The paper "Critical Analysis of Starbucks Coffee" is a perfect example of a management case study. Started in 1971 by two teachers and writer in Seattle, Washington, Starbucks Coffee Company is regarded as a leading coffeehouse in the world. The company boasts of operations in over fifty countries in the world (Starbucks, 2014). By 2015, the company had over twenty-three thousand coffee shops in different locations in the world. The company offers its customers quality services, an inviting atmosphere and exciting and exceptional coffee (Simmons, 2012). In this report, the paper focuses on three questions that make a critical analysis of the organization. Q1. Porter’ s generic strategies are tools that help one to undertake a competitive analysis of an organization.
According to Porter, organizations can use three types of strategies to achieve competitive advantage. These include cost leadership, differentiation and focus (Porter, 2011). Differentiation as strategy denotes to the delivery of quality products or services that are distinctively unique and create value for customers. Differentiation is a strategy that ensures that organizations, like Starbucks, offer products and services at higher prices based on the market segmentation to maximize their profits (Becerra, Santaló & Silva, 2013). The core competitive strategy used by Starbucks is a differentiation strategy.
Under the strategy, the organization seeks to offer unique products and services valued by its customers. The organization offers a differentiation approach through its excellent customer experience, known as the “ Starbuck experience” and quality coffee (Starbucks, 2014). The unique customer experience is achieved through the design of its stores where there are good ambience and well trained and groomed staff. The differentiation strategy has enabled the coffee shop to charge premium prices and offer unique coffee drinking experience to achieve a sustainable competitive advantage in both its domestic and international markets (Simmons, 2012). The organization has managed to expand at a remarkable rate due to the changes it formed concerning the traditional approaches to brand marketing.
The organization has been able to propel one of the oldest products in the world and turn it into a differentiated and value-added brand, especially at a time when there were raised perceptions in the retail sector of products and services because of the economic situation.
The ability to be different from the cost of production is what has made the difference for the organization. Imperatively, the differentiation strategy adopted by the organization ensures that it will remain competitive and allow them to grow sustainably in the future. The strategy will ensure that the organization is less vulnerable to the market externalities (Becerra, Santaló & Silva, 2013). Furthermore, its concept will remain difficult to emulate. To achieve differentiation, organizations like Starbucks, have to invest in exceptionally high-quality product offering, incredible quality service delivery, innovative designs, and technological capabilities (Marques, Camillo & Holt, 2015).
Furthermore, they must ensure that they create a positive brand image that attracts customers because of the quality products and services offered (Thompson et al. , 2013). Whatever product or service that an organization chooses to pursue its differentiation strategy, it must ensure that it sets it apart from its competition. Secondly, the selection must justify the premium price that clients must pay so that they enjoy the difference from the competition.