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Starbucks International Operations: Case Study
SWOT shows that Starbuck successfully identifies the main advantages and threats of correct market position and companys operations. The strengths of Starbuck are its strong brand image and expert system, excellent website, and customer support. Resource-based philosophy and innovations create new opportunities for market development and brand recognition. Customers loyalty can be achieved through the people who are employed by Starbuck. Innovations in technology and bakery processes allow Starbuck to attract millions of customers each day. Technological factors involve the Internet access and development of the companys infrastructure, new methods of cooking, and information availability. Such factors as continued economic growth, increased disposable profits, dynamic domestic and local competition, accelerating technology, automation, population decentralization, expansion, and innovation will spur the appearance of this new marketing form. The competitive advantage of the company is its unique product proposition and location. Low prices and high quality of products appeal to middle-class consumers.
For Starbuck, the opportunities include the high potential to grow in America and penetration into European markets. Also, the company has financial and human resources in improving its profitability, professional management team, and corporate culture, customized order system, and free shipping. There is a great opportunity for Starbuck, because specialized restaurants, throughout the world, are interested in goods produced in an environmentally friendly manner. The company tries to expand its activities by introducing self-service, limited-menu express (Wheelen and Hunger 2008).
The main weaknesses are fierce competition in the food industry and the limitability of the proposed products. Competition is the main threat for Starbuck. In spite of weaknesses and threats, Starbuck has an attractive position based on a combination of cost management and customer services. In recent months, the economic situation and crisis have harmed the company as many potential customers try to save money and prefer to cook at home. Some of the repeat customers prefer to buy cheap food and visit the restaurants seldom
Both in physical appearance and in most aspects of their culture-notably, their language, their traditional form of administration, and their religion. It is the northern half of America, and, in spite of provisions for moving refugees to the south, this distinction is not likely to disappear entirely. The problem is that volume size does not significantly change the cost base. Competitors provide commodities with little differentiation and customer loyalty is low. In addition, high inventory costs and competence barriers prevent many companies to enter this market. Starbuck relies heavily on high-quality products and on-time delivery. Starbuck, suppliers have a unique availability product they can exert a strong influence over prices and conditions of supply, therefore potentially putting pressures on the businesses purchasing their product. as the most important, there is a limited number of suppliers in this industry. Competitors follow the same strategies as Starbuck, relying on product differentiation and cost leadership.
The core strategy of Starbuck will be based on value propositions and product differentiation is well developed. The main strength of this strategy is the clear identification of the product advantages and potential target audience. This strategy will result in a plan that can assist the company in selecting and positioning the product. A greater product differentiation strategy will help Starbuck to create entry barriers for other companies and creates a unique market proposition. New customers will become loyal supporters of the brand if they receive unique products and exceptional service at Starbucks stores.
References
Wheelen, T.L. & Hunger, J.D. (2008), Strategic Management and Business Policy, (11th ed), Prentice Hall.
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