Starbucks Case Analysis Essay

Pages: 7 (2138 words)  ·  Bibliography Sources: 2  ·  File: .docx  ·  Level: College Senior  ·  Topic: Business

SAMPLE EXCERPT . . .
Entrepreneurs in India have turned away from tea and adopted coffee as the nation has started to witness economic achievements (Grimm, Lee & Smith, 2006).

3.2.4 Threats

The last problem that needs to be analyzed is the threats the company is experiencing and will experience later on. A significant threat that it has to deal with is competitors, of which McDonald's is an emerging opponent. McDonald's can launch their McCafes in present franchise shops all over the globe, and they are targeting European countries. This gives McDonalds a leg up on Starbucks. If McDonald constantly opens McCafes through European countries and other areas around the globe because of the low starting expenses they experience, it could greatly decrease geographical opportunity benefits that Starbucks has over rivals like McDonald's (Pham-Gia, 2009).

4 Strategic fit

One of the key strategies that Starbucks followed since its beginning is that of item differentiation. This involves offering differentiators such as top quality item mix, places, coffee drinks image and superior customer support that helped to build a top quality respected brand, which is costly to mimic for opponents. Starbucks has also followed a shrewd technique of strategic partnership and ideal acquisitions. They did not follow franchising model and company focused shops and joint ventures in worldwide marketplaces. Starbucks has made some significant acquisitions like Tea items, Bay Bread and Evolution Fresh.

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Market penetration: This technique has been used to acquire more market share of items that are currently offered. The company has focused intensely on developing the quality daily encounter and differentiation of the encounter as a place to enjoy. In addition, Starbucks has desired to increase the methods of providing its items outside of the traditional shop. It has started out licensed retail places inside of supermarkets and established alliances with Kraft Foods, PepsiCo, and U.S. Foodservice, to distribute items to supermarkets and other food suppliers (Pahl, 2008).

Essay on Starbucks Case Analysis Assignment

Market development: the company designed the specialized coffee industry in the U.S. By teaching the American consumer. It also modified a product into a specialized offering as per customers' preferences. Since the beginning, Starbucks has developed this niche and continues to develop it as it expands into worldwide marketplaces.

5 Recommendations

Practical suggestions must be able to fix Starbucks' greatest issues. The first suggestion comes from the external diagnosis. Starbucks needs to pay more attention to item innovation. One of the determinant driving causes in the coffee market that functions as a positive impact is item advancement. The market must consistently endeavor to establish new item offerings for two reasons: to continue to entice new customers that do not buy from the current item mix and to serve differentiated products from competing companies. Starbucks needs to meet its customers' requirements, as they are part of the item advancement formula (Pham-Gia, 2009). Penetrating into Russian, South America, India and china can be very fulfilling for Starbucks, both strategically and financially. The company could use its financial strength to invest in the expansion without needing new debt. Some people think Starbucks needs to apply the franchising strategy to improve its retail impact and set up brand power quickly. As the leader in the coffee market, Starbucks can charge premium fees to generate extra income sources (Grimm, Lee & Smith, 2006).

6 Conclusion

Starbucks has managed a competitive advantage since bringing quality, bistro-style coffee options to the public. In order to remain current, it will need to pay attention to its primary capabilities. To fight opponents such as McDonalds and other coffee stores, they will need to create new value advancement by improving the client experience by making an investment in online content and interaction. Rather than developing more new products.

References

Grimm, C.M., Lee, H., & Smith, K.G. (2006). Strategy as action: Competitive dynamics and competitive… [END OF PREVIEW] . . . READ MORE

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