CLC-Steps Required for Financial Recommendations

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CLC - Space, Grand and QSP Matrix Comment by Daniel Smith: Team - well done. Your write-up was somewhat clearly written and thorough. However, be sure to explain your conclusions somewhat more. I hope that my feedback is helpful for you. Dr. Smith

Jose Alonso, Tamberlyn Crayton, Dinaja Dowdy, Pauline Morgan, and Brad Overson

Colangelo College of Business, Grand Canyon University

MGT 660: Strategic Management

May 26, 2021

SPACE Matrix

Looking at the strategic position and action evaluation comparing Starbucks, Dunkin, and McDonald’s, we see that Starbucks is more aggressive than its competitors. This is really evident when looking at the current ratios. Comment by Daniel Smith: Why/how? Explain somewhat more.

. We have seen a drastic increase in its debt as well as its assets (Starbucks, 2021). This growth has proven to be a strong point and puts Starbucks in a great position to move forward. The rRecommendations that I would take is a second look into our new products. They are currently strong, however other competitors are on their tails. First, the company can work on being more creative with its products. This would give Starbucks that a needed boost to gain a greater lead on the competition and secure a greater portion of the market share. This could be accomplished by appealing to new customers and returning customers, as well as the youth that are entering the coffee consumer market. An additional recommendation is to work on internal inefficiency within the company, to reduce cost and make current processes more efficient (David et al., 2020). Comment by Daniel Smith: Over what period of time? Comment by Daniel Smith: Why? Explain somewhat more. Comment by Daniel Smith: Be sure to explain your conclusions somewhat more.

Grand Strategy Matrix

The Grand Strategy Matrix is a tool to chart the position of a product or company within a market (Frances, 2014). It is a tool that formulates feasible strategies. The Grand Strategy Matrix is based on two dimensions: competitive position and market growth (Frances, 2014). Starbucks must lay in Quadrant 1 because the market growth is 10% and its competitive position is strong. The categories that got them to where they are listed below:

1. Market Development

2. Market Penetration

3. Product Development

4. Forward Integration

5. Backward Integration

6. Horizontal Integration

7. Concentric Diversification

Firms that are in Quadrant I are known to be in an excellent strategic position (Frances, 2014). This is because they have a strong competitive base, and they can adapt to fast moving growth markets. They have more control in balancing and placing emphasis on the list of categories above. 

Quantitative Strategic Planning Matrix (QSPM)

A quantitative strategic planning matrix (QSPM) is a high-level strategic management approach for evaluating possible strategies and uses an analytical method for comparing feasible alternative actions (Complete guide, 2020). When applying QSPM businesses perform a thorough examination of the current business situation, which leads to the creation of a strategic map for the organization identifying competitive advantage and opportunities for the future (Complete guide, 2020). Starbucks can utilize the QSPM to determine if it needs to pursue an aggressive strategy aimed at continued expansion of the company or obtaining competitors. The most acceptable option depends on the overall attractiveness score. The higher the score, the more attractive that option is. Based on the scoring listed on the QSPM, the choice to continue to expand the business is a better option. The expansion of the business scored at 3.05 and acquiring competitors has a smaller score of 2.80.

Alternative 1 Alternative 2

Continue expanding Obtain competitors 

Factors	Weight	Alternative Score	Total Attractiveness score	Alternative score	Total attractiveness Score
Strengths
Great Quality Product	.5	3	.15	2	.10
11.21% increase in revenue in 2021 third quarter.	.3	3	.9	.2	.6
Highest market share in the United States	.8	4	.32	3	.24
Most coffee locations in the United States	.5	3	.15	2	.10
Total sales assets for Starbucks were $28.372B	.6	4	.24	3	.18
Operating margin was 6.35%	.7	5	.35	4	.28

Factors	Weight	Alternative Score	Total Attractiveness	Alternate score	Total attractiveness Score
Weaknesses
Costs of production	.8	2	.16	2	.16
The market is mainly U.S dependent	.9	2	.18	2	.18
Highest market share in the United States	.8	4	.32	3	.24
Three Billion dollar hit in revenue because of the pandemic	.9	2	.18	1	.9
Total sales assets for Starbucks were $28.372B	.6	2	.12	1	.6

Opportunities
Globalization makes it easier to get more market opportunities	.5	4	.20	3	.15
Free Wi-Fi gives an opportunity for customers	.1	3	.30	2	.2
Fast Foodservice is getting more popular	.7	2	.14	2	.14

Threats
Inflation rates make products more expensive	.10	2	.20	2	.20
Many other competitors	.10	3	.30	2	.40
Increase in market and supermarket	.10	2	.10	2	.20

Sum of weight	Total Attractiveness score for Alternative one	Total Attractiveness score for alternative two
1	3.05	2.80

References

Complete Guide to the Quantitative Strategic Planning Matrix. (2020). Strategy. https://welpmagazine.com/complete-guide-to-the-quantitative-strategic-planning-matrix/#:~:text=Quantitative%20Strategic%20Planning%20Matrix%20(QSPM,the%20strategy%20formulation%20analytical%20framework.

David, F. R., David, F. R., & David, M. E. (2020). Strategic management concepts and cases: A competitive advantage approach (17th ed.). New York, NY: Pearson Education. ISBN-13: 9780135203699 Comment by Daniel Smith: APA 6 - please use 7.

Frances, A. (2014). Grand Strategy Matrix. MBA Knowledge Base. https://www.mbaknol.com/strategic-management/grand-strategy-matrix/

Starbucks Financial Statements 2005-2021. (2021). Macrotrends. Starbucks Financial Statements 2005-2021 | SBUX | MacroTrends