Starbucks
Starbucks started in 1971 and by creating a cozy third place to customers beyond home and work and offering a slightly higher price yet fine quality coffee, within 25 years, it had opened just over 1000 stores. In order to maintain its leadership position, Starbucks had continued pursuing growth opportunities by selling Starbucks products through mass distribution channels and expanding its retail footprint. Along with the rapid expansion and success, Starbucks has encountered financial downturn in 2008, and the rise of competitors from both high price independent coffee shops, smaller coffee chains that resembled pre-expansion Starbucks model, to low price fast food restaurants chain McDonald’s and Dunkin’s Donuts has deteriorate the situation. Now, Starbucks must determine how to balance its rapid expansion with its strategic position, while facing fierce rivalry among its competitors.
Major Drivers of Starbucks’ Competitive Advantage
Several drivers contribute to Starbuck’s competitive advantage. Frist, by offering a wide range variety coffee offering in a comfortable setting, the third place beyond home and work, Starbucks has created value for customers in a way they are willing to pay more than its competitors. Second, the unique customer experience and culture in stores provided by friendly barista and supported by Italian lingo for drink sizes, increase the perceived customer value by differentiating Starbucks with competitors. Third, Starbucks’ regular innovation in new products’ flavor, along with increasing the number of stores, helped it achieve economies of scale and scope. Finally, by replacing La Marzocco espresso machines with push-button machines, Starbucks simplified the hiring and training process and enhanced goal for meeting the three-minutes service by reducing time.
Internal & External Analyses
Several competencies stand out from a VRIO-framework perspective. Starbucks’ wide presence in term of 16,858 stores globally is a valuable and
Major Drivers of Starbucks’ Competitive Advantage
Several drivers contribute to Starbuck’s competitive advantage. Frist, by offering a wide range variety coffee offering in a comfortable setting, the third place beyond home and work, Starbucks has created value for customers in a way they are willing to pay more than its competitors. Second, the unique customer experience and culture in stores provided by friendly barista and supported by Italian lingo for drink sizes, increase the perceived customer value by differentiating Starbucks with competitors. Third, Starbucks’ regular innovation in new products’ flavor, along with increasing the number of stores, helped it achieve economies of scale and scope. Finally, by replacing La Marzocco espresso machines with push-button machines, Starbucks simplified the hiring and training process and enhanced goal for meeting the three-minutes service by reducing time.
Internal & External Analyses
Several competencies stand out from a VRIO-framework perspective. Starbucks’ wide presence in term of 16,858 stores globally is a valuable and