What I’ve Learned from analyzing Starbucks’s Strategy
Starbucks is living its vision as trying to be the best retail chain through coffee experiences. Just like Mcdonald’s, Starbucks real business is in the property business. Its main competitive advantage is through delivering coffee experiences closer to people’s homes. Starbucks never claim to be the best in the brewing coffee business and yet Its strong brand is synonymous with good coffee and comfortable place for hangout. Through vast experiences on Its market survey, Starbucks seem to confidently implement new technologies into Its main purchasing system.
The main challenge that Starbucks facing is the growing number of local coffee competitors with competitive prices and high-quality coffee beans. Starbucks seems to be struggling to keep Its exclusivity and maintenance cost especially in this pandemic era due to trying to maintain Its brand as a comfortable hangout place to dine-in while other local brands adapt to keep their maintenance cost low by only accepting takeout orders. By Its exclusivity Starbucks also losing slowly Its exclusivity because of Its aggressive branch expansion closer to people’s homes, offices and almost everywhere.
Its ability to effectively leverage their cornerstone product differentiation strategies by offering a premium product mix of high quality beverages, snacks, and comfortable hangout place.
Starbucks’s brand equity is built on selling the finest quality coffee and related products, and by providing each customer a unique “Starbucks Experience”, which is derived from supreme customer service, clean and well-maintained stores that reflect the culture of the communities in which they operate, thereby building a high degree of customer loyalty with a cult following.
Its human resource management’s value-based approach for building very strong internal and external relationships with suppliers, which drives the successful deployment of its business strategy of organic expansion into international markets, horizontal integration through smart acquisitions and alliances that maintains their long-term strategic objective being the most recognized and respected brands in the world.
Starbucks didn’t follow franchising model and operated company oriented stores and joint ventures in international markets. Starbucks has made some key acquisitions such as Teavana, Bay Breads, Evolution Fresh etc as their diversification strategy.
Starbucks’s mission is “To inspire and nurture the human spirit — one person, one cup and one neighborhood at a time.”
As we all know pandemic mode is here to stay, Starbucks can inspire a lot more people by collaborating and support more local farmer’s lives. While also helping local young people to complete their education, perhaps also create a brewing school to keep a sustainable long-lasting company that everybody loves.
As the new CEO of Starbucks, Kevin Johnson is facing his own demise from his aggressive expansion, it is growing too many and too fast as more people get easier access to enjoy Starbucks’s experience, the more they will lose the exclusivity feelings or experiences from the customers, and then soon Starbucks coffees will just be so regular that not many people will get incentivized or feeling special to enjoy one.
