Starbucks

Question Three

In this section, I will choose McDonalds Company which is seen as one of Starbucks fierce rivals alongside Dunkin’ Donuts. McDonald’s is a fast-food company based in the United States. The company has various branches globally in different countries. McDonald’s has been seen to sell various menus such as chicken and sandwiches, burger, drinks, sauces, bacon, and cakes (Schmid & Gombert, 2018). It has been seen that the entire McDonald’s menu is affordable and delicious. Therefore, these affordable prices are reasonably priced for everyone. With over 30,000 restaurants in 118 countries in the world, McDonald’s serves up to 46 million customers each day (Schmid & Gombert, 2018). McDonald’s is therefore globally known and holds a leading share in the world’s branded quick-service restaurant segment of the informal eating-out market in various countries.

When comparing the competitive environment, it is seen that Starbucks has inserted itself into the American urban culture more quickly than any other retailer in the US history. With this approach, the company has transformed the market industry. For instance, the company has been able to correctly define the right market segmentation. Here, Starbucks has stayed on top of the competition by competing on comfort rather than convenience as seen in its rivals like McDonald’s and Dunkin Donuts.

Additionally, Starbucks has over the years continued to base its focus in providing original products varieties that includes quality service, nice environments, and good coffee. This execution by Starbuck is also one of the competitive environment strategies that has helped the company stay on top of the competition (Voigt, Buliga, & Michl, 2016). Moreover, the management at Starbucks is superb in that they have one of the best leadership qualities. Howard Schultz, the company co-founder, has over the years continued to come up with innovative products. This has helped the company expand its product portfolio.

Starbucks has also expanded in the Chinese market. With China being the most populous countries with 1.4 billion residents, this was a major move for Starbucks. Most of the Chinese population are young hence there is a strong demand for Starbucks products. Currently, Starbucks has over 1,400 stores in China (Voigt, Buliga, & Michl, 2016).

Since its inception in 1940, McDonald’s has continued to supply a fast food and inexpensive menu. In 1990, McDonald’s transformed its corporate image by launching the “Fast and Convenient” brand. This involved a radical adjustment in the firm’s product portfolio to emerging market trends in the food industry (Mathur, n.d). After going through several difficult years, McDonald’s began turning things around. Today, the McDonald’s is more responsive to its customers and to the marketplace. In 2003, the company initiation a strategy dubbed “Plan to Win.” The company remodeled its stores, from a molded plastic booth to a brightly colored larger buildings having internet installed. In 2007, McDonald’s Coffee was rated better tasting than Starbucks by the Consumer Reports magazine.

In my opinion, I believe that Starbucks will be the most successful company for the long term. In the food and beverage industry, the economy is ever changing. It is seen that the various attempts of McDonald’s to outdo Starbucks in the market led to its own challenges. In fact, it may appear that McDonald’s attempts to outshine Starbucks have awoken the slumbering giant. Instead, McDonald’s will first need to get over its challenges before it can pose a threat to Starbucks. Additionally, it is seen that McDonald’s is a franchise while Starbucks is company owned. Therefore, franchises could be inconsistent in one area with which company owned Starbucks has more control over. Therefore, I would wager Starbuck to take advantage of surviving the most competitive environment.

Question Four

In this section, it is seen Starbuck is one of the firms that has prevented the imitation and copying of it brands and products without permission. This offers them a competitive advantage especially in the slow cycle markets. I therefore believe the Starbucks Corporation can be able to survive these cycle markets, be it slow or fast. Under the slow cycle markets, the company is observed to integrate the use of slow cycle alliances so that they can penetrate new markets and the markets that they are prevented from reaching (Nair & Weber, 2015). With this approach, the firm is able to improve its ability to successfully compete with its rivals in the global market.

To enhance it competitive advantage, Starbucks is seen to utilize its corporative strategy effectively (Nair & Weber, 2015). This strategy has been employed in that the employees at the company are able to be motivated and hence maintaining their jobs for the long term. Therefore, in slow cycle markets, Starbucks strategy is significant in that helps the company stabilize well hence ensuring long term success.

Consequently, the company is also able to survive in the fast cycle markets. Fast cycle markets are seen as being unpredictable, complex, and unstable. This market actually provides Starbucks with real competition. However, with the versatility present at Starbucks, it is seen that the company can be able to survive in any environment regardless of the present challenges. The company can be able to integrate new competitive advantages by differentiating its products to compete favorably with rivals such as McDonald’s and Dunkin Donut (Mathur, n.d). Additionally, the company is creating high customer experience by ensuring that its restaurants are well connected to the internet. This ensures the customers are connected to the internet and at the same time enjoying their coffee.

Starbucks has been seen to link up with some of its rival companies in the industry. For instance, it is seen that Starbucks has partnered with Keurig Coffee to buy certain products that are in demand. This is important to the company in that it is able to become successful even in the fast cycle markets.

Conclusion

Starbucks Company being one of the largest coffee houses globally, has been able to realize several instances of success over the years. With its superb leadership, the company has seen to accelerate its product development and penetrated new markets, hence overcoming competition. Moreover, Starbucks believes that it has a duty that corporations in the world today have a mandate to help people realize their dreams as Starbucks philosophy is to help citizens realize the American Dream.

References

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Mason, A., Cole, T., & Goza, N. (2017). STARBUCKS: A CASE STUDY OF EFFECTIVE MANAGEMENT IN THE COFFEE INDUSTRY. Journal of International Management Studies, 17(1), 43-48. doi:10.18374/jims-17-1.4

Mathur, S. (n.d.). Glocalization in Fast Food Chains Glocalization in Fast Food Chains. Strategic Marketing Management and Tactics in the Service Industry, 330-347. doi:10.4018/978-1-5225-2475-5.ch013

Nair, A., & Weber, T. (2015). borjo coffeehouse: Franchise, Independence, and Starbucks. Entrepreneurship Theory and Practice, 41(5), 861-875. doi:10.1111/etap.12215

Schmid, S., & Gombert, A. (2018). McDonald’s: Is the Fast Food Icon Reaching the Limits of Growth? MIR Series in International Business, 155-171. doi:10.1007/978-3-319-74089-8_7

Voigt, K., Buliga, O., & Michl, K. (2016). Globalizing Coffee Culture: The Case of Starbucks. Management for Professionals, 41-53. doi:10.1007/978-3-319-38845-8_5