Starbucks Competitive Priorities Analysis Development
Introduction
Starbucks is a leading coffee company that operates around the world. The brand has been expanding in the aspects of the number of stores, employees, and countries of operation. Its well-developed strategies, both in the control of supply chain and overall operations, are the main enablers behind its massive success. Its performance objectives, competitive priorities, competitive capabilities, and potential challenges may be analyzed to assess the business’s ability to expand further through more internationalization. Although it faces a few challenges, Starbucks can meet its performance objectives when expanding further.
Company background
Founded in 1971, Starbucks is one of the most famous coffee brands around the world. The company started in the US. In about five decades, the company has successfully expanded its operations to cover a total of 98 countries. It has over 30,000 stores in total (Hanet al. 69). Its operations include roasting and selling premium coffee both online and offline. The company’s fast expansion, especially in the last decade, have proven the effectiveness of its operations in guiding the firm to a successful future. The company is also known for its strong business ethics. It is credited for its willingness and ability to focus on the excellence of customer service, coupled with strong management. These and other indicators of exemplary performance have placed the company in its current position of excellence.
Performance objectives
The performance objectives of Starbucks show the desired result through which the company can achieve success. The company’s performance objectives focus more on the overall performance as opposed to the success of individual processes (Chang 25). It is by so doing that they formulate the basis needed to create a sustainable advantage for the company. There are five performance objectives. They include quality, flexibility, speed, dependability, and cost (Sachdeva et al. .792). In the aspect of quality, Starbucks scores high by conforming to several standards. However, the company hopes to ensure a better quality of its coffee by handling its supply chain, beginning from the stage of acquiring coffee beans to delivering to customers through its retail stores.
The company also plans to do better in other aspects. Inflexibility, the company is famous for its plasticity. It easily adapts to other cultures by conforming to the tastes of people in different countries (Wu 469). It targets an improvement of the same to convince people from diverse cultures to purchase its products easily. In cost, the company is often criticized for overpricing its products. However, it targets better performance in the aspect of cost to improve its market share. In speed, the company responds fast to the needs of its customers by offering an assortment of ready-to-drink coffee (Susanty & Kenny 19). It hopes to do better by improving its ability to deliver beverages in a shorter time. In dependability, the firm’s stores are almost always open whenever customers expect them to be. The company targets better performance in dependability by minimizing or eliminating downtimes.
Competitive priorities and competitive capabilities analysis
The competitive priorities of Starbucks empower it towards meeting the demands of the coffee market in which it operates. The five dimensions of competitive priorities include process flexibility, product quality, delivery reliability, cost leadership, and innovation (Wambaet al.356). Its product quality is good, owing to its ability to control the whole supply chain. The company has a special cost leadership strategy through which it continuously increases the volume of its sales and differentiates it from its competitors. Its delivery is reliable since it ensures that its customers get what they need during the times when the stores are in operation. The company is constantly innovating, especially in matters of customer service and recycling. Its supply chain is flexible, owing to the shift in prices and sources of raw materials.
Starbucks is recognized for its endowment in several performance capabilities. Among them is the ability to make profits through a favourable pricing strategy. The company is a premium coffee brand that targets high-end customers. It easily manages to sell to this group of customers by accompanying its products with services that are of high quality. It is by concentrating on the quality of customer service that the company makes good progress in beating the competition (Vivares-Vergara et al.117). The company’s innovative abilities enable it to offer a wide assortment of coffee products and creative accompaniments for the satisfaction of customers. The company is also known for its good human resource management. It invests in the welfare of employees. By achieving high employee satisfaction, Starbucks achieves high productivity and good performance by its employees (Lin&Ming-Lang Tseng2135). The company’s supply chain management capabilities are also worth consideration. Its strengths in supply chain management are seen in the selection of good quality coffee beans and its ability to maintain a favourable relationship with its suppliers.
Internationalization
China is the second-largest market of Starbucks’ products after the US. The company has more than 3500 stores in the country. Its ability to expand to the country is the result of its investment in the development of strong competitive capabilities. The company depicts the capability to expand further to more countries than the ones in which it is currently operating (Da Rocha & Posiol 38). One of the indicators of this ability is the use of the strategy of localization. The company is recognized for being good at satisfying the needs of every market in which it operates. It is flexible enough to meet the needs of people from more diverse cultures. The company is also fit for expansion due to its global network. The company has already created a good network that it can use to expand to other countries within its regions of operation. The network offers useful information and platforms through which the company can be delivering its products with ease.
Potential gaps/challenges
The business faces a few challenges despite its competitive capabilities. Among the challenges that may hinder the process of expansion is the loss of control. The expansion of a company demands an equivalent increase in the level of control (Bashan & Armon 1193). Starbucks may find it difficult to control a greater number of stores in more countries, owing to the decentralization of activities. The possible demand for the development of more diverse manners of operation due to cultural differences may also hamper good control. The company also faces the challenge of dilution of culture. Diversity and inclusion demand consideration of the various dimensions of different cultures. Including employees from a larger diversity may lead to difficulties in the development of a single culture.
Conclusion/recommendation
The competitive priorities and competitive capabilities of Starbucks indicate a great ability to meet its performance objectives when expanding further to more countries. The company is well endowed in supply chain management, a factor that empowers it towards process flexibility, product quality, delivery reliability, cost leadership, and innovation. These capabilities enabled the company to expand to China and make it its second-largest market. It can use the same capabilities to expand further. It, however, faces the potential challenges of loss of control and culture dilution. However, reinforcing its control through more skilled leadership and replicating its methods of culture development can reduce or eliminate the challenges.
