Starbucks success factors

Published: 2018-04-11 13:41:01
1760 words
6 pages
Carnegie Mellon University
Type of paper: 
Research paper
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Critical Success Measures and Factors

Starbucks has numerous success actualities that affect its operation for example advertising, item quality, value competitiveness, share of the pie, worldwide expansion, client benefit, client steadfastness, and worker benefits commitment. Each basic success element has a weight, and all of them additionally have a rating from one to four. A rating of one implies that element is a noteworthy shortcoming, two means a minor shortcoming, three means a minor quality and four means it is a major quality (Clark, 2007). The third determinant of whether the components are helpful to the organization is the score got by increasing the weight and rating of the component and scores are included in deciding the organization's aggregate weighted score. The addition of the aggregate weighted score gives Starbucks’ weight to different organizations in a similar industry.

The first basic achievement component is advertising that weighed 0.1. Each of the organizations in Starbucks’s industry has a similar weight for promoting. The rating for advertising for Starbucks is two, which makes it a minor shortcoming. To decide the score for promoting for Starbucks increase 0.1 and two together, which would make the score of publicizing 0.2. When promoting is contrasted with McDonald's, Caribou, and dunkin' it is underneath McDonalds and Dunkin', yet above Caribou.

Item Quality is the second basic success factor. The weight for item quality is 0.15 for the business. Starbucks has a rating of four for this variable. That implies that it is a noteworthy quality. Starbucks has a high item quality. The score for Starbucks in the item quality division is 0.6, above McDonalds and Dunkin', and it is equivalent to Caribou.

The third basic achievement considers at this industry is cost intensity. The heaviness of this element is 0.1 for the business. Value aggressiveness for Starbucks is evaluated two. This implies that value intensity for Starbucks is a minor shortcoming and its score is 0.2. The business ranges from 0.2 to 0.4 in value intensity, which puts Starbucks as the most reduced in this element.

Market share is another achievement element for Starbucks' industry. Starbucks’s piece of the pie is evaluated a four implying a major quality for Starbucks. The score is 0.8, higher than McDonalds, Dunkin’, and Caribou. The global expansion of Starbuck is 0.05. It is appraised a four, which implies a noteworthy quality. When contrasting the scores, Starbucks ties for first with McDonald's with a 0.2.

Another basic administration for Starbucks's industry is client faithfulness. Client dedication at Starbuck is evaluated three weighing 0.6. This implies client steadfastness is a minor quality for Starbucks. Caribou is the only organization in this industry that scores higher than Starbucks with a 0.8, Starbucks, and Dunkin' tie, while McDonald's comes in last with a 0.2.

The last basic administration figure for this industry is the representative advantages where Starbucks is position three, implying that it is a minor quality  with 0.05 alongside client dependability. It is second to Caribou with a 0.15. Starbucks scores are most astounding in aggregate weighted scores. Its score is 3.35 out of four. This implies out of each of the four of these organizations Starbucks is the most grounded in this industry. This can help Starbucks to push ahead with its competitive techniques so they can raise their scores significantly higher.

Starbucks Core Competencies

Core competencies are essential to the success of Starbucks in the long term. For Starbucks, it's competitive advantage is very impressive. Brand loyalty is the main competitive advantage for the company. Keeping customers desire and attention is very important for any business. The location is also critical for any business. With the relaxed store design and unique real estate selections, Starbucks store has much to offer, and most customer desires can be satisfied.

The Internal Factor Evaluation (IFE) Matrix is essential in carrying out an internal strategic-management audit by creating the weaknesses and strengths within the company (Clark, 2007). The IFE Matrix may assist Starbucks in eliminating and fixing some weaknesses. However, keeping the company’s strengths will be important in creating an edge or competitive advantage.

Starbucks core competencies

As mentioned in the IFE Matrix, the greatest strength of Starbucks is brand loyalty. The company commonly reinforces its consumer loyalty by opening new locations, creating new shop layouts and flavors. The IFE matrix shows that global expansion is one of Starbucks main strength. For Starbucks to be successful, it must focus on its competitive advantages. By overpricing, their prices could turn away their customers to competitors. The weaknesses depicted in the IFE Matrix that Starbucks only limits the sale of coffee to their location is a big problem. Selling different coffee flavors may target more customers while repositioning their brand.

The figure below is a visual illustration of Value Chain Analysis.

Starbucks value chain analysis model

The Value Chain Analysis is associated with the process, activity, and function of Starbucks Corporation.

Primary Activities

These include the following:

i.                                                                                                                                                                                  Inbound logistics- the company needs to have a way to maintain fresh coffee beans during the process of shipping to create quality products that give Starbucks a competitive advantage.

ii.                                                                                                                                                                                  Operations- this gives the company the way operations would be carried out to to make orders for customers using coffee beans from suppliers.

iii.                                                                                                                                                                                  Outbound logistics- This is the distribution of the company’s final products, which would involve selling frappuccino, coffee, and espresso to customers.

iv.                                                                                                                                                                                  Sales and Marketing- This is the weakest areas of the company’s competitive advantage. Brand loyalty has led to a continuous marketing effort due to the excellent brand awareness.

v.                                                                                                                                                                                  Service- This is reflected in the cooperative and friendliness characteristics of the company’s employees.

Support Activities

Starbucks corporation support activities include the following:

i.                                                                                                                                                                                  Procurement- Starbucks should have an efficient department to get the best and cheapest coffee at lower prices.

ii.                                                                                                                                                                                  Human resource- HR resources has become an essential part of attaining competitive advantage. Starbucks hires the right person to run their coffee stores.

iii.                                                                                                                                                                                  Technology- Technological development has helped Starbucks in providing solutions that have enabled their stores to run effectively.

Starbucks value chain is very effective in achieving the company’s success. Based on the coordination of the primary and secondary activities, the operation, service and marketing activities has enabled and supported cooperate technological development, human resource management, and corporate management planning activities. These activities support and aim at delivering good quality coffee products.


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