The paper “ How Has Starbucks Company Managed to Gain Competitive Advantage in the Global Market? ” is a potent example of a case study on the management. Starbucks is one of the coffee houses performing well in the global market. The report discussed that Starbucks Company has applied the differentiation strategy to gain a competitive advantage in the market. Through differentiation strategy, the diversified needs of the consumers are met effectively, hence they are satisfied with the organization. Moreover, the multicultural leadership and hierarchical structure of Starbucks have also been used by Schultz to support the implementation of the differentiation strategy.
In addition, the report discussed that the international expansion strategies that have been used by Schultz include joint ventures, licensing and partnerships. The report argued that market segmentation and cost focus strategies will improve the competitive advantage of Starbucks. Starbucks coffee is one of the leading coffee houses globally. The strategies which have been applied by Starbucks have enabled it to achieve the largest market share (David et al 2012). The company was founded in the year 1987 and has grown tremendously and operates in more than 60 markets globally.
In this regard, this report will discuss the strategies which have been applied by the management of Starbucks to achieve a competitive advantage. Question 1: Competitive strategyThe overall strategy which has been applied by Starbucks is based on the differentiation of the products which are offered. This means that the products and services which are provided by the company are unique with the aim of meeting the needs of the target customers. According to the differentiation strategy, there are various strategies that have been implemented by the management to meet the needs of the customers (David et al 2012).
The first strategy is joint ventures. This is the strategy that is applied by the management to consolidate resources with the company of the same objectives to achieve better results by offering unique products. For instance, in the US, Starbucks entered into a joint venture with the Pepsi Company to make bottled Frappuccino. As a result, the company has managed to share the resources and reduce the risks like the risk of introducing new products into the market. The other strategy which is applied by Starbucks to implement the differentiation strategy successfully is the multi-domestic strategy.
In order to meet the needs of the local customers, licensing is done to local companies which have the same interests and license like the company to sell and distribute the coffee products to the customers (David et al 2012). The licensing of the companies helps to ensure that the needs of the domestic customers are incorporated into the coffee products. This is because local licensing aims at understanding the needs of the local customers and this can support the implementation of the differentiation strategy. There is also a company-owned operations strategy that helps to ensure that the needs of the local customers are met.
This is because the company sees global customers as the main contributors to the success of the company. The company-owned operations include multi-domestic strategies that help to offer coffee products to meet the needs and expectations of the local customers (Hill & Gareth 2012). This is because in the global market there are different needs of the customers in terms of the cultures and societal beliefs.
In this effect, the local needs of the customers and can be differentiated from those of the competitors in terms of quality and pricing.