Starbucks: An Alex Poole Strategy Case - Essay Example

Starbucks: An Alex Poole Strategy Case From the case study, it is evident that Starbucks has the capability to expand meaningfully beyond their coffee business without destroying their core coffee retailing business, while they also have the capabilities to create value through their diversification strategy. Moreover, while their competitors are competitive, their addition of higher quality and customized coffees to the menus does not represent a significant threat to Starbucks. As a result, Alex Poole should keep his grandma’s Starbuck’s stock in her portfolio.

To begin with, Starbuck’s marketing strategy has managed to create a brand that shows understanding for consume needs, lifestyle, and values as their attention to the customer’s experiential factor has been one of the most important contributors to their success. The company’s creative marketing, such as giving free tasting experience to their customers to sample products, has created brand loyalty and should continue being a sustainable source of competitive advantage for them even as they diversify their products (Barney & Hesterly 195).

Starbucks can also create value through their diversification strategy, specifically because their supplier relationships and superior distribution channels will imbue them with advantageous economies of scope. However, this will only give them a temporary competitive advantage and could, eventually, cause them to lose their core coffee retailing business (Barney & Hesterly 197). With regards to competition from companies like McDonalds, Starbucks can rely on customer service that has been a distinguishing factor for them.

With at least 85% of their revenues coming from retail storefronts, Starbucks has made customer service their brand’s cornerstone. While their competitors may have the capability to hire similar employees, Starbucks’ combination of passion of brand excellence, quality work atmosphere, and employee empowerment has and will continue to give them a sustainable competitive advantage over their competitors (Barney & Hesterly 199).Work CitedBarney, Jay B, and Hesterly, William S. Strategic Management and Competitive Advantage: Concepts and Cases.

Boston, Mass: Pearson, 2012. Print.