Strategy Clock: Starbucks

Topics: Coffee, Starbucks, Coffea arabica Pages: 3 (819 words) Published: April 16, 2006
In 1970s, the first Starbucks coffee shop opened. After 30s years developed, Starbucks Coffee Company become the leading retailer, roaster and brand of specialty coffee and owned more than 5000 coffee shops all over the world. Why Starbucks can work so successfully? I will analyze Starbucks and its strategies with the 'Strategy Clock'.

The 'Strategy Clock' is based on the work of Bowman. It's a suitable way to analyze a company's competitive position in comparison to the offerings of competitors. As with Porter's Generic Strategies, Bowman considers competitive advantage in relation to cost advantage or differentiation advantage.

It included:
Route 1 is the ¡¥no frills¡¦ strategy, which combines a low price, low perceived product/service benefits and focus on price-sensitive market segment.

Route 2, the low-price strategy, seeks to achieve a lower price than competitors whilst trying to maintain similar product/service benefits to those offered by competitor

Route 3 is the hybrid strategy, which seeks simultaneously achieving differentiation and a price lower than competitors

Route 4 is a broad differentiation strategy which seeks to provide product or service that offer benefits different from competitors and that are widely valued by buyers. The aim is to achieve advantage by offering better products or services at same or higher price.

Route 5 is a focused differentiation strategy seeks to provide high perceived product/service benefits justifying a substantial price premium, usually to selected market segment. In many markets there are described as premium products and are usually heavily branded.

A failure strategy is one which does not provide perceived value-for-money in terms of product features, price or both.

In my opinions, the position of Starbucks is between a broad differentiation strategy and a focused differentiation strategy.

As we¡¦ll see, Starbucks¡¦ product development is guided by its ¡§positioning¡¨ strategy....
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