Starbucks Competitive Advantages

As a leading worldwide brand, Starbucks has many competitive advantages in the coffee beverages market such as strong brand name recognition, large retail distribution system, quality product, extensive product list, good supplier relationships, strong financial history and strong human resources.

Starbuck’s retail strategy for developing an advantage over its competition, is designed primarily to maintain loyalty and repeat business among its target market (upscale coffee drinkers), to hiring and training knowledgeable counter servers, called baristas (Italian for bartenders), to educate customers about Starbucks’ specialty coffee drinks and associated products, and to provide customers with an opportunity to take a break from their busy lives in a relaxing atmosphere. Starbucks has pursued an extensive product line strategy, creating a variety of products, beyond simply the coffee beans. Through partnerships, it now provides coffee flavor and expertise and/or its brand name to jazz music CDs, frappuccino beverages, carbonated ready-to-drink (RTD) coffee, flavored ice creams, and branded coffee sold through supermarkets. Moreover, in terms of distribution, brewed Starbucks is now available at a variety of places including Barnes & Noble bookstores, United Airlines, Sheraton and Westin hotels, and Holland America Cruise Lines, as well as through licensing and joint venture agreements in 15 countries.

Starbucks, like every retailer, supports its strategy with its retail mix. With regard to location, individual sites are selected in the most highly visible places possible and centralized cities serve as hubs or regional centers for rollout expansion into nearby markets. Its merchandise assortment based on sales distribution is composed of coffee beverages (58%), whole bean coffee by the pound (17%), food items (16%), and coffee-related equipment (9%). Coffee beverages are standardized across outlets, but food offerings vary from store to...