If they could eventually be the main producer of high quality coffee beans they would create a sustainable competitive advantage and alleviate the threat of another gaining this position. The horizontal integration I propose is to start selling their coffee into the grocery market. Even with this market decreasing it still hold a significant proportion of coffee purchases. Once people try their product from a grocery store it would entice some of that market to go to a Starbucks retail outlet where there would be a greater selection of coffee to choose from at similar prices. ImplementationThe best alternative is the last one discussed in the previous section. For this to be successful it has to be implemented correctly. The first stage of implementation would be to try and get a deal with McDonalds without using the Starbucks name. This will provide the company with extra cash. This cash should be used to set up international locations in the heaviest coffee drinking countries. This has to be done quickly as to get the jump on other that may also be considering this type of a move. At the same time they should be selling franchise right for the coffee carts. This will provide an increased cash flow as well. During all of this Starbucks should be looking at coffee producers who are in financial trouble or are looking at selling their farms. This has to be done discretely as not to cause unnecessary bad press. After they run a couple of these coffee producing farms for a few years they should be able to see how the whole operation works and determine its viability. Once it’s proven viable they should send out simultaneous offers to the biggest producers as to catch them and other coffee companies off guard. Starbucks also should be getting into the bottled Frappuccino as soon as possible. They should leave the introduction of the product up to Pepsi because of their past experience. They should leave their entr...
