Starbucks Ecosystem – a brief overview
A company is not just a member of a single industry but it is a part of an ecosystem that crosses a wide range of industries. Despite the coffee chain being in the business for more than five decades, Starbucks ecosystem is still in the early stages of its development.
When a company has an advanced ecosystem its products and services are highly compatible with each other and customers will miss out on a wide range of benefits and functionalities if they want to break out of the ecosystem. Think Apple or Microsoft.
Starbucks has not been able to develop an effective business ecosystem until now partially due to the nature of products and services the company offers. In other words, the global coffeehouse chain offers limited range of products and services it has not been successful in creating compatibility and dependence between products and services.
Recognising the importance of having an ecosystem, Starbucks came up with the idea for digital ecosystem in 2020 as part of measures to deal with COVID-19 crisis. Specifically, Seattle-based international coffee chain is attempting to create digital third place, shifting its third place – a place away from home and work value offering to a digital environment.[1]
Development of an effective ecosystem comprises the following four stages – pioneering, expansion, authority, renewal or death. [2] These stages relate to Starbucks ecosystem in the following manner:
1. Pioneering stage. The initial stage is associated with the formation of ecosystem. Starbucks ecosystem at this early stage involves initiating global digital community – a community defined by collaboration, experiences, and shared ownership – all centred around Starbucks coffee.
2. Expansion stage. At this stage ecosystem extends to achieve maximum market coverage and critical mass. The world’s largest coffeehouse chain can extend its relevance to integrate art, music, books etc. to its digital and physical portfolio of products and services.
3. Authority stage. This is when an ecosystem matures. If implemented efficiently, Starbucks ecosystem will increase the customer base to a considerable extend with positive implications on the bottom line for the global coffeehouse chain.
4. Renewal or death stage. At this stage the ecosystem needs to be radically improved or reinvented to sustain the growth. This final stage can be triggered to a wide range of reasons such as changes in customer tastes and preferences and disruptive innovation in the industry.
Starbucks Corporation Report contains the above analysis of Starbucks ecosystem. 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, Ansoff Matrix 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 and addresses issues of corporate social responsibility.
[1] Brewer, B. (2022) “Starbucks: We’re creating the digital Third Place” Starbucks, Available at: https://stories.starbucks.com/stories/2022/starbucks-creating-the-digital-third-place/
[2] Moore, J.F. (1997) “The Death of Competition: Leadership and Strategy in the Age of Business Ecosystems” Harper Business