Strategic Analysis: Microsoft's and Starbucks' Competitive Approaches

This report provides a comparative analysis of the competitive strategies employed by Microsoft and Starbucks. It begins with an overview of each company, including their founding, key products and services, and mission statements. The report then delves into the factors contributing to each company's market success, such as effective management, diverse business portfolios, innovation, communication with enterprises, and intellectual capital management for Microsoft. For Starbucks, the analysis focuses on aspects like ambience, wide market targeting, customer convenience, adaptation to digital means, understanding of the CAGE framework, and marketing mix. The report draws upon various sources to support its findings, offering a comprehensive understanding of the strategic approaches these two global companies use to maintain their competitive edge. The report concludes by summarizing the key takeaways and comparing the strategic choices of the two companies.

Running head: Competitive strategy 0
Competitive Strategy
Microsoft & Starbucks

Competitive Strategy
1
Microsoft
Microsoft was established in the year 1975. It was founded by Bill Gates and Paul Allen. The
company has its headquarters in Washington, USA. Company deals in computer software industry,
customer hardware industry and consumer electronics. Key products of the company include
Windows, Office, Servers, Skype, Visual studio, Xbox, Mobile and lot more. Main services of the
company are Bing, LinkedIn, one drive, outlook, windows store etc. Company’s mission is to enable
every individual and organisation to achieve more by empowering them. The company is world’s
most valuable company of the world and leader in the software industry. Satya Nadella is the current
CEO of the company (Microsoft, 2017).
Microsoft products are today used by almost all the individuals and offices. The company can be
thought of as a profit producing machine that is well managed (Marks, 2013). The credit for the
success of the company can be given to various factors. Some of those are discussed here. The major
reason for the Microsoft being a powerful player in market is that its management is very effective.
IT the past so many years the Microsoft has not made any major blunders. The company faced some
twist and turns but was able to recover through them. This is one the reasons that company is most
trustworthy. The Microsoft had a diverse business portfolio. When others thought of the declining
market share of windows the Microsoft invested itself into various other strong domains. Major of
them were Xbox which got great success in gaming. The company has built multiple business
platforms to deal with the uncertainties of the particular segment (Satell, 2013). Another reason for
the current market standing of the company is its ability and willingness to think out of the box.
Microsoft has around 1000 research labs that are designed to give innovative products and users. It
continuously work s on various projects to provide something different and useful Major innovative
projects on which company is working on include the Surface Hub, Hololens and Oculus Rift
(Gewirtz, 2015). Another tactics of the firm that helped it to gain current market success is
communication with enterprise. The company product Windows Vista was unsuccessful in the
markets. Therefore before launching Windows & the company provided it to the few enterprises and
checked for the suitability of the product. The company had communication with the selected
enterprises to find out the debugs and errors in the product. This communication helped the firm to
alter the product before launching it on the large scale. The current sales show how positively this
tactics of the company responded (Reisinger, 2010). The other contributing success factor for the
company is effective management of intellectual capital. By the term intellectual capital it does not
always means patents; it means the broad knowledge base that has been developed by the company
over the time. This knowledge base in embedded in software development libraries which help in
effective and efficient management of the product. Microsoft’s community partners, who are now
40,000 firms in number, also contribute for innovative product development (Silverthrone, 2002).

Competitive Strategy
2
Starbucks
Starbucks was founded in Seattle, Washington in the year 1971. This is an American coffee company
and coffee house chain (Starbucks, 2016). Kevin Johnson is the current CEO of the company. The
company provides differentiation in terms of quality, taste and customer experience. The company
introduced dark roasted coffee and handmade light roasted coffee. The company serves coffee
beverages, tea, smoothies, baked goods and sandwiches. Starbucks began as a small Coffee been
store and today it is the well-known global brand. The company faced many downturns and
challenges but still holds the prominent market position.
There are various reasons for the current market standing of the company. Some of those reasons
are ambience, wide market targeting and consistently convenient. The ambience of the place is a
major factor drawing customers to the company. The prices of the company are very high and
customers are ready to pay that price not only because of the coffee taste. The reason for that is the
attractive ambience of the place. Almost all the outlets of the Starbucks have similar kind of
ambience. This includes rich warm colour scheme, baristas in green aprons, organic-looking art and
alternative music. The next success factor for the company is wide target market. The company
focused on wide target market. It developed products for all age groups. The menu includes plenty
of beverages other than coffee and small snack sections. This helps to attract snack seekers and
children. It serves as a place for everyone. Starbucks is a customer centric organisation and keeps all
the needs of the customers at priority. The Starbucks is the world’s largest food chain with around
17000 stores across 50 countries because of its business model. Starbucks focus on the convenience
for the customer. The well skilled and trained workforce at skilled workforce of the Starbucks works
to continuously serve the customers best of their level. The company is also working to make the
ordering process cashless. The Company’s model is designed in such a way that it provides the
feeling of relaxation to its customers (Hennessey, 2012). Also the business model of the company is
culturally sensitive to different cultures across the globe. Another factor that contributed to the
company’s success is adaptation to the digital means. For instance, in the Asia pacific region the
company has recently launched new loyalty programme and designed a mobile and digital payment
platform (Team, 2016). Another factor that is responsible for current market standing is deep
understanding of CAGE framework. The CAGE framework gives an understanding about Cultural,
Administrative, Geographic and Economic differences between the countries. This Framework has
enabled the company to clearly identify the differences in the overseas market and the company
adopted market strategy according to them. The other success driving factors for the company are
diverse product mix, creating substantial partnership and innovative and versatile products and
services. The company also has strong marketing mix. It uses various marketing tools as direct mail
for the purpose of distributing coupons to frequent customers, newspaper advertising,
diversification of brand name and social media marketing.

Competitive Strategy
3
References
Gewirtz, D., 2015. 10 reasons Microsoft is still a force to be reckoned with, viewed on 24 August 2017
from http://www.zdnet.com/article/10-reasons-microsoft-is-still-a-force-to-be-reckoned-with/
Hennessey, R., 2012. 3 Reasons Why Starbucks Still Shines, Despite Market Shortcomings. The
Forbes, viewed on 24 August 2017 from
https://www.forbes.com/sites/rachelhennessey/2012/08/06/3-reasons-why-starbucks-still-shines-
despite-market-shortcomings/#3e81c5631cd0
Marks, G., 2013. The Secret To Microsoft's Success, viewed on 24 August 2017 from
https://www.forbes.com/sites/quickerbettertech/2013/10/28/the-secret-to-microsofts-success/
#2c9cd9773915
Microsoft, 2017. We believe in what people make possible, viewed on 24 August 2017 from
https://www.microsoft.com/en-us/about/default.aspx
Reisinger, D., 2010. 10 Things Microsoft Did to Make Windows 7 a Success, viewed on 24 August
2017 from http://www.eweek.com/enterprise-apps/10-things-microsoft-did-to-make-windows-7-a-
success
Satell, G., 2013. The Secret of Microsoft's Success (And Some Lessons For Apple), viewed on 24
August 2017 from https://www.forbes.com/sites/gregsatell/2013/04/15/the-secret-of-microsofts-
success-and-some-lessons-for-apple/#23dfdd841587
Silverthrone, S., 2002. The Secret of How Microsoft Stays on Top, Harvard Business School, viewed
on 24 August 2017 from http://hbswk.hbs.edu/
Starbucks, 2016. About Us, viewed on 24 August 2017 from http://www.starbucks.in/about-us
Team, T., 2016. Let's Look At Starbucks' Growth Strategy. The Forbes, viewed on 24 August 2017
from https://www.forbes.com/sites/greatspeculations/2016/09/19/lets-look-at-starbucks-growth-
strategy/#549674923d71