Starbucks Ansoff Matrix

Starbucks Ansoff Matrix is a marketing planning model that helps the multinational chain of coffeehouses to develop its product and market strategy. Ansoff Matrix focuses on four different strategy options businesses can use.  These are market penetration, product development, market development and diversification.

Ansoff Growth Matrix

Starbucks uses all four growth strategies within the scope of Ansoff Matrix.

1. Market penetration. Market penetration refers to selling existing products to existing markets. Starbucks usually has the largest share in the majority of markets it operates. The world’s largest coffeehouse chain relies on its integrated marketing strategy to pursue market penetration strategy. Specifically, the Seattle-based coffee chain effectively positions itself as a third place away from work and home.

2. Product development. This strategy implies developing new products to sell to existing markets. The global coffeehouse chain pursues product development strategy aggressively. The company sells many variations of coffee, tea and other beverages and a variety of fresh food items, including snack under the brand names of Starbucks, Teavana, Seattle’s Best Coffee, Evolution Fresh, Ethos, Starbucks Reserve and Princi.

3. Market development. Market development strategy is associated with finding new markets for existing products. It is one of the main growth tools actively used by Starbucks Corporation. Started with only one coffee shop in Seattle’s 1912 Pike Place in 1971, the company has expended into 84 markets with 17133 company-operated stores and 16700 licensed stores as of October 3, 2021.[1]

4. Diversification. Diversification involves developing new products to sell to new markets and this is considered to be the riskiest strategy. The world’s largest coffeehouse chain engages in diversification sparingly. Rare occasions of diversification by Starbucks include selling CDs with own musical compilations.

Starbucks Corporation Report contains the above analysis of Starbucks Ansoff Matrix. The report illustrates the application of the major analytical strategic frameworks in business studies such as SWOT, PESTEL, Porter’s Five Forces, Value Chain analysis and McKinsey 7S Model on Starbucks. Moreover, the report contains analyses of Starbucks leadership, business strategy, organizational structure and organizational culture. The report also comprises discussions of Starbucks marketing strategy, ecosystem and addresses issues of corporate social responsibility.

[1] Fiscal 2021 Annual Report, Starbucks Corporation