Case Study: The Competitive Advantages Of Starbucks

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The Competitive Advantage of Starbucks To become a successful company and to survive long-term in the industry, the company must create a competitive advantage, which means the company has to have a greater profitability than its rivals or the average profitability of the industry. According to the textbook, Essentials of Strategic Management, the value creations of products, lower costs, and establishing differentiation are main sources of competitive advantage. In addition, the company must have four factors to build competitive advantage; those building blocks of competitive advantages are efficiency, quality, innovation, and customer responsiveness (Hill, p87). This paper will analyze the competitive advantage of Starbucks focusing on …show more content…
Starbucks has focused on selling and serving specialty coffee that is a high quality coffee than coffee sold at regular supermarkets. Selling high quality coffee creates more value to consumers. To ensure obtaining higher quality coffee than its rivals, Starbucks has successfully established a firm relationship with suppliers. Starbucks conducts tight quality checks of every shipment of 250 bags by that extracting samples of coffee from three different stages, which are offer sample before an order in place, sample right before shipment, and after the shipment arrives at the coffee roasting plant. Starbucks can reject the coffee at any stages if a sample is out of its quality standards. Starbucks also has skills and technology to produce the same quality and flavor as their House Blend by using different mixtures of coffee beans. In addition, SCO protects the quality of its coffee from oxygen during roasting and packaging. Thus, it can always provide customers stable high quality coffee, and its coffee has attributes of quality as reliability, which increase the value of products to …show more content…
It allows a company to have better differentiate and/or achieve lower costs than its rivals leading to a competitive advantage. As stated above, the human resources of Starbucks are very unique resources and define its differentiation. In addition, there are several other resources and capabilities contributed to distinctive competencies of Starbucks. Starbucks uses unique real-estate approach and has a loyal relationship with the real estate network. The real estate managers of Starbucks work with real estate professionals who identify the best retail locations. Starbucks also have a great design team that creates a comfortable space fitted in any shapes of room. Thus, Starbucks has capability to obtain retail stores at great locations and to provide a better space to its customers, and also its employees can provide better customer service to the customers than its competitive. The marketing department of Starbucks has created the brand equity of Starbucks beyond being coffee retailers. Starbucks provide its customers better experience and better place to socialize. In addition, the organizational culture of Starbucks aids to provide employees incentives. Starbucks baristas have received better benefits than employees of its competitors and have opportunities to talk directly top managers. It established adequate

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