Starbucks Strategy: Competitive Advantage and Differentiation

This report analyzes Starbucks' strategy, focusing on its competitive advantages and differentiation. Starbucks employs a product differentiation strategy, offering premium coffee and a premium customer experience, setting it apart from rivals. The company's strategic alliances and company-operated stores, rather than franchising, contribute to its distinctiveness. The report highlights how Starbucks leverages premium locations, a superior product mix, and excellent customer service to maintain its leadership position. Furthermore, Starbucks' market research plays a crucial role in understanding customer preferences, enabling the company to gain a sustainable competitive advantage. The report uses the example of sustainable strategies and competitive advantages of Starbucks is differentiation. The references provide additional context for the analysis of Starbucks' business strategies.

Running head- Starbucks Strategy
Starbucks strategy

1
Starbucks Strategy
What type of strategy does Starbucks have? What sets it apart from its rivals? What is there
about the company’s strategy that can lead to sustainable advantage?
One of the main strategy that Starbucks use to follow since its incorporation is product
differentiation strategy. Starbucks use this product differentiation strategy in a way to gain the
strategic as well as competitive advantage in the global market. It uses to offer the premium
quality of the coffee to the customer to make them delighted. It charges a premium price for its
product.
Fine locations, premium product mix, fine customer services are the keyway for the grand
success of the Starbucks.
Starbucks is apart from its rivals
Starbucks strategies set it apart from its competitors and rivals as the strategy of Starbucks is to
offer the highest and finest quality of the product to the customer at a premium price. So it has
the only premium customer who mainly focuses on brand and quality. Starbucks also follows the
shrewd strategy of strategic alliance and making a very smart acquisition. Starbucks doesn't
follow the franchising model and operated company oriented stores and joint ventures in the
international market which keeps Starbucks apart from its rivals (Knapp et al., 1999). Starbucks
has premium locations, premium product mix, and its use to provide the best and fine customer
services which made Starbucks a leader and it is very much costly for the rivals to imitate these
tactics at the global level, which make the Starbucks leader and distinct and keep ahead of its
rivals.
An example of sustainable strategies and competitive advantage of Starbucks is differentiation.
Besides this company market research play, a crucial role in developing the sustainable

2
Starbucks Strategy
competitive advantage to the market research of Starbucks is very proficient and accurate which
enable the Starbucks to know exactly about their customer preferences.
References
(2017). Scholar.harvard.edu. Retrieved 12 March 2018, from
https://scholar.harvard.edu/files/nithingeereddy/files/starbucks_case_analysis.pdf
Knapp, D. (1999). The brand mindset: five essential strategies for building brand advantage
throughout your company. McGraw Hill Professional.