Starbucks: An Alex Poole Strategy Case Case Study Solution
In addition to this, through expansion efforts of the company into juice, tea, pastry and new distribution channels, the management of the company is able to create valuable, rare and imperfectly imitable economies of scale. It is imperative to note that the Starbucks has significantly gained competitive advantage over the market rivals, especially with the globally appreciated brands that has been highly recognized for the premium quality products. Also, the innovative abilities of the company as well as having more than 17000 outlets all around the globe has made the company rare, valuable and difficult to imitate. Not only this, the company has become able to make its products range accessible and available to the mass market all around the globe. In addition the value of the products offered by company has enhanced and it is difficult for the market competitors to imitate products.
In addition to this, it has been recognized that the market for the coffee product offered by Starbucks entered into the declining phase, the company is concerted its efforts to take the preemptive measures for the purpose of ensuring long term growth and profitability of the coffee products. The Starbucks’s unique approach and style for producing products makes the brand unique in the market amongst competitors. The strong global presence of the company does not allow the competitors to imitate such capability on regular basis.
Furthermore, the company offers differentiated products which includes premium product mix, supreme customer service, coffee reputation and location that is translated to build the premium valued brand which is not easy for the competitors to imitate.
The core business of the company is the grand vision for selling finest quality products to its customers. By acquiring various brands including Teavana and La Boulange as well as integrating its products, has aided Starbucks in improving the core business value via offering customers more products. In this manner, the company is not being destroying value but developing it in order to meet the clientele base diversity.
Core Competencies of Starbucks
Significantly, the core competencies of Starbucks are uncountable, few of them includes the ability of the company to leverage its cornerstone products differentiation strategies in effective manner by catering customers a premium product mix of quality snacks & beverages. The company’s brand equity is put up on providing the premium quality coffee as well as related products, hence offering unique “Starbucks Experience” to customers that has been resultant from the supreme customer service and well-maintained and clean stores, hence developing the customer loyalty with the cult following.
Another core competency of the company is the value based approach of the human resource management for building strong and positive external and internal relationship with suppliers, which in turn tend to drive the successful deployment of the horizontal integration through alliances and acquisition, business strategy of organic expansion into global market arena, allowing Starbucks to maintain its long term strategic objective being the most respected and recognized brand all around the world. Additionally, the core competency of Starbucks are its unwavering focus on the exceptional customer service, continuous care for its employees, and the product development, all of these competencies and capabilities allowed the company to enjoy the dominant and leading position in the market.
Various other core competencies of the company are as follows;
- The turnover rate of employees of Starbucks is relatively in comparison to other organizations in the beverage industry which indicates that the Starbucks employees’ level of satisfaction is quite high.
- As compared to the customers of Starbucks competitors, the consumers of Starbucks are happy i.e. mainly due to the efforts and performance of its employees’. As to make anyone happy, it is important to be happy as Starbucks employees are.
- Starbucks is one of those hundred organizations in the world with candidates are willing to work with great interest. This claim has been reported in the Fortune of 1998 to 2000 and which again remained in continuation from 2002-2008.
- The involvement of Starbucks in programs related to social concerns are observed in which trending programs are minimization community strength, environmental footprint, creation, investment towards the way leading to increased chances and offers of sustainable, ethical and high quality products.
- Position of Starbucks in international market is strong enough and its strategies related to differentiation of product creating strong proposition of value in the consumers’ minds which significantly assist them to gain a potential competitive advantage against its rivals in the market.
- Dedication and continuous efforts of Starbucks in bringing innovation and advancement in the products is commendable. For this purpose, Starbucks has expanded its research and development in order to distinguish its products in terms of grabbing the consumer attraction towards them comparatively to its competitive products.
- Stores of Starbucks are the main source of attraction for its customers due to the availability of numerous functionalities, through imitation of community culture providing its customers with a memorable experience.
- Last but not the least, the Department of human resource management of Starbucks is engaged in development of strong relations with both internal and external government, suppliers, and employees of the organization.
Business Level Strategies of Starbucks’s Competitors
Imperatively, the Starbucks is always known for maintaining the competitive advantage by being the valuable leader in product innovation. The market is highly competitive due to the large number of market players that has been intensifying the competitive rivalry. The company has several competitors of different size. In relation to this, there is a moderate population of market competitors in terms of strategy and specialty.
The market competitors of Starbucks includes Dunkin Donuts and McDonalds mccafé and so forth. The business level strategy of McDonalds includes product differentiation and cost leadership strategies which are used in order to compete in the food service industry. McDonalds tend to presumably use the same business level strategy for its mccafé initiative. To be the cost leadership in the market and offer superior quality products at low cost, it tends to offer inexpensive drip coffee to its customers, the mccafé shops and mccafé brands has given McDonalds an entry into the profitable and pricey premium coffee segment…………
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