Starbucks: What Makes Them Different From Other Brands

Starbucks Corporation, an American company founded in 1971 in Seattle. Product mix includes roasted and handcrafted high quality/premium priced coffees, tea, a variety of fresh food items and other beverages. They primarily operate and compete in the retail coffee and snacks store industry. Starbucks and Dunkin Brands make up more than 60% of the market share. Their core competence has been their ability to effectively leverage their cornerstone product differentiation strategies by offering a premium product mix of high quality beverages and snacks.

What makes them different from other 1000 of existing brands is the brand equity they have built on selling the finest quality coffee and related products, and by providing each customer a unique “Starbucks Experience” therefore providing customers with the best hospitality and the ambience it provides to its customers.

1. What main internal features/ strengths (sets of activities or resources/capabilities) is Starbucks’ competitive advantage built on?

Ans. Being a coffee manufacturer or a retailer with a very innovative store is not a very difficult in today’s scenario.

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But what competitive advantage Starbucks own over its other competitors are very diversified.

Firstly the supply chain management it follows, which helps company to get finest quality of coffee seeds from global suppliers at a most effective price. Secondly the brand image it has created over the period of time, which makes it a luxurious brand, which customers wants to not miss on. Also the cross relation it holds within the business.

When talking about Starbucks we cant just call it a coffee shop, because they are a experience store where they provide you with a third place experience, a place away from work And home where people can relax and gather ideas.

They also holds a edge when it comes to integration of technologies with Lastly, the global positioning advantage which it holds, they have their presence across the globe with the different blends of different culture involved in it. This positions them at a point where others are not even close to them when compared in global scenario. This are the competitive advantage which Starbucks has built on over the years, as compared to its other competitors across the globe.

2. What barriers to imitation (or replication) exist that will ensure that Starbucks’ competitive advantage will be sustained in the long run?

1. Ans. It’s not easy to be a globally recognized brand without the competitors who are there to replicate your each and every move. But still the barriers which exists and ensure that Starbucks advantage is sustained over the long run are –
2. First and the most important thing which makes any company different is the brand image it has. Starbucks has successfully established that which can’t be replicated in near future.
3. As 60% of market share is with Starbucks, threat to entre in the new market and sustain is very difficult. As they have attained economies of scale and matching their pricing is little difficult.
4. Customer loyalty that Starbuck has is truly significant, which creates a very less chance for any other entrant to make a turnaround.
5. They also have a larger scale and scope, giving them advantage and favorable access to raw material with the relationship they build with their suppliers.
6. Initial investment needed to entre in a quality market is always difficult.
7. Lastly, the global portfolio they hold, which helps them absorb shocks of some places, as happened in case of Australia.
8. These were the imitation that will ensure market sustainability of Starbucks.