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Starbucks Strategy Essay
The largest coffeehouse chain of the world is the very different story of the food brand and the drink business empire. Established in 1985, Starbucks has its headquarters in city, America. This premium beverage brand has extended fast and is operating across 75 countries. Within its 33 years of experience, this corporation has come to be known for some things apart from the largest variety of chocolate flavors. The good brand depends on good products and Starbucks has exceptionally well products to provide. Without always compromising on taste and quality, it has remained to explore stronger alternatives to make its clients but the best from this world of chocolate. However, Starbucks is not only the beverage brand. It is fortunate because it is a consumer centric brand and yet with changing business dynamics, this organization has proven itself relentless in terms of its emphasis on customer service.
And also, it is costly to imitate for Starbucks's competitors. Brand and Reputation Brand recognition and reputational are essential resources and capabilities to Starbucks's competition advantage. According to Starbucks Strategy Fortune, "Starbucks store traffic has risen between 6 percent and 8 percent a year even in a down economy". Starbucks reputation was growing mostly by word of mouth rather than spending on advertising. Schultz believed that opening numerous stores helped to build the brand to Starbucks by increasing awareness of the brand.
However, the Starbucks strategy went against the grain. Instead of following the trend, CEO Howard Schultz had a different idea. He decided that the Starbucks strategy would be to blanket an area completely. Siding matter about one store cut the profits of another store, the Starbucks strategy focused on heavily increasing the foot traffic in one specific part of town. They think this will reduce the company's delivery and risk, also the customer doesn't need to stay in the waiting line for a long time. Schultz knew that his Starbucks strategy was a risk, but it was one he was willing to take.
Starbucks' first non-North American store was opened in 1996 in Tokyo. Starbucks initially used licensing agreement for its global strategy. Because Starbucks wanted to control the business strategy in the Japanese market, it changed the strategy by establishing joint venture with a local retailer, Sazaby, Inc. Then, Starbucks licensed its business format to the joint venture company. After entering into the Japanese market, Starbucks increased the pace of international expansion significantly.
Because of its high growth at major cause, Starbucks create global expansion. Starbucks adopted the strategy that characterizing through poor local quality and cost considerisation. At this 1996 Starbucks begin to produced in Japan through joint business, and so it extend to Europe and the Middle East using the same means.
Type: Free Essay Example
Level: Law School
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