Case study: Starbucks Coffee

1416 Words Jul 3rd, 2006 6 Pages
Q1) The Porter's competitive strategies which is Starbucks using is differentiation strategy. Following a differentiation strategy, Starbucks seeks to offer unique products that are widely valued by customers. The speed with which Starbucks had managed its ascent was almost as remarkable as the changes it had formed in traditional conceptions of brand marketing. At a time of rising perceptions of correspondence across most product and service categories throughout the developed world, Starbucks had managed to take one of the world's oldest commodities and turn it into a differentiated, lasting, value-laden brand. The attraction of differentiation over low cost as a basis for competitive advantage is its potential for sustainability. It is …show more content…
Each barista receives 24 hours of training in coffee making, customer service and basic retail skills. Starbucks also enhances the customer relationship by soliciting feedback about patrons' experiences with Starbucks. The customer's relationship with Starbucks is taken into account when the company considers new product offerings to expand the brand. For Starbucks activities, feedback is the only viable type of control available. Feedback controls provides managers with meaningful information on how effective their planning efforts were. Feedback that indicates little variance between standard and actual performance is evidence that the planning was generally on target. If the deviation is significant, a manager can use that information when formulating new plans to make them more effective.

Although Starbucks is best known for its retail stores, the company has a growing wholesale grocery business selling. And Starbucks is leveraging its brand recognition by partnerships with PepsiCo, who sells a new bottled coffee drink. Starbucks has chosen to enter into licensing agreements rather than franchise its stores - another form of alliance - in order to retain more control. Franchising and licensing agreements are similar in that an outside entity is selling the brand. However, licensing provides Starbucks with more control of the brand because the licensee does
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