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Schultz created a “third place”, among home and work, that people could come, relax and socialize. His prototype was the coffee shops he saw in Italy and he wanted create the same culture in United States. Also, at the time, coffee consumption was declining, so this was a quite radical idea. The goal was to create a coffee culture, offering people a variety of quailty coffees in a friendly and sociable environment. The service was also very important. They needed to combine this coffee culture with great service in oder to achieve high customer satisfaction. To do this, they gave a lot of importance to the employers, which were called partners. Starbucks knew they first needed to satisfy the employees, so that the employees could satisfy the customers, so they created a good working environment and offered good salaries with insurance. They trained the employees not only on things like how to fix the drinks, or how to use the register, but they also trained them on how to connect with the customer. This way, they achieved a low rate of employee tornover, as well as a high rate of customer satisfaction. Starbucks does have a sustainable competitive advantage because it created a strong brand name and have a good quality reputation. Starbucks is the biggest and most well known company in its industry, and this creates a huge advantage over its competitors. They also maintain high quailty in their products and have a close connection to their customers. But one mistake they made was not to differentiate their image or products from their competitors. Differentiation is one of the biggest challenges that service companies face and is very important for achieving a sustainable competitive strategy. The company should have created an image and offered products that could not be easily adopted by the competitor. Starbucks couldn’t do this. Although their strong brand name is also an important component of their competitive advantage, the resemblance of...
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