Assignment about Concept Application

LA#4 Concept Application #2: Competitive
Advantage
Read Case 7: “The Commoditization of Starbucks” (page 564, in
textbook), pages 435 – 437. Answer the following questions based on
information provided in the case, using the template below. 4-page
maximum.
You may remove the template instructions.
1. Competitive advantage - Do you think that Starbuck has a competitive
advantage? Briefly explain your answer (
hint: apply the definition of
competitive advantage discussed in class). (1 mark)
Competitive advantages are the conditions which is known to allow a
company to produce a very good service at an equal value at a much
lower price and in a more distinguishable fashion. These will help the
organization to gain more attraction towards itself and increase the
number of sales for the organization when compared with the similar
category of products in a large range. The mission statement of
Starbucks says that the company follows the guiding principles which
helps it to stay in a competitive position over its competitors. The
guiding principles mainly includes :
 Providing great work environment in order to treat the employees
and consumers with respect and dignity
 Embracing the diversity as an essential component
 Applying higher standards of living in roasting and delivering the
coffee to the customers
 Developing enthusiastically satisfied customers all the time.
 Helping the community and the environment.
Yes I do think that the company has gained a competitive advantage
over its competitors in the market. According to the author Harrington,
Ottenbacher & Fause (2017)the organization has built a very strong sources of
competitive advantage. Its global network, premium quality of food and
services, and its brand image are the strong points for the company.
The Starbucks experience is a combination of empowering the
corporate culture which shares the wealth with the employees. This
inturn creates a very unique and personal experience among the
employees Enz (2009 page number 435 – 437)
The organization is also able to develop innovative products which also
shares various types of organizational software and application. This is
known to minimize the risk, timescale the costs of production
development which therefore enables the company to introduce a new
steam of new and innovative products.
2. Resources, core competencies and products - Identify and describe 5
products, 5 resources, 5 core competencies for Starbucks. (15 marks)
Products
The description of products of Starbucks are :
 Nitro Cold Brew - The coffee is made by the company in order to
make the coffee a very smooth taste which is known to get even
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LA#4 Concept Application #2: Competitive
Advantage
better. The organization is also planning to introduce it with the
nitrogen flavor for a better taste. It was implemented by the
company as because it is a natural sweet taste flavor and more
cascading, velvety cream and perfection served at its best.
 Starbucks Spiced Sweet Cream Narino 70 Cold Brew – The
Starbucks Narino 70 Cold Brew coffee is a custom blend of 70
percent Columbia Narino and adds on 30 percent African coffee
beans. The Slow Steeped is whopping for more than 20 hours
gives a separate taste to it.
 Roastery Cold Coffee – It has been about immersing the
customers with the craft of cold coffee. The roasted coffee beans
are one of the rarest things. It comes in a new Affogato line up
and has a separate fan base of its own.
 Mora Iced Creamery – This small coffee flavored with a variety of
ice creams which are made with fresh milk , eggs and different
types of sugar cranes.
 Affogato Coffee – This trio of beverages are made from the classic
Italian Desserts that is poured over the ice cream scoop in the
rich espresso. It also has a touch of demerera syrup and dustings
of cinnamon Harrington, Ottenbacher & Fause (2017).
Resources
The description of resources are :
 Human Resource Management – The human resource of
Starbucks is concerned with the activities such as the recruiting,
managing, training, development and rewarding the employees in
the organization. For this reason they have made it very clear to
make all the employees equal in the store rooms.
 Technology Development – The organization is known to have a
huge amount of technological innovation. The organization is
using technology from regulating the stocks t registering the
customers in the cash section. The stores are also wifi enabled
which helps the customer to access free internet.
 Inbound logistics – This means that the coffee beans and other
products received by the company, which they need to product
and service in their stores and package of the subsidiary
products.
 Research and Development – the research and development part
of the company is known for making the most important decision
regarding the use of appropriate coffee beans and delicacies
which will make the best in class coffee to the customers. The
research and development of the company is one of the best
resource accrued by the company as because with its helps the
whole organization to smooth.
 Equipment – Starbucks has made a huge amount of expense in its
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LA#4 Concept Application #2: Competitive
Advantage
resources which are the time saving and taste creating machines.
The organization has made huge expense in setting up the
devices to benefit the customers
Core competencies
The core competencies of Starbucks are:
 Unwavering focus on quality – The organization is known to have
a clear focus in providing the best quality of products to the
customers they will be serving. The organization is spending huge
amount of money in developing the products and services.
 Outstanding customer service – The organization is known to
have a best customer service team in its work place. The
organization has built a separate team who are known to gather
the feedback which is received from the customer.
 Continuous product advancement – The organization is always
changing and bringing advancement in the products and services
offered by the company. It develops the products with utmost
care and serves it to the customers.
 Care for its employees – The organization is doing everything to
take care of its customers. According to the author Taecharungroj
(2017)organization is taking care of each and every delicate thing
to satisfy its employees with the best in class coffee.
 Drive to be everywhere – The organization has a present mission
that is setting a Starbucks outlet everywhere. This will help the
company to gain more customers and have a competitive
advantage over its competitors. With the motive of setting up a
new Starbuck center and coffee shop in a new place the
organization will be able have a greater customer base under the
brand (Shirdastian,Laroche & Richard 2017).
3. Value for customers - Using the “The Value Pyramid” discussed in
class (available on eLearn), identify and explain 3 types of value/s
Starbucks is creating for the customer and the resource/core
competency used to create the value you have identified (based
only on information available in this case)
. (3 marks) Resource that
can help you:
http://www2.bain.com/bainweb/media/interactive/elements-of-
value/#
Value created: Social impact
Resource/core
competency used
to create the value
identified:
The organization is creating a social impact that is
by providing the customers with one of the best
coffee and other eatable products. The customers
are also liking it just because it provides a best in
class materials. The best in class coffee which is
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