Question

For Starbucks what is a recommended action they should implement? Be sure to justify and discuss the positive and negative effects. What is the step by step procedure of how to implement the recommended action for Starbucks?

Answer 1

Starbucks should adopt a brand differentiation strategy through uniqueness in their product and product differentiation for the promotion of its products; and should utilized innovation in its services and products that is different from that of its competitors. Starbucks should position itself best coffee brand in the market by providing attractive store design, locations, elegant taste and high quality coffee beans.

Starbucks should offer a unique coffee experience to it's customer in order to gain competitive advantage in the market. Experience is the core philosophy of differentiation strategy of Starbucks that elevates mere coffee purchases to emotional and cultural consumptions. To be specific, with the usage of unique characteristics of atmosphere, environment, communication and decoration inside Starbucks coffee stores, it infects its customers’ experience and emotions, creating the essence of its brand value. Thus product differentiation in terms of premium product mix, coffee beverages reputation, unique environment, and supreme customer service that translated to build a premium valued brand for Starbucks which is costly to imitate for competitors.

However the disadvantages includes the high cost of production such as taxes, locations, employees wage etc because they do by their own. They may face the brain drain which results to more competition later on because they hold the ability to learn the firm core competence betray them later. Moreover they do little ads for promoting their brand.