Starbucks had four different ways to grow, and used all of them

When Howard Schultz built Starbucks into a coffeehouse chain that people would pay four dollars to sit in, he had, in effect, only one growth lever to pull: open more stores. For years, that was enough. But once a company has saturated the obvious growth avenues, the question Kotler and Armstrong pose becomes unavoidable: where does a business go next, especially when it's already the size of a company with more than 34,000 stores in over 80 countries?

Kotler and Armstrong lay out four distinct paths, using Starbucks as the running example, and the more interesting insight isn't any single path but the fact that a mature company can and often should pursue several at once.

The first path is market penetration: selling more of what you already offer to the customers you already have, without changing the product. Starbucks pursued this by opening new stores in areas it already served, and by tweaking prices, service, and its food menu so existing customers would visit more often or spend more per visit. Breakfast sales alone doubled over four years using this approach.

The second path is market development: taking an existing product into new markets. For Starbucks that meant expanding rapidly overseas, particularly in China, where the store count grew from 800 to 6,000 in eight years, at one point opening a new location roughly every fifteen hours.

The third path is product development: creating new offerings for markets the company already serves. Starbucks did this with instant coffee, ready-to-drink bottled beverages sold in grocery stores, and new store formats built around mobile pickup rather than sitting and lingering.

The fourth and riskiest path is diversification: moving into businesses beyond the company's existing products and markets altogether. Starbucks tried this with its premium Reserve Roasteries and, inside some of them, an entirely separate Italian bakery concept built around a famed baker's recipes, stretching the brand well past coffee.

What Kotler and Armstrong want a reader to notice is that these four paths carry very different levels of risk, roughly rising in that order, from tweaking what already works to betting on something the company has never done before. A company under pressure to keep growing doesn't have to gamble everything on the riskiest option. It can, like Starbucks, work the safer levers first, and reach for diversification only once the closer options are already being pulled.

Start with market penetration: find a concrete way to sell more to the customers you already have before you consider anything riskier. Then map your four options honestly, writing one real idea for selling more to current customers, reaching a new market, building a new product, and diversifying into something genuinely new. Rank those four by risk rather than by how exciting they sound, and work the safer moves first. If your resources allow it, pursue more than one path at the same time, because growth for a mature business rarely comes from pulling just one lever. Notice which path you keep avoiding, because that's usually the one you're most afraid to test.