Strategic Choices
The company has been struggling due to the recent global financial crisis that shook the entire business world. Due to this, the top management has brought on board a number of strategies that are meant to increase business and make the company more competitive. Even before the crisis, the company had put up a wall page on social networking sites. This page in conjunction with others on the various blog pages was meant to increase visibility in terms of what people say about the company on the internet. This was meant to help in conclusive decision making that encompasses all information areas (Plunkett et al. 2008).
In a strategic move that is in tandem with Porter’s differentiation strategy, Starbucks has embarked on making products that meet customer specifications. Based on the geographical and cultural background the company has made sure that every customer is special to its operations by coming up with services and coffee products that suit the needs of everyone. This includes Latin coffee, Russian sandwiches and German cuisine. This helps the company to have many customers from different parts of the world that are loyal to its product orientation (Porter, 2003).
In the area of technology, the company has improved the nature of coffee production to make customers more receptive to the products. Instant coffee has been made fine enough to enhance its place in the market. Coffee service in the various shops has been easy through the introduction of quick coffee-making machines that are up to date. This according to Porter’s focus strategy has given the company’s competitive advantage in terms of cost. This has also been tailored to include all areas in the geographical arena to have an all-inclusive business that is different to suit the needs of all and sundry.
The marketing and advertising department of the company has done a good job in the moving of the company’s products. They have employed up-to-date marketing that has focused its energies on the customer specifications. Although faced with cutthroat competition in the coffee industry, the company’s eye-catching advertising has helped it to sustain itself in the storm. Over the years the company has had many partnerships and products that have been in and out of the market. This has made it to have a footing in the areas that do not have an affiliation to a single product over a long period of time. They have also pegged their marketing on the products they offer and how successful they fare in the market (Porter, 2003).
Swot Analysis
The company on the basis of the swot analysis has done well in the four analytical areas. The company has invaluable resource in its strengths portfolio. The company brand name is enough to be its selling point for quite some time in its future. Therefore it struggles to maintain its popular brand by making products that up to the standard that they set. This standard incorporates service and building of structures. It is also a very profitable organization which has monetary muscle unmatched to other similar players. The most notable weakness is the undifferentiated products as compared to the competitors. The company argues that specialization is its key winning point (Starbucks Coffee Company, 2010).
The company has myriad of opportunities its way. It has the capacity to involve itself in franchising. This will generate even more revenue for them. However care must be taken to ensure that quality is maintained. Also its market has grown with the advent of the internet to new frontiers in Africa and the Middle East. The local market is also expanding. There is however a real threat of new more aggressive competitors that are employing bad tactics such as price wars. They are also painting bad reputations of the company. The competitors are introducing new products that are surpassing Starbucks products. The issue of taxation on new products is making the company to shy away from them as their fate in the market remains unknown (Plunkett et al. 2008).
References
Porter, M. (2003). Competitive Strategy: Techniques for Analyzing Industries and Competitors. New York: Routledge.
Plunkett, W. et al. (2008). Management: Meeting and Exceeding Customer Expectations (9th ed.). Mason, OH: Thomson South-Western.
Starbucks Coffee Company. (2010). Web.
