Etude de cas Starbuck

[pic 1][pic 2]

[pic 3]

Index

Introduction

I. Starbucks in the Porter-Matrix   

II.Unique activities and Competitors   

III. Unique Elements of Starbucks’ Strategy

1. Inbounding Logistics
2. Operations
3. Outbounding Logistics
4. Marketing & Sales
5. Service

IV. Challenges   

1.       Emerging markets   

2.       Connectivity   

3.       New concepts

Conclusion

Sources     

Introduction

Everything was started in a small market. Starbucks Coffee was founded in 1971 at the Pike Place Market in Seattle, the U.S. and local people there enjoyed its coffee. When Howard Schultz, the current chief executive officer, started his career in Starbucks Coffee, he found out the potential in Italian espresso he was impressed and aimed at operating such a coffee bar also in the U.S. After the big success of the coffee bar project, Starbucks has started to expand through the world. Stared from the first international store in Japan in 1996, now there are more than 24,000 stores in 70 countries and can be said it is one of the best world-wide coffee shops. There should be any reasons for its success despite it has only been about 45 years since its establishment. This paper mainly focuses on the Starbucks strategy based on these categories; 1)Starbucks in the Porter-Matrix, 2)Unique activities and competitors, 3)Unique elements of Starbucks strategy and also analyze some challenges from the research.

I. Starbucks in the Porter-Matrix

[pic 4]

Many firms, try to work hard until they can dominate or monopolize their products. But sometimes, fighting only for price superiority may not be the best approach and there is when differentiation takes part of the strategy. One of the obstacles of the coffee industry, is that it is characterized by a multitude of firms with identical products and very little ability to differentiate their product. For us as customers, perfect competition is desirable given its efficiency to maximize social welfare, but for companies, it can be a big obstacle to overcome, an obstacle that sometimes can even push a company until the end of its timeline.

Michael Porter’s Matrix proposes different generic strategies: overall cost leadership, differentiation and focus. Overall cost leadership implies the pursuit of cost reductions in all areas of a firm that is contrasted with the generic strategy of differentiation, which involves the creation of something that is perceived by the industry as being unique. The last generic strategy mentioned is focus, which targets a particular group, geographic market, or segment of a given product line.

Even though the Starbucks seen today would seem to fit the generic strategy of differentiation for first impression, the original strategy used by Starbucks was closer to the generic strategy of focus with an emphasis on differentiation within the particular target consumer segment.

Their original store, founded in 1971, was known for their high-quality standards and knowledgeable staff oriented to a small segment of people, but the Starbucks’ stores concept that is now worldwide known did not begin until 1987 when Howard Schultz acquired the company.

Nowadays, the Starbucks company that had humble beginnings, is a billion dollar company with over 21,000 spacious outlets in more than 65 countries. Of course their strategy has changed through its timeline, creating a different positioning of the brand, for example in order to adapt to the new eras of technology, Starbucks is extending their sense of community through social media channels as well.

The core competence of Starbucks has been its ability to take advantage of its value proposition as a place that not only offers a premium product mix of high quality beverages and snacks, but also to providing each customer a unique “Starbucks Experience”, which is derived from a great layout and a remarkable customer service, building a high degree of customer loyalty every day.

All these factors, those not only continue to draw loyal customers, but also support the “differentiation” approach from the company to the entire industry can be summarized into:

1. Starbucks Is a Place For Everybody

Currently, coffee is far from being the only menu option.

If you have a meeting with somebody whose food preferences you don’t know, going to Starbucks is actually pretty safe decision.

2. Starbucks generates a particular Atmosphere

Customers know what to expect when they enter through the heavy glass door, small green letters hanging overhead on the building exterior. A Starbucks interior in Boston won’t look too different from one in Tokyo, creating a warm atmosphere that gives you the sensation of being comfortable on a place you know.

3. Starbucks is Convenient

Is $3 really that expensive for a decent cup of coffee, free wifi access and for a special atmosphere in which to sit and work is a comfortable experience?

Perhaps the quality of Starbuck’s products, experience is the key to winning over customers’ palate.

II. Unique activities and Competitors

1. Internal and external system 

Starbucks activities can be divided into 2 ways, the internal system and external system. the internal system is consisted of "3c and 3m" and welfare and these are the systems for the employees. "3c and 3m" expresses the pursuing attitudes of employees of Starbucks and 3c is related to basic education of employees. It includes the meaning of coffee man, culture man and customer man. Coffee man means a person who has a passion on coffee, Culture man means a person who realize that Starbucks is not just the place selling coffee and can create cultural contents of itself. Lastly, Customer man means a person who understand the curiosity of customer well and who can respect it. Also, there is a 3m system and this is the system of given qualification for master and it is composed of coffee master, service master and equipment master. To say much more specifically, there is the education for master class from barista to district manager so employees can grow up stage by stage gradually. The goal of this common education is providing high quality of unified services to customer. In addition to this education system, Starbucks has high quality welfare system for employees. Also, for the welfare of employees, Starbucks provides 4 major insurance; national pension, health insurance, employment insurance, industrial insurance. Furthermore, SSG money which is kind of 'Fintech' that is combined with finance and technology is given to employees. They can use it as real money and recreational facilities of Starbucks such as fitness club are available for the employees for free.