Business Level Strategy at Starbucks

According to the class notes and core text, business-level strategy involves identifying

opportunities that would add value to the clients as well as provide the company with a

competitive advantage. To identify the business-level strategy at Starbucks will entail carrying

out a SWOT analysis of the company.

SWOT Analysis

A SWOT analysis of the company shows the important role of differentiation in

reinforcing the brand image. Starbucks retains its place as the largest coffee chain across the

globe through creative approaches that harness business capabilities to counteract potential

weaknesses and address obstacles to success, such as threats in the coffee industry ecosystem, as

established in this SWOT assessment.

Strength: The strongest point of Starbucks lies in its solid reputation, reinforced by outstanding

customer service and people-management. Starbucks is a renowned brand of coffee and soft

drinks that has made significant advances in all major international markets. The organization

outranks its closest rivals, such as Barista and other nascent rivals. The brand stands for

consistency, and quality. The organization has an increasing population of loyal fans, which

contributes to the stability of the coffee business

Weakness: Higher/premium prices: Starbucks offers premium price ranges that enhance rthe

bottom line but decrease the affordability of its commodities. This internal factor is a

shortcoming because it compromises the value of the firm's shares, particularly in parts where

real wages are remarkably low.

Opportunity: Starbucks should consider diversifying its business as an opportunity that can

enhance the long-term prosperity of the organization. For instance, by increasing diversification,

the business can minimize its reliance on its existing business sectors, thus further enhancing

profitability prospects.

Threats: Starbucks operates alongside a wide range of companies on the global market. For

example, the organization goes head to head with leading hotel chains charging lower-cost coffee

drinks. This extrinsic tactical element endangers Starbucks' posit as such rivals could offset the

share price by trying to compete on the basis of discounted prices.

The SWOT analysis reveals the need for Starbucks to adopt differentiation as the business-level

strategy for countering the weaknesses and threats identified. At present, Starbuck’s controls a

significant proportion of the specialty tea market. Besides segmenting its market well, Starbuck’s

also has a unique store concept comprising of contemporary design elements that makes it

appealing to its target demographic. I believe that Starbucks’ business-level approach is product

differentiation, which includes providing unique products such as premium product blends,

places, quality coffee drinks and the overall customer service that transforms into creating a

highly valued brand that is expensive to replicate for rivals. Differentiation practices do not

involve the pursuit of distinction for the sake of being unique. Rather, it entails trying to

understand consumers and how the Starbucks experience can satisfy their needs. The main

motives of differentiation include quality, consistency, functionality and, in some instances,

customer relations and the image of the company. Starbucks differentiated its products on the

basis of quality and created a completely unique guest experience. In providing a fulfilling and

enjoyable consumer experience, Starbucks has succeeded in drawing the consumer's attention

to the quality of the experience, the memorable moments that can be created in their shops and
not on the cost of its products The business runs with a deep sense of care and attention, and the

continuity of positive quality of service throughout all the retail outlets and products is a major

area of focus. The business goes over and above selling coffee to creating something a little more

special, a home away from home, the so-called "third-place experience," which is why people are

prepared to pay a premium price for the Starbucks experience.

The differentiating aspects Starbucks include:

1. Excellent customer service: the team provide superior customer service. The company

builds relationships with its consumers one cup at a time with gift items such as

personalized mugs that they modify each season, trying to keep things exciting for their

loyal fans. The company invests extensively in educating its front-line staff to produce

incredibly efficient baristas or "partners" who represent the culture of Starbucks and

ensure each of customer experiences unique and unforgettable. In the spirit of being

customer-centric, Starbucks baristas know and address customers by name as a sign of

genuine care and a way of getting to know the people they serve on a more personal

level. Although Starbucks is not a cost leader , but by providing its own concept of a

luxurious, sophisticated freshly roasted coffee experience, the company managed to

establish out a significant target market of coffee lovers.

2. Starbucks has also invested in a distinctively ambient store layout. Starbucks has created

an atmosphere that is both inviting and accessible. Each detail, from the decor to lighting,

has been well thought-out to ensure that clients feel comfortable in their outlets.

Consider, for instance, the cyclical tables that have been explicitly selected to allow

single guests feel more comfortable, and also open up contact with a bigger group.
3. Product diversification: Starbucks offers a diversified product mix including premium

teas, alcoholic and soft drinks as well a smoothie. This offers customers with a wide

range of options. With its exclusive and diversified product offerings, Starbucks has

gained a strategic advantage. The company satisfies what their customers see as

meaningful and are capable of generating demand at a profitable level.