck and delivery trucks help stores anticipate demand, so customer orders are often available immediately.
Source: David Fred, David Forest (2016), Strategic Management: A Competitive Advantage Approach, Concepts and Cases, Pearson (16th Edition).
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