International Strategies of Starbucks Company

Starbucks competitive strategies

Starbucks Corporation earns above average returns because it found unique ways to differentiate and deliver superior food value to its clients. Starbucks gained competitive advantage in the entire ready to drink coffee industry through the inimitable market strategies (Aaker, 2012). These include the appealing store ambiance, superior client services, flavorful coffee drinks and convenient locations that make it to stand out amongst other market competitors that sell coffee.

Through selecting unique differentiation strategies to offer superior value to the clients while determined to attain operative excellence, Starbucks is able to achieve long-term brand-loyalty. This rather makes it very hard for other competing companies to succeed by just replicating Starbucks strategic international market approach (Welsh, Raven & Al-Mutair, 1998).

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Indeed, the strategies dubbed as “Me Too” as applied by other corporations can hardly be anticipated to provide stellar performances and competitive advantage lest the copycats possess competencies and resources which allow them to offer superior values to the clients.

It is via the unique differentiation strategy that Starbucks has managed to proffer a wide range of valued and unique products to the clients. The pace at which Starbucks fared its market ascension materialized to be as incredible as the alterations the corporation designed in the customary brand marketing outset.

The company is renowned to take the global oldest products and modify them into differentiated, value laden and lasting brands. Besides, most Starbucks products are differentiated to attract low costs which further offer a source of potential and sustainable competitive advantage to the company.

At the international markets, the low cost of producing the imitable differentiated products makes Starbucks to overcome the external environmental changes (Biederman, 2005). The differentiated products are difficult to replicate because they are of; unusual positive brand image, based on technological capability, innovative design, extraordinary service and exceptionally high quality. These clearly validate the premium prices charged on each coffee cup which surpasses the differentiation costs.

Starbucks corporate strategy

Starbucks corporate strategy appertains to the maximization of market penetration, creation of great networking environments, realization of profitability while offering high quality products and providing socially attractive and relaxing environment. When Starbucks became public, merely one hundred and sixty five stores surrounded Seattle and its environs.

The company has however exceeded the targeted one hundred thousand store outlets globally. The acknowledged business model for this corporation was to spread out its outlets in a given region and saturate the market in order to maintain profit margins (Kaplan & Woznicki, 1999).

The supply chain retail outlets are strategically located and focused on increasing Starbucks foot traffics in a particular area. Rather than being worried that the new stores would eat up each one’s business space and market share, the corporation aimed at cutting down the management times and the corporation’s delivery while shortening the waiting queues for clients at all stores.

This optimistically increased the overall clients’ traffic. Despite being risky, the corporate strategy adopted by Starbucks paid off because the regionally clustered stores helped the corporation to rapidly gain global market dominance (Theodore, 2002).

Starbucks corporate strategy neglects the excessive use of the generated revenues to advertise its products. Most marketing are carried by word of mouth ads. Besides crowding its retail outlets, the company follows smart joint business ventures with companies deemed to be right while rolling out novel and fresh initiatives like newfangled product lines (Taylor, 2011).

Global marketing mix strategy

Starbucks hardly markets its products using posters, newspapers, ad spaces or billboards as is apparent with other global corporations such as McDonalds (Talpau & Boscor, 2011). In fact, Starbucks does not just employ unconventional marketing strategies merely for fun.

The marketing mix strategy perfectly matches the concept Starbucks yearned to exhibit (Perera et al., 2009). To display its current incredible level of success, the company uses strategic marketing techniques that have attracted millions of individuals globally and these are as subsequently outlined.

Clients’ satisfaction: With Starbucks, client satisfaction is considered very essential. Starting from entering the retail stores to the latter coffee drip, it is clear that clients have a sensation of distinctiveness as they consume coffees made Starbucks Corporation. Undeniable, coffees from Starbucks Corporation provides every reason why client servicing is essential (Talpau & Boscor, 2011).

Brand marketing: The marketing mix approach for Starbucks often centers on the word-of-mouth ads. This technique lets the Starbucks high quality services and products to express and market themselves. The company has been very successful based on this viral marketing strategy which allows clients to admit that Starbucks makes its own brands and runs the market with them (Taylor, 2011).

Perfect and innovative coffee cups: The history of Starbucks clear depicts that the company places more weight on the quality of products offered. While the coffees tendered are a bit more dear than anticipated, Starbucks coffees are famous for quenching the client thirst with their appealing, rich scent and flavor.

The coffee cups comprise of innovative and creative ideas that add value to Starbucks services and products. Through innovation, Starbucks has managed to add different aromas to its coffees, additional foodstuffs to its menu besides becoming first in offering internet capabilities in its retail stores (Weber, 2005).

Third place: Since its inauguration, the marketing mix plan for this corporation has been tailored towards the creation of third-place for each client going amid homestead and workplace. The creation of such a calming and distinctive atmosphere and experience for individuals and groups materializes to be very important for this corporation as it is the resilient model that Starbucks has used to strongly attract and retain most of its customers.

Smart partnerships and the creation of Starbucks communities: This Corporation is recognized for its strategic creation of partnerships. This implies that to increase its global market dominance, the smart business partners that Starbucks has formed helps it to augment its annual sales.

Furthermore, the marketing approach adopted by Starbucks has been extended to produce a community about its various coffee products. For instance, people have been fortified to give their views and experiences as regards to the history of Starbucks on this company’s website. The company has been part and parcel of such discussions (Talpau & Boscor, 2011).

Starbucks international expansion

Before expanding its business into any new country, Starbucks ideally conducts meticulous quantitative market studies. The company develops extensive focused group interviews to obtain a pulse of the market and its potentiality.

After realizing that even big companies cannot fill the new market gaps unaided in serving the demands of its target market, Starbucks resorts into seeking the help of another company or entrepreneur with whom it can work and share the financial risks (Taylor, 2011). Starbucks strategic partners helps it penetrate into new markets, keep abreast with the technological innovation advancements, achieve objectives and amicably obtain the services and products available in those markets very quickly.

To realize its global business expansion missions, Starbucks ensures that it selects local business partners who are ideal business leaders. Thereafter, Starbucks jointly with its strategic partner tries to acclimatize its business traditions to that local market.

It is also evident that Starbucks attachment to the internationalization business process varies in the mode of licensing, wholly owned subsidiary and joint-ventures. This is because Starbucks is persistently informed with operators to stay abreast of the lucrative marketplaces (Holmes et al., 2003).

This is implies that, the strategic choices that Starbucks has to make while expanding into the international markets are in line with the consideration of the international business partners. The company seeks to ensure that its local partners will positively share its commitments and values into bringing the Starbucks experience to the global clients.

Therefore, the strategic choices may include: partners who share its corporate culture and value; partners with strategic fits to Starbucks business; local business leaders; individual with premium brands and concepts as well as experience in managing license. Such strategic market choices are made because Starbucks believes that the success of any company is based on conducting ethical business and striving to execute all that is vital to accomplish the client demands (Aaker, 2012).

Starbucks market opportunities in India and Middle East

Both India and Middle East appear to be emerging markets for Starbucks products. For instance, India is densely populated and the younger Indian generations and the classy individuals from Middle East always look for cool and relaxing places to study and meet friends.

The wider market base, the financial potentiality of these people and the availability of potential business partners in both India and Middle East provides lucrative business opportunities for Starbucks to expand its global market operation to these regions. These factors are critical in upholding the success rate that Starbucks currently enjoys (Taylor, 2011).

References

Aaker, D. (2012). Remove Negatives to Remain Relevant. Marketing News, 46(1), 14-14.

Biederman, P. S. (2005). Commentary on Expo Fling a North American Concept to Asia: Starbucks in China. Cornell Hotel and Restaurant Administration Quarterly, 46(2), 288-290.

Holmes, S., Kunii, I. M., Ewing, J. & Capell, K. (2003). For Starbucks, There’s no Place Like Home. BusinessWeek, 3836, 48-49.

Kaplan, D. A. & Woznicki, K. (1999). Trouble Brewing. Newsweek, 134(3), 40.

Perera, L. C., Kerr, R. B., Kimura, H. L. & Lima, F. G. (2009). Case Study: Starbucks- Adding Value to Brand Equity through an Innovative Brand Image. Journal of the Academy of Business & Economics, 9(4), 174-185.

Talpau, A. & Boscor, D. (2011). Customer-Oriented Marketing – A Strategy that Guarantees Success: Starbucks and Mcdonald’s. Bulletin of the Transilvania University of Brasov. Series V: Economic Sciences, 4(1), 51-58.

Taylor, D. (2011). Siren’s call: Is Starbucks Steering its Brand Identity onto the Rocks? Central Penn Business Journal, 27(3), 13-13.

Theodore, S. (2002). Expanding the Coffee Experience. Beverage Industry, 93(10), 56.

Weber, G. (2005). Preserving the Counter Culture. Workforce Management, 84(2), 28-34.

Welsh, D. H., Raven, P. & Al-Mutair, N. (1998). Starbucks International Enters Kuwait. Journal of Consumer Marketing, 15(2), 191-197.

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