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Starbucks Analysis

Yuanqing Wang

Westcliff University

BUS 525

01/17/2021

Introduction

Starbucks Corporation is an American global chain of roastery and coffeehouse reserves located in Seattle, Washington. It is the biggest coffeehouse chain globally and operates in more than 30,000 locations in more than seventy countries. Starbucks was founded in 1971 by Gordon Bowker, Zev Siegl, and Jerry Baldwin, and the current CEO is Kevin Johnson (Sakal, 2018). Its products range from smoothies, tea, coffee beverages, backed products to sandwiches. Starbucks is a globally recognized brand and has entered the major markets, therefore, contributing to its industrial position. The paper, therefore, seeks to analyze Starbucks Corporation.

The competitive advantages that Starbucks seeks to establish and the main challenges it faces as it tries to maintain those advantages.

One of the primary competitive advantages that Starbucks seeks to establish and maintain is a strong brand image. It is the corporation's most prominent competitive advantage that helps it gain competition over the rivals and be the leading company in the industry. Starbucks possesses its current position in the industry due to its loyal customers and high customer base as a result of its strong brand image (Morgan & Bancorp, n.d). Therefore, it seeks to establish and maintain its strong image to occupy a sustainable position in the industry.

Building or maintaining a strong brand image requires effort, resources, and time. One of Starbucks's challenges to maintain its brand image is building a loyal and broad customer base. It continuously invests heavily in innovation to develop high quality and differentiated products to satisfy and keep its customers. Starbucks also invests in research to determine the changes in customers' experience and preferences and adjust accordingly to create a high satisfaction level.

The second competitive advantage that Starbucks seeks to establish and maintain is superior customer service. Starbucks seeks to provide a connected customer experience mainly to build and maintain long term relationship with its customers. More than delivering coffee, the company offers a "Starbucks Experience" that makes customers feel at home; therefore, building strong emotional attachment (Morgan & Bancorp, n.d). The company believes that employees are a primary factor in maintaining superior customer services; therefore, it offers multiple benefits to initiate satisfaction.

One of Starbucks's primary challenges based on maintaining superior customer service is understanding customers' expectations and exceeding them. Starbucks operates in many locations globally, and each has different customers. Studying every customer in each area, determining their needs and expectation, and surpassing them requires extensive effort, time, and resources.

Starbucks Capabilities and whether any of them is considered as a core competence.

Starbucks possesses various capabilities; one of them is substantial brand equity. It is an advantage that differentiates a brand from the other and essential in attaining a competitive advantage. Starbuck is a customer-centric brand and has gained high customer trust (Mayer, 2018). The high customer focus is the reason for the substantial brand equity, resulting in high demand and customer loyalty.

The second capability is the extensive global presence. Starbucks has more than 30,000 stores in more than 70 countries. The extensive worldwide presence contributes to its high revenues and customer base, which gives it an advantage over rivals. It has more and big stores in America, the Middle East, and Asia, which targets many audiences.

Besides, Starbucks’ other capability is superior customer service. It is a customer-centric brand and therefore seeks to offer outstanding customer service. Starbucks provides a high customer experience to build long-term customer relations, retain more customers, and build strong loyalty. Customer service is one of the essential methods that Starbucks uses to market its brand. Besides empowering customers, Starbuck also offers training and other benefits to employees to provide the best customer experience.

The final capability is high customer loyalty. Starbucks invests extensively to obtain customer loyalty as it contributes to increased profitability and competitive advantage. Increased customer loyalty relates to its customer-centric strategy, high quality, and customer service.

Three of the above-discussed capabilities are considered key competencies of Starbucks. One of them is substantial global brand equity as it contributes to its success and competitive position. Starbucks has been a successful company because of its customer-centric strategy and high customer trust (Sakal, 2018). Secondly is superior customer service. Starbucks offers high customer service and thrives on building long-lasting relationships with them. The "Starbucks Experience" initiates customers to have an inseparable attachment with the company due to their potential to exceed their expectations.

The final capability considered as a critical competence is high customer loyalty. Starbucks focuses extensively on customers as it believes it is the primary factor to gain competitive advantage (Mayer, 2018). The high customer loyalty reduces the chances of customers switching to the rivals' products, giving Starbucks an added advantage.

Recommendation on the actions Starbucks can take to attain its mission

Starbucks' mission "to inspire and nature the human spirit-one person, one cup and one neighborhood at a time" mainly reflects what the company does to maintain the business. It captures employees, customers and the surrounding (Hess, n.d). One of the action that Starbucks can take to reach this mission is to increase its investment in customers by conducting customers' research to determine their change in preferences and expectations. It can also extensively involve customers in their production and innovation by considering their experience in every product.

Starbucks can also enhance its organizational culture to include aspects like togetherness, hospitality, rapport, and superior service to reach its mission. Besides, since it already offers benefits and training to employees, it can increase their involvement in the decision making process by seeking their opinions on the necessary changes the organization can make to attain the mission.

Whether Kevin Johnson, the CEO, is a strategic leader and recommendations to him regarding strategic management challenges he is facing.

A strategic leader has the potential to express an organization’s strategic vision, motivate and persuade the team to obtain it. A strategic leader weighs different options and positions a company for growth by taking action (Samimi et al., 2020). Kevin Johnson is a strategic leader because since being appointed the CEO, he has taken active roles and has been a driver towards the company's success. He is vision-oriented and involves all the team in the achievement of the organization's objectives. Besides, he has excellent people skills, has a deep concern for employees, and often open to making changes in the organization to attain success and stability (Gino, Coffman & Huizinga, 2019).

One of the recommendations to the CEO is that he should make the organization's strategic goals and objectives know to all the employees and involve them more in the organization's operations and practices. Secondly, he should increase the monitoring and control level in the organization to ensure that all functions are accomplished on time and in the manner needed.

Conclusion

In conclusion, Starbucks Corporation is the global largest coffee house chain. It has substantial brand equity globally and serves more than 70 countries. The two primary competitive advantages that Starbucks seeks to establish are a strong brand image and superior customer service as they contribute extensively to its success. Starbucks' capabilities include substantial brand equity, customer loyalty, extensive global presence, and outstanding customer service. Besides, it has a strategic CEO who is vision-oriented and aims to achieve success through employees' involvement.

References

Gino, F., Coffman, K. B., & Huizinga, J. (2019). Starbucks: Reaffirming Commitment to the Third Place Ideal.

Hess, E. Starbucks Corporation (a).

Mayer, N. (2018). Starbucks Corporation.

Morgan, B. M. L. C. J., & Bancorp, M. S. U. Starbucks Corporation.

Sakal, D. V. (2018). Company Analysis of Starbucks Corporation.

Samimi, M., Cortes, A. F., Anderson, M. H., & Herrmann, P. (2020). What is strategic leadership? Developing a framework for future research. The Leadership Quarterly, 101353.