Business Policy and Strategic Management - Research Paper Example

Starbucks- Strategy Probably one of the best executed differentiation strategies has been adapted by Starbucks as based on its superior quality; it has been able to achieve the leading position in the market. The overall market share of the firm suggests that the firm’s generic strategy is actually offering the firm a chance to achieve and maintain the competitive advantage. Over the period of time and even during the current economic crisis, firm has been able to remain profitable and also generated enough cash from its operations to lessen its reliance on the external sources of funding.

This aspect of the operations of the firm therefore outline that the firm’s differentiation strategy is paying dividend in terms of returns to the owners of the firm. The very reason as to why Starbucks has been able to generate the kind of competitive advantage within its industry is based upon the fact that its differentiation strategy has provided it an edge over others. A closer analysis of the history of the firm would suggest that the Starbucks started with selling of the coffee manufacturing equipments which were considered as finest in the industry.

Its use of the Arabica beans- highest quality coffee beans in the world provides its coffee a unique taste and quality lacking in other products offered by the competitors. (Anders). It is also important to note that Starbucks marketing strategy has also duly supported the firm’s traditional superiority in offering high quality coffee over different destinations in the world through its strategic business partners. It is also important to note that the kind of growth achieved by Starbucks over the period of time is also based upon its overall organizational model and how it is integrated with its overall strategy.

Starbucks’s growth strategy is based on the sharing of the costs and risks with its business partners across the world thus allowing to become more flexible in terms of offering the high quality products at relatively low cost. (Allison). The new growth strategy of the firm is also focused on achieving the same by further cutting down the costs. It is also important to note that overall corporate identity of Starbucks is also another of its source of differentiation. Since competition in the industry is relatively high due to low cost nature of the product therefore competition is often based upon other non-pricing factors also such as quality, better stores as well as the effective human resource management.

The long term objectives of the firm include extensive expansion into non-traditional markets such as China and India where firm aims to enter with the help of its business partners. However, Starbucks tend to enter into these markets by exercising its old strategy of sharing the costs and the risks. These objectives seem to be achievable considering the overall core competencies of the firm and how it has been able to achieve growth in the past. Starbucks also aims to engage itself into product innovation thus achieving growth while at the same time controlling and managing its costs.

(Starbucks) Bibliography 1. Allison, Melissa. Starbucks has a new growth strategy — more revenue with lower costs. 15 May 2010. 16 March 2011 . 2. Anders, George. Starbucks Brews a New Strategy . 31 July 2001. 17 March 2011 . 3. Starbucks. Starbucks details cost strategy. 19 March 2009. 16 March 2011 .