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 realworld 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 report; 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.