Question

Review Starbuck's website and conduct other research about the organization to answer the following questions:

What are the organization’s competitive advantages and related strengths?

What are the organization’s competitive deficiencies and related weaknesses?

What factors need to be addressed by the organization in order to maintain its competitive advantage?

The factors that you should consider include: Does the organization have significant efficiencies, such as a lower cost structure, higher employee productivity or capital productivity than its competitors? What are these efficiencies? What are the perceived quality and/or reliability of your organization’s products? What position on the quality map for your company’s products does it hold? How innovative are your organization’s products? Is it perceived in the market in terms of its product innovation? Is it the industry leader or the lagger? How are the organization’s customer service and/or responsiveness perceived in the market? Would this perception be considered as a strength or a weakness? Why? What role will each of these factors play in how your organization maintains its competitive advantage?

Book: Strategic Management- case study

Answer 1

The greatest sustainable competitive advantage and strength that Starbucks had which allowed is to beat all competition and attain leadership within a segment which was extremely competitive to build a world-class brand image was an exceptionally strong leadership in the form of Howard Schultz who exceptional in the job of the chief executive officer taking the company from 6 stores when he took over to 27,339 retail locations worldwide with Dunkin doughnuts coming a lagging second with 10,000 restaurants. He retained devising of the corporate strategy along with its implementation and achievement of goals under his control while motivating the entire organisation through an exemplary performance.

The chief architect approach to corporate strategy where the owner or CEO is the chief strategist and chief entrepreneur exhibiting exemplary and strong leadership by taking strong decisions while handling the implementation of the strategy while taking on the entire responsibility for success of the strategy by ensuring achievement of the desired result. How much shoes CEO of Starbucks is a prominent example of this approach and Organisation was habituated to a strong CEO leading from the front formulating tough and effective strategies along with strong decisions to benefit the organisation whenever required.

The job of the chief executive officer is not only to device corporate strategy but to ensure its implementation and successful achievement of goals. An effective leader needs to generate results in every situation by exhibiting exemplary leadership qualities which enable the person to guide an organisation through crisis situations successfully by taking the required initiative to implement change and facilities transition in a situation requiring a leader to take absolute control and lead from the front why not only addressing concerns of all involve stakeholders but initiating and implementing positive change to ensure sustenance of the organisation during the crisis. in the present extremely dynamic and competitive economic environment most organisations are struggling for growth and survival due to existence of high level of uncertainties threats and constraints. It becomes essential that the management be extremely dynamic and ambidextrous in exploiting all available opportunities while optimising level of efficiency to control threats along with maintaining and gaining competitive advantage. In times of crisis strategy becomes extremely essential maintaining a clear vision with sharper focus on the mission along with goals and objectives of the organisation which helps to strengthen the decision making and motivate employees.

Positioning was a major strategy adopted by targeting a niche segment through innovation within the product in every manner right from presentation and design to packaging and product range flavours and quality. Coffee was re-engineered to become one for everyone along with an attitude of not resting on one's laurels and constant improvement through innovation and remaining in alignment with changing needs of the customer. With the customers becoming health conscious decaf was made available along with low sugar and low caffeine healthy options in the readymade beverage segment.

The business intelligence adopted was exceptional for product optimisation to ensure customer satisfaction as well as to use the information for expansion, with the firm using feedback from customers to introduce authentic coffee beans for gourmet coffee lovers. The quality was exception and this became another success story.

The strategy of building the brand from the beginning was a major focus with authentic quality providing a core value proposition for Starbucks. Howard Schultz on a visit to Milan, Italy, was impressed by the small espresso bars in every Street and conducted personal research by studying the methodology used the customer service along with how the customers reacted and the level of satisfaction, along with the lively cheerful and friendly atmosphere that was created. This resulted in the birth of an innovative idea which would take the world by storm and change the way people viewed readymade coffee forever. Exceptional customer service and satisfaction achieved through being attentive compassionate and giving exceptional importance to the customer was stressed upon in every outlet. This quality of service and product became the major strength of Starbucks by engaging the customer in an exceptional man by providing bonding over coffee as a unique concept.

This strategy also was subjected to constant improvement with extensive training for the service staff to follow strict guidelines in maintaining quality and an atmosphere which was optimistic and happy by encouraging customers to forget the problems and smile. value perception was further increased by improving on quality of service in the form of minimal wait time through quick service with time strapped commuters being tapped through strategic location of retail outlets outside high volume commuting points with special coffee on the go in spill proof cups and picked up in a flash.

Another major sustainable competitive advantage then why Starbucks has been of exceptional quality which it has maintained across every outlet worldwide. Dave olsen who was a compassionate coffee lover join Starbucks in the beginning to build a dream and work for the Vision and Mission of the company by implementing its core values of quality commitment unexceptional service by procuring the best possible coffee which he had the expertise for. The company works directly with over 300,000 coffee growers take every possible care to ensure the quality and flavour of the coffee beans is up to the standard required by Starbucks. The product is put to regress test for a perfect balance of flavour body and acidity with the form paying a premium for the product. another major competitive advantage is corporate social responsibility exhibited by the company by adoption of environmental leadership through ethical sourcing of oil products and adopting environmental protection processes across all its stores worldwide.

Starbucks in the initial stage of high growth required to adopt a clear and focus strategic position involving various trade offs to gain sustainable competitive advantage by ignoring various available options and opportunities not in alignment with the vision and core values of the brand.

Starbucks is a market leader on the basis of quality of product and customer service provided with customer feedback clearly showing a preference for Starbucks over McDonald's and Dunkin doughnuts.