Competitive Advantage of Starbucks

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Attaining Competitive Advantage

Attaining competitive advantage is at the center of successful multinational corporations. Starbucks, an American coffee corporation and coffee chain founded in 1971 with 28,218 outlets worldwide is an example of such multinational corporations (Harding, 2017). The enterprise has specialized in hand-made coffee founded on lighter roasts that are offered on automated espresso machines. Starbucks’ differentiation strategy is based on four pillars: offering “third-place” experience, focus on emerging markets, integrated technology, and high-quality coffee sales.

Starbucks' Competitive Edge

Starbucks’ ability to offer authentic high-quality handmade coffee offered with tailored customer service has been its biggest competitive advantage. The firm’s endeavor to diversify into other food related products such as soy-milk and almond-milk has ensured that it retains a competitive edge in the coffee and beverage market, making it prosper even where its rivals have failed (Lasswell, 2007). However, it is the company’s all-round approach to business operations that can guarantee it sustainable advantage over its long-term competitors. Starbucks has positioned its market niche on the number of coffee lovers who have never been satisfied by the available choices and who are looking for a naturally processed and authentic beverage (Mohammed, 2018). The firm believes in having a positive impact on the communities it serves as well as on the environment in which it operates.

Environmental and Community Focus

Regarding the environment, Starbucks believes in finding ways to minimize environmental footprint, inspiring others to act, and tackling climate change. On the other hand, Starbucks seeks to unite people and create positive changes where possible towards improving the community (Starbucks, 2018). According to Hannagan (2013), using a collective-approach results in continuous value addition.

Preserving Competitive Edge

The combination of the approaches above has ensured that Starbucks continue to dominate the coffee market in the US and parts of Europe. The focus on its interior capabilities and on those resources it has control over has ensured that it preserves its competitive edge even in the face of rapid technological advances.

References

Hannagan, T. (2012). Mastering strategic management, Saylor Academy. Retrieved from    https://saylordotorg.github.io/text_mastering-strategic-management/s06-01-vision- mission-and-goals.html

Harding, V. V. (2017). The Starbucks Effect. Boston: Harvard Business School. Retrieved from

https://mail.google.com/mail/u/1/#inbox/FMfcgxvzLhZWVjLqPzHTDqvvzTwhbgSC

Lasswell, M. (December 28, 2007). War and Wharton, Starbucks and Peanuts. Wall Street

Journal: Retrieved from

http://online.wsj.com/article/SB119880610980954525.html

Mohammed, S. (2018). How did Starbucks build its sustainable competitive advantage? The

Medium. Retrieved from https://medium.com/@shahmm/how-did-starbucks-build-its-sustainable-competitive-advantage-79ff5eedb5ff

Starbucks. (2018). Starbucks’ Social Responsibility and Sustainability. Starbucks Corporation.    Retrieved from https://www.starbucks.ca/responsibility

October 24, 2023
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