Starbucks Strategic Management Case
PLEÑOS, ZAIDA CARMINA F. JULY 9, 2013
BSBA – DM:ME 5 MARK32 10:30-12:00TTH
STARBUCKS COFFEE: A MULTICHANNEL STRATEGY
1.) What type of channel strategy is Starbucks currently employing? How does this channel strategy fit with Starbucks’ products and positioning?
Starbucks’ channel strategy was evident when it chose to expand using company-owned stores rather than initially turned down lucrative franchising agreements. This is to ensure the consistency of the quality of their products. However, when Starbucks decided to move into international markets, it utilized licensing agreements with local partners in addition to having company-owned stores. They had to depart from their previous strategy but obviously it was a good move for Starbucks because it helped the company expand its distribution channel. Starbucks coffee bars and products can now be seen in many commercial places like airports, hotels, mall, and grocery stores. Another unique approach to distributing the product is developing special coffee blends for others.
The channel strategies were effective to Starbucks even though there were slight shifts of their decisions. This is because they go along with how Starbucks differentiated themselves in the first place. They standardized their products and services very carefully to maintain quality which is a common factor to be sacrificed in expanding. The company established itself to deliver “The Starbucks Experience” that others cannot imitate and impossibly fully copy.
2.) What is Starbucks’ competitive advantage? Discuss whether you think this is a sustainable competitive advantage.
Competitive advantage is surely in effect when consumers want your products and services more than your competitors. In a customer’s eyes, products and services from different competitors never have the same value and always go for the one that delivers more. In Starbucks’ case, they are pretty much distinct form other coffee shops because they
BSBA – DM:ME 5 MARK32 10:30-12:00TTH
STARBUCKS COFFEE: A MULTICHANNEL STRATEGY
1.) What type of channel strategy is Starbucks currently employing? How does this channel strategy fit with Starbucks’ products and positioning?
Starbucks’ channel strategy was evident when it chose to expand using company-owned stores rather than initially turned down lucrative franchising agreements. This is to ensure the consistency of the quality of their products. However, when Starbucks decided to move into international markets, it utilized licensing agreements with local partners in addition to having company-owned stores. They had to depart from their previous strategy but obviously it was a good move for Starbucks because it helped the company expand its distribution channel. Starbucks coffee bars and products can now be seen in many commercial places like airports, hotels, mall, and grocery stores. Another unique approach to distributing the product is developing special coffee blends for others.
The channel strategies were effective to Starbucks even though there were slight shifts of their decisions. This is because they go along with how Starbucks differentiated themselves in the first place. They standardized their products and services very carefully to maintain quality which is a common factor to be sacrificed in expanding. The company established itself to deliver “The Starbucks Experience” that others cannot imitate and impossibly fully copy.
2.) What is Starbucks’ competitive advantage? Discuss whether you think this is a sustainable competitive advantage.
Competitive advantage is surely in effect when consumers want your products and services more than your competitors. In a customer’s eyes, products and services from different competitors never have the same value and always go for the one that delivers more. In Starbucks’ case, they are pretty much distinct form other coffee shops because they