The paper "Competitive Strategies for Starbucks Coffee" is a good example of a management case study. Starbucks’ international strategist, Schultz employs a number of competitive strategies as suggested by Michael porter. These generic competitive strategies include and not limited to the following. Cost leadership strategy aims at achieving a competitive advantage for developing an edge that makes a company improve the volume of sales and makes it different from its competitors. In addition, a cost leadership strategy enables a company to become a leader in cost minimization in the industry. In a bid to cut costs, Starbucks adopts joint ventures instead of foreign direct investments.
This is because joint ventures enable the company to cut all costs that come with engaging in foreign direct investments. For instance, Starbucks entered into a joint venture with Pepsi Cola Company to invest in making bottled Frappuccino. This joint venture bounds Pepsi Cola Company to contribute a certain amount of money to cater for the production of Frappuccino. Notably, Starbucks successfully enters into a joint venture with Dreyer’ s Grand Ice Cream Inc whereby the two companies cater to the cost of producing the leading brand of coffee ice cream in the United States.
These joint ventures help Starbucks to cut their costs and as such, they can be termed as cost leadership strategies. The focus strategy This strategy involves a company concentrating in a particular market segment and understanding the dynamics of the needs of the customers in those markets. This focus on a particular market segment prompts a company to produce specific products and low-cost products for that market. This market puts off competitors from entering such market segments.
Notably, Starbucks has entered sixty (60) markets outside North America. Consequently, through a partnership with international foreign agencies, Starbucks was able to open the international coffee house in Tokyo in the year 1996. To appeal to different markets, Starbucks strives to address the local needs of each market. This is informed by the fact that each market has its own needs and requirements. Moreover, the partners chosen by Starbucks must demonstrate brand-building skills and knowledge of the local market needs. This enables Starbucks to meet the needs of each specific market based on the information they get from their partners in those international markets. Additionally, Starbucks is able to monitor sales through a point-of-sale system that receives information about the sales made each day at the headquarters in Seattle.
This system of tracking sales enables the company to identify the markets which demand more of a particular coffee brand and as a result invests in increasing supply to such markets. Notably, executives of Starbucks are able to monitor the buying trends in different markets and thereby advise the CEO accordingly.
Moreover, the information shared by the executives to the management of the company is useful in making decisions concerning different market segments. These decisions touch on the efforts to address the needs and requirements of the customers in different market segments. The differentiation strategy This strategy involves a company making its products different and more attractive than those products of its competitors. This strategy depends on the nature of the industry within which the company operates as well as the nature of products and services. Moreover, the durability, functionality, and brand image also matter to the success of the differentiation strategy.
Notably, Starbucks produces the number one coffee brand in the United States. This is as a result of successfully adopting a differentiation strategy. Moreover, Starbucks has brought a difference in making bottled coffee. This has happened through cooperation with the Pepsi Cola Company. The fact that Starbucks recruits experienced personnel to prepare coffee drinks makes their products unique to the target customers. This implies a differentiation strategy whereby the products that Starbucks sells to the customers are of higher quality and different from the products that their competitors sell to the customers.
ReferencesSamson, D. & Daft, R.L. (2015). Management. 5th adtn. South Melbourne, Vic: Cengage Learning Australia.