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Case Analysis: STARBUCKS

ROHAN PAUNIKAR PGP29212, SECTION-D

1. Why has Starbucks grown so successfully? Following factors led Starbucks to grown successfully:

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Inimitability Resource: Starbucks undertook a great deal of research in the coffee roasting process. They came up with signature roasted curves with were later developed into computer software. This resource was inimitable by its competitors Coffee knowledge and service expertise from employees were built over time and it cannot be imitated by competitors within short period Starbucks had close relationship with its exporters and suppliers in its supply chain Competitive superiority: The store design team provided flexibility to Starbucks location constrain. In addition, they had very loyal relationship with real estate brokers. Leadership: Howard Shultz is a transformational leader who is motivating the workforce to give 110% and is treating them as a family. Workforce: Coffee service at Starbucks enhanced the coffee experience for customer. This was the result of service oriented highly trained baristas Value Chain: With accurate forecasting and complex distribution system, Starbucks had pioneered the integrated supply chain Starbucks had close relationship with its exporters and suppliers in its supply chain 2. Why do people buy Starbucks coffee?
Service oriented highly trained baristas provide the customers not only coffee but also an enriching experience.

High penetration by partnering with companies which were leaders in their field Starbucks had a stronger national brand image

3. How will you respond to McDonald's offer? McDonald possess a threat of new entrant for Starbucks as McDonald has the required capital backup and infrastructure support to develop a coffee brand which can compete with Starbucks. In order to increase penetration and avoid coffee war with McDonald, Starbucks should form a special sales agreement with McDonalds