Summarize the overall strategy of Starbucks Management in its effort to create and develop a new concept and a rapidly expanding company. The overall goal of Starbucks Management was to create an American version of the Italian coffee bars that Howard Schultz had experienced first-hand in Milan. He believed that Starbucks should function as an important part of the community, as a meeting place for its customers. He wanted Starbucks to become an experience that would differentiate itself from its competitors. One of their key strategies in meeting this goal is a focus on customer service in order to create an experience for its consumers. Another one of their strategies is to ignite their emotional attachment with consumers. They also have …show more content…
The strategy that Starbucks uses is broad differentiation where they seek to differentiate their product offerings from rivals’ with attributes that will appeal to a large variety of consumers. The key market characteristic for the strategy of differentiation to work is that buyers’ needs and preferences are very diverse and cannot be satisfied with a standardized product offering. This is an evident characteristic of the market because consumers all have different preferences on the way they like their coffee. Which is the reason why Starbucks offers many different product options like lattes, skinny lattes, coffee, iced drinks, blended drinks, etc. They also offer fruit cups, water, and bakery items to provide even more options for their consumers. If a differentiation strategy is successfully implemented the firm will be able to do one of the following: command a premium price for its products, increase unit sales, and/or gain buyer loyalty to its brand. Starbucks has some of the highest prices for the type of products they offer and people tend to be extremely loyal to whatever coffee they are used to purchasing, because they trust the …show more content…
United Airlines, Hyatt, Hilton, Sheraton, Radisson, Westin hotels, and Wells Fargo all began to serve Starbucks coffee. A joint venture with PepsiCo came with the sale of a bottled version of the Frappucino drink and Starbucks Doubleshot espresso drinks. In 2008, they partnered with Suntory to sell ready-to-drink Doubleshot drinks in Japan. In 2010 a partnership with Arla Foods spread Doubleshot products and Starbucks chilled cup coffees into retail stores in the UK. A 1995 partnership with Dryers created a new line of coffee ice cream under Starbucks names that was later disbanded in 2008. At this time the rights to manufacture, market, and distribute Starbucks ice cream was given to Unilever. In 1998 Kraft Foods began marketing and distributing whole bean and ground coffee to supermarkets in the US. Tazo Tea was acquired by Starbucks in 1999 and in 2005 they acquired Ethos Water. A partnership with Jim Beam Brands created Starbucks Coffee Liqueur in 2004 and Starbucks Cream Liqueur in 2005. In order to offer healthier options they began offering skinny lattes, banana walnut bread, fruit cups, yogurt parfaits, a farmer’s salad, and smoothies in 2008. Also in 2008, Starbucks
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Starbucks and Tim Hortons Nowadays, the number of coffee drinkers are increasing. As the demand for coffee grows, the number of coffee chains is also increasing. Of that, the representative coffee chains in North America are Starbucks and Tim Hortons. Starbucks has the highest brand awareness amongst the world coffee chains. It started in Seattle, the United State in 1971.
All of these different drivers allow Chipotle to earn high profits because they increase the customer’s willingness to pay. The differentiation approach has held strong for the brand since 1993. The strength of their stock, high yielding profits and imitating competitors are all examples of the differentiation strategy being a success within the firm. Chipotle implements this differentiation strategy by promoting green farm to table.
They are focused on their suppliers such as coffee beans farmers and customers. Starbucks through the fair transition to keeping coffee beans market position and provide high-quality coffee as well as a comfortable place to customers enjoy Starbucks’ coffee and food. Also, Starbucks has involved a lot of community activities, so they are created a long-term relationship with the community. Moreover, Starbucks also focus on environment development. Such as cycling activities and water Conservation.
For the business-level, Trader Joe’s adopted a differentiation focus strategy. According to our textbook with this strategy, Trader Joe’s seeks to differentiate in its target market. They rely on providing better service than broad-based competitors. Specifically, they focus on the special needs of the buyer in other segments (Dess, Page 159). Joe’s differentiates its self from other grocers by providing a unique shopping experience fortified with their private label goods and great service from their crew members.
Businesses have been playing a crucial role in people’s lives. No matter what they go or what the occupations they are; people are drawn to get involved in businesses. However, behind the scenes of the business thriving, the environment is deteriorated each day. Many development schemes are come up with the plan related with the depletion of the environment (Shah, 2002). Because of people and environmental damages, attentions were drawn to corporations for ensuring their sustainabilities.
Specifically, Ralph’s (similar stores are Vons and Albertson’s) and Whole Foods (similar stores are Gelson’s and Trader Joes) are two firms that utilize cost leadership and differentiation. On one hand, we have Ralph’s using cost differentiation by providing a broad range of merchandise at a decent price. On the other hand, we have Whole Foods that has implemented a differentiation strategy by marketing their merchandise as healthier (organic). The trade of for both companies is that they are attracting less consumers by just marketing to a specific crowed. For instance, if Whole Foods had lowered their price and still sold premium merchandise, soon Ralph’s would be in trouble.
The organization I work for, Starbucks is highly diversified. In my opinion, Starbucks successfully employs each of the seven diversity components: “authentic leadership commitment, clear organizational communication, inclusive recruitment practices, long-term retention strategies, incorporating diversity into main work of the organization, diversity management metrics, and expansive external relationships” (CanÌas, Sondak 2014). With that being said, Starbucks could improve by incorporating diversity into main work of the organization. One way Starbucks proves their commitment to diversity is authentic by holding a diverse board of directors. Of the seven board members, three are women and one of these women is of an African descent.
The Industry demand has changed due to a shift in consumers’ attitudes towards healthier products. This placed Starbucks’ coffee culture at risk and threatened the company’s future. Starbucks has tailored their menu to include more organic and healthy product mixes, venturing into tea, bread and fresh juice products (Geereddy, n.d). Starbucks’ cornerstone product differentiation strategies and Human Resource Management are the main impacts to strategy formulation.
It is the long-term self-interest of Starbucks. Conclusion In conclusion, Starbucks only concern and goal is to generate profit. Thus, to achieve their goal, Starbucks is selfishly putting the small coffee retailers out of business to gain more profit and disregarding the effect that it could cause to the various stakeholders.
Starbucks sells high quality food and brands for affordable prices. Recently, the company launched a wine collection in addition to the coffee. Now, customers can enjoy a coffee in the morning and a wine after work. This strategy will bring more revenue to the company and will put the Starbucks on the map with other great small shops. The brand has also positioned itself best coffee brand in the market by providing attractive store design, unique environment, elegant taste and high quality coffee beans (Kotler & Keller, 2009).
Starbucks specifically staffs star skills to enable employees to maintain and enhance their self-esteem, learn to listen to other people’s ideas and seek assistance when appropriate, so that staff can work together and have the confidence to communicate with customers. Relationship between strategy, policy and procedure Strategy, policy and procedure are integral to Starbucks, and the strategy is to help Starbucks make long-term plans. The policy is to plan to accomplish the goal. The procedure is the process of action. Starbucks is about to achieve its goals in performance management, but also to meet the company’s long-term performance.
1.2. Product Differentiation This refers to differentiation that aspires to make a product more attractive by contrasting its unique qualities with other competing products (Investopedia, 2015:1), as in the case of Coca-Cola, other soft drink brands. Successfully adopting this strategy would have a company gaining a competitive advantage, as the customer would then view the product as unique or superior. This is what coca cola has managed to do, and has managed to do it on a scale that is globally unique, and globally recognized.
Differentiation Strategy: - It includes developing new products & services which satisfies customer needs, they offer much more values than their competitors. They differentiated the segment according to the customers. They provide multiple customer segments which includes moderately priced to premium priced customers for example: 1. Bulgaria resorts & hotels (The Ritz Carlton) - Target segment:-Luxury guest. 2.