The business-level strategy of Starbucks

Starbucks employs a business-level differentiation strategy. Differentiation is the combination of strategies a company uses to provide products and services that clients perceive as distinct in ways that are important to them. Starbucks employs this tactic as a powerful tool to counter industry forces by creating distinctive items that offer premium experiences for a comparable price. In addition to selling coffee, the corporation also sells the “Starbucks experience”, or rather a “third place experience,” which allows customers to meet and converse while enjoying a cup of coffee (Larimore, 2013). The experience refers to the distinctiveness of a cosy setting that is not merely supposed to be a coffee shop halfway between home and work.

Customers are more inclined to give the business more money when they have a unique experience. The business sets itself out from the competition by using extensive distribution. Busy streets and residential neighbourhoods are the best places to find a Starbucks: airports, shopping malls, and schools. Customers can feel at ease in the stores because of their elegant interiors. Customers can talk to one another in the shops since they are calm and quiet. Additionally, the business offers a wide range of goods, including tea and Frappuccino (Larimore, 2013).

Another feature that sets it apart from its rivals is the excellent service delivery a skilled workforce provides.

Starbucks needs to be creative to enhance its differentiating approach. This is because other restaurants are attempting to copy some of their distinguishing features, such as the layout and designs of their stores. The business may offer its clients more distinctive goods and services by staying competitive. Market saturation and economic crises may also shift consumer habits. Therefore, Starbucks needs to switch 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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Question

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.

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