Starbucks is a true leader among coffee retailers around the world. The experiment with coffee house format (Closing Case) became a winning strategic concept of exceptional comfort and personal space where clients could enjoy meeting with friends while they get to choose among a great variety of coffee beverages, pastries and have a look at other coffee accessories right in the bar. The retailer invests a solid amount of time creating unique ambience of its outlets. In this way, a simple cup of coffee becomes an unforgettable experience indeed, stylish and casual at the same time. The corporation leaves behind its competitors with out of the box ideas which have a direct impact on efficiency and quality of services it has to offer to its audience.
Starbucks sustains a strong competitive advantage. As a result, the retailer has above-average profitability and enjoys its brand recognition. The superior position of the coffee chain lies, first of all, in its core competencies: a unique managerial concept Howard Schultz, the company’s director of marketing, once came up with after his trip to Italy. A strong belief of the executive in “more than just coffee but selling an experience” (Closing Case) has defined a bright future of once a small coffee store in Seattle.
Another ingredient of Starbucks’ success is its resources. Premium coffees and teas along with its skilled personnel comprise the distinctive assets of the retailer. Schultz was sure that employees truly believing in company’s values are able to deliver customer service excellence (Closing Case). Skilled human resources and knowledge they have gained are particularly valuable when they either lead to a higher demand for company’s products or lower its costs (Hill & Jones, 2009) making the firm stand out among its opponents.
Next reason for Starbucks’ superior performance is its recruiting and talent management system which is basically its exclusive intellectual property. Recruiting and coaching sessions developed by company’s senior executes are believed to be first-rate in the industry. The sessions teach baristas both the art of coffee preparation and explain employer’s values and perception with regard to exceptional customer service. In addition to being a part of a globally recognized brand, the personnel are eligible for attractive bonus plan. Unlike in many other coffee chains, even part-time employees are eligible for benefits package at Starbucks. This capability of managing talents allows the corporation to use its resources effectively. Hill and Jones (2009) believed that firm’s distinctive expertise is the strongest when it possesses both valuable resources and unique capabilities to manage those resources. Starbucks is a classical illustration of this concept.
Additional strength of the corporation is the fact that despite the popularity of franchising business, Starbucks prefers to rely on its own capabilities. The idea worked for company once and they continue to support this classical approach while enlarging their overseas operations. In other words, Starbucks stays faithful to its strategic tactics and is not willing to change a successful roadmap of its global expansion they once adopted.
While Starbucks owns the winning set of capabilities and competencies it cares to secure its assets and creates barriers for their duplication. According to Hill and Jones (2009), barriers to imitation are the instruments that make it difficult for a rival to copy company’s distinctive competencies: the higher are the barriers to imitation, the more durable company’s competitive advantage is. Usually, either resources or capabilities of the superior company are being targeted. Whether it is resource-related practice or capabilities’ matter the retailer guards its assets zealously. Starbucks offers industry-best training opportunities and attractive compensation package the employees of other coffee companies do not have with no regard if it’s part-time or full-time staff. In addition, the corporation does not choose an easy way when it comes to its location strategy. The latter is the result of a complicated demographic research (Closing Case) which allows Starbucks to expand globally picking the best locations for its stores before they are captured by the competitors. As we can see, the coffee bar is always a step ahead of its rivals which makes its competitive advantage durable and secure.
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Starbucks is an undeniable leader among coffee chains, able to maintain its competitiveness and sustain the leading position across multiples geographies over years. The corporation is an iconic example of strategic intelligence and creative approach in operating business.