From the e-Activity, evaluate the effectiveness of Starbuck’s current business strategy execution in terms of pricing, differentiation, and market demand. Suggest one (1) modification to the strategy that could help the company to implement new distinctive competencies. Provide a rationale to support your response.
Starbuck has been competitive in its business for years. Particularly, the company was able to go through the tough recession period in the USA. The current business strategy of the company has been significant for the competitiveness and survival of the company. To start with the company has over the years engaged in an aggressive differentiation strategy. The company’s differentiation involves music in the coffee shop, design of the shops, and type of products offered by the business. With respect to differentiation, the company has embraced new technology to create value for its customer. The use of new technology has assisted the company to come up with novel services and products. In addition, through use of new technology the company has been able to come up with a mobile payment system. Due to the effective differentiation strategy, the company provides its products at premium prices. Basically, the high quality and value of its products match the premium prices. I would propose a modification to the company’s strategy by implementing a horizontal integration strategy. This should be in line with the differentiation strategy. The horizontal integration strategy would assist the company form strategic alliances with its competitors. Through joint ventures the company will be able to bargain for high prices since competition has been reduced.
From the e-Activity, evaluate the competitiveness of Starbuck’s positioning in its industry utilizing the Value Creation Frontier model. Analyze the strengths and weaknesses of Starbuck’s differentiation strategy, and determine the main possible implications inherent in the application of the strategy.
Currently, Starbucks has positioned itself as the market leader. The premium prices and quality of its services and products justify its position as