Abstract for: Application of Strategy Dynamics: Starbucks Corporation

Strategy Dynamics (Warren, 2008) provides a quantitative, resource-based approach to understanding a firm’s performance over time. This paper describes a strategy analysis of Starbucks Corporation using Strategy Dynamics. It demonstrates the usefulness of this approach in addressing business performance issues for a real-world company. The strategic architecture, a key artifact of the approach, is a model that captures the interactions of a firm’s tangible resources, management decisions, and external factors. Starbuck’s strategic architecture for its retail store business was developed using employee, store, and financial data from Starbuck’s annual reports and other public information. The strategic architecture and related models were used to explore several issues that can influence Starbuck’s strategy: customers with less discretionary income, expanding too fast, impact of staff layoffs on the quality of service, getting and maintaining loyal customers, and rivalry with competitors.