Starbucks – In 1971, three atypical businessmen founded Starbucks Coffee, Tea and Spice in Seattle, Washington. The company grew slowly and by 1981 had a roasting plant and four retail stores that sold whole bean coffee in Seattle. In 1981 a visit to Ital changed Howard Schultz perspective on selling coffee and he modeled a retail cafe business in the fashion and style of the great "old world" coffee houses of Italy, and bring the same community and coffee culture to the American market.
Question of Value - Coffee quality is a critical component of the Starbucks. Starbucks resource capabilities stem from its financial, human and technological resources. Starbucks has taken advantage of its position and financial strength to ...view middle of the document...
It created a “third place” for everyone to go to between home and work. Creating this unique and relaxing “experience” and “atmosphere” added rareness in which customers’ perceived drinking coffee to which customers have been strongly attracted.
Question of Imitability - Starbucks niche differentiation come from serving best quality and innovative products with unique service that has created a loyal customer base.
In a highly commoditized coffee industry with a little effort and investment any coffee house in the US may be able to imitate the quality of Starbucks coffee. Starbucks focus on quality and aggressive growth strategy has enabled it to become the largest coffee company in the US. By encouraging employees to learn customer’s name and greet them by name when they walk into to the store created a special bond. Coffee house can also model their service and store decorations with emphasis on comfort and customer satisfaction. However product innovation, culture and the community that Starbucks has created around its brand is not imitable. Starbucks is the largest coffee retailer in the US, its deep pockets offers an advantage of investing more towards its value addition which a small company cannot.
Quality of organization - Starbucks primarily focuses on people versus the products and offers the highest quality coffees. Starbucks is one of the numerous large organizations that successfully developed the matrix structure supporting their focused strategy. Its design combines functional and product based divisions, with employees reporting to two heads. Creating a team spirit, the company empowers employees to make their own decisions and train them to develop both hard and soft skills