Case study of Starbucks 03055 - Essay Example

Entire study is backed up by relevant case information collected from credible sources. Finally an overall assessment of the company’s strategy has been done highlighting the organizational activities that has lead to the firm’s sustainability and increased competitive advantage. The business pursuit strategy of Starbucks can also be discussed in the light of Porter’s generic strategies. The Porter’s generic strategies highlight a firm’s position in terms of four parameters, cost leadership, cost focus, differentiation and differentiation focus (Porter, 1980).

The generic strategies define the nature of business strategy that is most profitable for a business concern. Differentiation strategy is implemented to ensure that an organisation’s product is different from that of its competitors. Differentiation strategy allows an organisation to remain agile in terms of new product development. Innovation is essential for implementation of differentiation strategy. The cost leadership strategy, on the contrary, is mainly about achieving cost advantage in every direction of the business.

In cost leadership strategy, a company targets to maximise its profit by minimising its net cost of sales. Focus strategy is not considered as an appropriate competitive strategy as it is focused on a relatively narrow segment of the consumer base. Starbucks as a parent brand has positioned itself to follow differentiation strategy. This can be justified by the company’s high quality product offering of specialty and unique in-store experience (Grant, 2013). This helps Starbucks to distinguish itself from the rival brands.

Although the parent company falls in the differentiation segment, however some of the products of Starbucks fall under other categories as well. Starbucks introduced a new brand of instant coffee called VIA which falls under two categories, Cost Leadership and Differentiation. VIA acts as a lower cost alternatives to the highly