Essay on Starbucks

691 Words Dec 25th, 2012 3 Pages
Starbucks has been at the forefront of technology to improve operational efficiency. This has been applied to the equipment used to manufacture their coffee, improved added service benefits at their stores and also advanced payment systems for their customers. The company has recently launched the Clover machine, which produces filtered coffee of the highest quality, due to it processing an individual cup at a time(
Starbucks have further developed their stores as a place of social gathering in line with technological trends by offering their customers free wi-fi in their North American stores. In addition to this, this wi-fi facility also has a digital network offering content on various subject matters such as News,
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As a result of this, they have developed a strong customer base globally.

The company's access to substantial financial resources also acts a deterrent to companies, thinking of entering the premium coffee industry. Based on this access to financial capital, Starbucks have the ability to continually invest in development of their products as well as their workforce, allowing the company to gain further competitive advantage.

Starbucks have positioned themselves well in terms of their relationships with their supply and distribution channels. Through their strategy of "first mover advantage" in the market, Starbucks have built key relationships with fair trade coffee suppliers, and have also ensured they stores in key locations (Johnson et al.2008:101). This monopoly on access to suppliers as well as key store locations, limits the threat of new entrants in this sector.

2.2.2. The threat of substitutes
A key substitute to Starbucks coffee, at a product level, would be any other alternative caffeine beverage. Some of the key alternatives would be tea and energy drinks. Starbucks have diversified their product range by including bottled energy drinks and tea beverages within their product so as to give their customers a greater value added choice ( On the back of the

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