Starbucks - business-level strategy Essay

658 Words3 Pages
Problem # 2 – Starbucks

Starbucks is and will continue to be one of the largest distributers of a cup of coffee today and into the future. The Starbucks mission to “inspire and nurture the human spirit – one person, one cup and one neighborhood at a time” directly correlates with the experience a customer has in each store. They have many ways to differentiate in comparison to competitors because they provide an experience while shopping for a coffee allowing them to charge a premium price.
The company has a focus on innovation through an emphasis of introducing new products and coffees such as “instant coffee” Via which generated a large sales growth of over 200 million. These new products consistently help Starbucks evolve as a
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Starbucks does not use direct advertising such as commercials, ads or other promotion. They do however; have one of the largest social media networks with one of the highest customer contact percentages on a daily basis. This is one way they continue to promote their brand with customers who have been with the company for a long time. At the same time Starbucks has made quality choices in generating “alliances” with companies who have a similar market segment or customer base. Some of these alliances have been with “Barnes and Noble, I-tunes, Green Mountain, Tata Coffee”. These have allowed Starbucks to differentiate their product in India, Canada, USA and China. They can provide their quality product in hotels, bookstores and specific markets that relate to their direct customer base. In terms of competition and the forces, which could limit the success of Starbucks it is important they stay ahead or even with other companies concerning innovative products. Many more micro companies are coming up with new products with a similar quality and a lower price/cost. It is important that Starbucks continues to search for innovative products to continually satisfy their customers. At the same time “rivalry” amongst Starbucks and smaller providers of coffee will continue to increase as the demand for coffee continues. The buyers bargaining power is significant as they can determine the cost, type of product, quantity and ultimately
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