The business-level strategy of Starbucks

Starbucks utilizes a business-level strategy of differentiation. Differentiation refers to the integration of actions taken by an organization to produce goods and services that the customers perceive to be different in ways that are essential to them. Starbucks uses this strategy as an effective way to offset industry forces through the production of unique products that provide exclusive experiences at an equivalent price. The company sells not only coffee but the “Starbucks experience” or rather a “third place experience” where people can meet up and chat as they sip a cup of coffee (Larimore, 2013). The experience refers to the uniqueness of a comfortable area between home and work, which is not just meant to be a coffee shop.

Distinctive experiences drive customers to be more willing to pay more to the company. The company also differentiates itself from the rest through heavy distribution. Starbuck stores are located at convenient locations such as high-traffic areas, and residential areas. Schools, airports, and shopping centers. The elegant interior of the stores makes it comfortable for customers. The shops are quiet and peaceful, which allows the customers to chat with each other. Also, the company provides a variety of products, such as tea and Frappuccino (Larimore, 2013).

Excellent service delivery through well-trained staff is also an aspect that differentiates it from its competitors.

To improve the differentiation strategy, Starbucks has to be innovative. This is because other restaurants are trying to imitate some of their differentiation aspects, such as store layout and designs. Innovation may help the company stay at the top to ensure the customers get more unique products and services. Customer trends may also change due to market saturation and economic crises, so Starbucks needs to change to a cost leadership strategy.

Reference

Larimore, R. (2013). Starbucks CEO Howard Schultz Got the World Hooked on Lattes. Here’s How. Retrieved 29 July 2020, from https://slate.com/business/2013/10/starbucks-business-strategy-how-ceo-howard-schultz-conquered-the-world.html

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The business-level strategy of Starbucks

Evaluate the business-level strategy of Starbucks to determine whether you believe the strategy is appropriate to offset forces in the industry. Provide specific examples to support your response.

Make recommendations for improving this strategy and describe any challenges you foresee in executing those recommendations. Provide specific examples to support your response.