Strategies in business and corporate levels

Since its founding in 1971, the well-known coffee company Starbucks has been a part of the industry. One of the biggest coffee companies worldwide, it. Cold and hot coffee, pre-packaged sandwiches, and pastries are Starbucks' specialties. Starbucks' brands are sold in a variety of shops around the world. Coffee, ice cream, and bottled water are among its key offerings (Foroohar, 2015).
The differentiation strategy is Starbucks' primary business-level tactic. Starbucks wants its clients to plan ahead for more than just a coffee. Starbucks' primary goal is to provide its customers with a distinctive experience, also from the quality and retail environment gourmet coffee however as the quality and store atmosphere services. The grocery stores of Starbucks are strategically located in order to enhance the close relationship that exists within the locality. This will help to create a long-lasting environment for the business to thrive. The stores exist throughout the world and are increasing in numbers (Foroohar, 2015).

The Chief Executive Officer (CEO) of Starbucks has great future plans for the company. He is planning to transform Starbucks beyond the differentiation strategy he is using. Much of the focused plan of the CEO is designed to deal with the swiftly transforming middle class in the United States.

This specific strategy of the company is to climb the ladder in the market by concentrating on the personal history that normally transformed the CEO’s beliefs that constitute issues ranging from race relations to the working poor. For instance, the company has opened various luxury reserve stones that allow customers to get the expensive and unique collection of coffee. Besides, the individual luxury locations have started to offer wine products (Foroohar, 2015).

The focused anticipation of the company is to establish numerous specialized formats that are designed for particular locations or places. One of the examples of the focused differentiation strategy is the express stores established in New York on the mobile trucks in order to locate the college campuses. As a student, the idea to have the mobile truck at the institution is a good idea since the majority of the faculties and students would benefit from the Starbucks on-campus experience. The main task of transforming Starbucks over the next decade is to transform and reshape the current Starbucks experience to greater heights at several different levels of business. This mode of experimentation in the subsequent years will help to determine the various business models in order to attract more customers, especially the uncertain customers. It is my belief that the business-level strategy of the focused differentiation strategy would help to accomplish individual unique experience directly to the prospective customers however it will require broader picture in order to widen the aspect of the corporate organization. Starbucks has actually strategized in order to differentiate itself from other competitors in the market. Therefore, the differentiation strategy has proved to be the best option for the long-term prosperity of Starbucks Company (Foroohar, 2015).

2. Analysis of the Corporate-Level Strategies for Starbucks

Corporation-level strategies refer to the strategies that acknowledge the various factors that presently affect the company and its competitors in the market and such factors might affect the company and its rivals in the future. As a result, the company creates different policies to create creative and new roles that will help manage such factors hence providing a competitive advantage to the company (Rangaswamy, 2007).

Each company must design and use a business-level strategy, however, companies might not use all the strategies. Some of the strategies that firms can use include cooperative, international, mergers, and acquisitions, and corporate-level strategies. Starbucks uses not just the focused differentiation strategy however it uses a diversified corporate-level strategy so as to compete and survive in the ever-changing global economy. It uses international and product diversity strategies so as to handle the geographic diversity in the modern world. The core of prosperous business-level strategies is the customers. Customers should therefore not be taken for granted by the management of the company. This is evident in the case of Howard Shultz in 2008 during the major recession when customers were not ready to pay higher prices for the gourmet cup of coffee sold by the company (Rangaswamy, 2007). It was an indication of the upcoming changes in the company that resulted into Howard Shultz taking over as the CEO of the company. The corporate changes made in the company constituted closing the 900 poorly performing grocery stores in the U.S. Howard Shultz was focused to recapture the experience of Starbucks. The corporate strategies of the company expanded to more than 17,000 stores internationally. For instance, in 2011 alone, Starbucks expanded its products to include instance coffee products. Nevertheless, the majority of customers questioned why instant coffee was introduced by the company. Starbucks has realized diversification and continues to accomplish diversification by expanding its corporate-level strategies to include the acquisition of other businesses and restriction of the portfolio to expand globally (Rangaswamy, 2007).

3. Analysis of the Competitive Environment to Determine the Most Significant Competitor to Starbucks

Dunkin Donuts is a company that is considered to be the most significant competitor to Starbucks due to variation in their business-level strategies. It is a franchise that was established in 1950 offers the best all-day store for baked goods and coffee in the United States. Dunkin Donuts has over 11,300 restaurants established in 36 countries around the globe. It is considered as the best retailer of iced and hot coffee by the cup. Over the next two decades, it plans to increase the number of restaurants to 22,600. It uses franchise candidates to assist maintain America using Dunkin Donuts per year (Morphy, 2015).

The main question asked by many individuals is the strategies used by Starbucks in order to attract more prospective customers to its brand image of a “touching unique link to coffee.” Starbucks has to identify new innovative strategies in order to compete with the relatively cheap cup of coffee sold at $1 as well as the additional large amounts that are provided by Dunkin Donuts. As a matter of fact, Starbucks has not comprehensively made a decision on how to address this rising competition hence its products will probably change in the future in order to attract more customers in the target market. The commencement of the provision of instant coffee by Starbucks is a business-level strategy to minimize the prospect of losing prospective customers that might not be able to afford a cup of coffee sold at $4. The main challenge with this business-level strategy is on how to convert the potential customers to make Starbucks as their preferred choice for a cup of coffee (Morphy, 2015).

Dunkin Donuts is actually a company that offers large volume operations for the food service. The company employs between 25 and 30 individuals on each of its restaurants. The business-level strategy of Dunkin Donuts is mainly directed towards the investors that have proven real estate experience and leadership abilities. It employs the use of a low-level diversification to achieve its vision and mission. The low-level diversification strategy is implemented through the use of a dominant or single franchise model of the business. However, Starbucks Company employs the use of moderate-level of diversification to the high-levels of the diversification strategy. For instance, Starbucks is considered as one of the best companies dealing in the provision of quality services to its employees and clients. It provides good benefits and wages such as tuition benefits. There are also other researchers who believe that Starbucks is a company that promises to accomplish the dreams of the United States of America. The company reached to various universities such as Arizona State University to offer full-time and part-time benefits to the eligible partners of the United States in order to get comprehensive coverage for their tuition. As a result, it provided coverage to students who pursued more than 50 undergraduate degree courses online (Morphy, 2015).

Besides, Starbucks Company offers its Baristas with the free Lyft Rides from and to work. There is also free transformation for all the employees throughout the day hence enabling them to respond to the demands of the jobs at workplaces. It has enabled individuals who previously had difficulties to access the public transportation in the country. This strategy has helped to address the issue of flexibility of the shifts that were considered difficult. As a result, it has enabled the disposable income to all its employees involved in the difficult shifts. The company also has the belief that it would make a vital difference in the provision of quality coffee to American citizens and how the employees of the company can accomplish their American Dreams. Howard Shultz previously initiated the accomplishment of the business-level strategy of the company so as to assist individuals to accomplish their American Dream. This is a strategy that has been accomplished and many employees of the company have registered for different courses in the various colleges in the U.S.A (Morphy, 2015).

Based on my personal opinion, this forms the distinction on why Starbucks is considered as the most prosperous long-term firm in the ever-changing worldwide economy. The company represents more than a mere success among the various competitors in the industry such as Dunkin Donuts. It is considered as the American Dream for all the employees at various levels starting from the lowest income earners and the highest income earners in the company. In addition, it is the American Dream for all the prospective customers who would like to get the link to their personal experience. Therefore, Starbucks Company will continue to succeed and survive in the current most competitive business environment (Morphy, 2015).

4. Determination on Whether the Choice from Question 3 would be Different in Fast-Cycle and Slow-Cycle Markets.

To start with, in the slow-cycle markets, the competitive advantages of Starbucks Company are normally protected from copying or imitation from other parties. This has occurred for a very long period of time. It is, therefore, my individual opinion that Starbucks will be able to survive in both the fast-cycle and slow-cycle markets. In the slow-cycle markets, the company uses strategic alliances in order to gain entry into the new markets or restricted markets. For instance, there was the case where Starbucks partnered with Keurig Coffee in order to promote Starbucks K-cups. It was a strategy that was intended to help gain entry into new target markets. It was a very genius strategy due to the fact that it allowed Starbucks to enhance their ability to effectively compete with the other competitors in the international markets. Historically, Starbucks is actually not comparable to other companies such as Disney. Nevertheless, it can employ the use of corporate strategies in order to have competitive advantages in the market. Starbucks Company is partnering with various educational institutions so as to ensure that its employees are properly trained and educated. Besides, the company partners with various transportation firms to make sure that the employees of the company maintain their jobs for a very long period of time. This is a very important strategy that has long-term success of the company in the slow-cycle market that ensures its stability in the market is maintained (Hitt & Ireland, 2015).

In addition, Starbucks can be able to survive in the fast-cycle markets. The fast-cycle markets refer to a complex, unpredictable, and unstable markets hence providing serious competition to the company. Nevertheless, the company has actually proven that it can be able to transform itself in difficult circumstances. Any form of competition might not have substantial negative effects on the company. Starbucks has effectively founded sources of the new competitive advantages through the introduction of instant coffee. This was a strategy that was introduced to rival its competitors in the market such as McDonalds and Dunkin Donut (Hitt & Ireland, 2015).

Starbucks Company is establishing a value through the provision of free Wi-Fi to its customers at the different coffee houses. This is a strategy that would attract more customers who would visit the coffee houses and drink coffee while enjoying the free network. There is also the launch of the mobile trucks and express stores the New York City so as to reach a wider customer base. It has also introduced retail stores and new roasting factors that are within the customers’ neighborhood hence it has been able to expand its objective for the middle-class individuals who would like to accomplish their American Dreams. Starbucks has been able to partner with the other rival companies in the market such as Keurig Coffee so as to buy the other products that are in high demand. This would help the company to prosper during the fast-cycle markets (Hitt & Ireland, 2015).

Finally, Starbucks Company maintains the leadership position in the market and enhances the process of developing its products with the new markets and services so as to manage the level of uncertainties that might be occurring. The company mainly depends on the late makers and late drinkers without any room. According to the former CEO of Starbucks, Howard Shultz, he depended on both the late makers and late drinkers in order to ensure that the coffee empire survives in the future. It is from this perspective that I agree with the philosophy of Starbucks that various corporate organization have vital tasks of assisting individuals to accomplish their American Dream (Hitt & Ireland, 2015).

















References

Foroohar, R. (2015). Howard Schultz Wants to Change the Country With ... - Time. Retrieved November 4, 2017, from http://www.bing.com/cr?IG=EB329773B3EF441CAECBA56A77B5D403&CID=13342C708D3467953C2E27408C3266B9&rd=1&h=I_1O7wtHbXanRHXwBuzmaG2ZbJ22tQDefsTAeMr2pgk&v=1&r=http%3a%2f%2ftime.com%2f3696865%2fstarbucks-for-america%2f&p=DevEx,5058.1

Hitt, M. A., & Ireland, R. D. (2015). Strategic Entrepreneurship. Wiley Encyclopedia of Management, 1-3. doi:10.1002/9781118785317.weom030091

Morphy, E. (2015). Lyft Makes Starbucks An Offer It Couldnt Refuse - Forbes. Retrieved November 4, 2017, from https://www.bing.com/cr?IG=27725CC73A214912AF297840119BE626&CID=049195893680602A191B9EB9378661F7&rd=1&h=uZvBLS8gY-uxsG7-II2TPvbuPduH3Q8TJqLwOXJAVm0&v=1&r=https%3a%2f%2fwww.forbes.com%2fsites%2ferikamorphy%2f2015%2f07%2f26%2flyft-makes-starbucks-an-offer-it-couldnt-refuse%2f&p=DevEx,5045.1

Rangaswamy, P. (2007). South Asians in Dunkin’ Donuts: Niche Development in the Franchise Industry. Journal of Ethnic and Migration Studies, 33(4), 671-686. doi:10.1080/13691830701265644