Competitive assessment

Competitive Advantages
Excellent customer service is one source of Starbucks’ competitive advantage. Starbucks’
emphasis on ensuring a positive customer experience has allowed it to become one of the leading
firms in the coffee industry. Meanwhile, Starbucks has also managed to pursue ground-breaking
and sustainable sourcing and production initiatives. The coffee chain achieves uniqueness
inclined to technological breakthroughs via assimilating technology into a wide range of business
processes and procedures such as new product development, communication of the marketing
message, completing sales and monitoring the level of customer satisfaction. Its stores are
effectively positioned as a “third place” away from home and work, where people can spend time
in a relaxed and comfortable environment with their friends or alone. Starbucks has always
maintained its competitive advantage by being the leader in product innovation

The Competitive Profile Matrix (CPM) uses the major internal strengths and weaknesses and
compares them to the major competitors in the industry. According to this matrix, Starbucks is
more competitive in the market than it’s competitors.

1. Weakness of CPM

CRITICAL SUCCESS FACTORS ratings are subjectively assigned a rating between 1 and 4,
and non- uniformity may occur due to weights being assigned subjectively by the evaluators.
The total weighted scores obtained for each company reveal relative strengths or
weaknesses of the companies but are not to be implied as precise in nature.

2. Starbucks Competition McDonald’s launched its Mc Cafe campaign in which it sells premium
specialty coffee beverages at a slight discount to Starbucks’. McDonalds has an excellent
platform from which to compete as it already has so many stores in prominent locations with
drive-thru windows.

3.  Starbucks Competition Dunkin' Donuts, uses its donuts and the rest of its menu as the draw.
The customer can choose between a coffee or a coffee and a donut
3) Identification of main competitors:
Different direct competitors of Starbucks are the Costa coffee, Café coffee day, Dunkin Donuts,
McDonalds McCafe in the US. Different indirect customers of Starbucks are the McDonalds,
independent fast food bakeries as well as chains.

The main reason behind the competitive advantage of Starbucks is selling the coffee that is of
high quality. It has been observed that the business strategy of Starbucks is offering quality
coffee in the premium pricing strategy and offering huge product differentiation for the
customers so that it can attract a number of customers

It is observed that Starbucks stores positioned them as one the third place that is away from the
work and home that makes people spends a huge amount of money in the comfortable as well as
a relaxed environment with their families and friends. For offering an effective services to the
customer, Starbucks effectively offers free Wi-Fi and all of the stores of Starbucks are
effectively designed to make the customers in staying for a longer period so that the profitability
of the company can be effectively increased

Along with that, Starbucks also integrates their technology in different parts of the business
processes so that the operations of the company can be effectively developed and the
organization can achieve a better competitive advantage (Starbucks Coffee Company, 2018).
Starbucks mainly applies the technology in the development of new products, communication of
the marketing message through an effective medium as well as monitoring the effective level of
customer satisfaction so that it can satisfy the customers with more efficiency. Starbucks has
launched the free order along with the online pay feature that allows the customers in buying the
coffee with more efficiency (Meyer et al. 2017). Along with that, launching the app for the voice
order can also improve the operation of the organization and attracts the tech-savvy customers
towards the organization so that it can help the organization in achieving the sustainable
competitive advantage.

Starbucks also offers an effective reward card that also offers a better benefit to the customers
and attracts a number of customers for achieving competitive advantage (Starbucks Coffee
Company, 2018). For building the loyalty among customers, Starbucks effectively launch the
survey for the customer to understand the thoughts of the customers regarding their experiences
in Starbucks so that they can understand the need of customers. Therefore, they can implement a
better loyalty scheme to satisfy the customers and develops a better and long-term relationship
with the customers (Wheelen et al. 2017).
The other main reason for the competitive advantage of Starbucks is their finest quality coffee
beans because Starbucks mainly purchases the coffee beans that are organic in nature. Starbucks
develops the unique taste in their coffee with the help of the Mastrena that is one of the powerful
espresso machines to develop a familiar taste in the coffee. This unique taste of the coffee in the
Starbucks can effectively attract a number of customers towards the organization.’

4) Graph the main competitors and were Starbucks on market graph:

It has been observed that the Costa coffee is the second largest coffeehouse after the Starbucks
and they have 3000 stores in more than 30 countries. The net income of the Costa coffee has
been increased to $200 million (Owler, 2018).

McCafe:

McCafe has their branch in the 4500 number of outlets, and the organization has more than $1.4
billion in worldwide basis, and they belong to three first coffee based organizations.

Café coffee day:

It has been observed that Café coffee day has 1500 number of outlets in most than 28 number of
countries. It has been found that there are 160 million dollars in the organizations (Owler, 2018).

McDonald's:

It has been observed that McDonald's is not only one of the coffee-related brand but they are also
one of the organisations that sell fast food to the customers. It has been observed that there is
3700 number of outlets in the entire world. The net income of McDonald's is $22 million (Owler,
2018).

5) Strategic groups:
According to Hill (2017), the strategic group refers to the strategic management concept that is
effective in grouping an organization within a particular industry that has the similar models of
business or some similar combination of various strategies. Therefore, the strategic group
analysis is associated with the identification of the organization with the same types of vital
characteristics (Starbucks Coffee Company, 2018). Thus, a different strategic group for the
Starbucks is the home delivery and the purchasing products in the store. In the case of the home
delivery products, the customer buys products online so that they can get the product from their
home
Strategic Group analysis 

The strategic group implementation of Starbucks has associated corporate social responsibilities
hugely. The primary aim of Starbucks is given to the betterment and well being of the customers,
and therefore, ethics has integrated more into the business procedure of Starbucks than profit
orientation. According to Taecharungroj (2017), the products and services of a company play in
an important role, and that is why Schultz has paid special emphasis to products and services of
the company. Primarily, the company used to provide packaged coffee only. However, with the
advent of time, the company also developed the aim of engaging the customers more and
therefore, it decided to provide coffee products as well along with experience and ambiance.
Moreover, as influenced by Stead and Stead (2014), the company also integrated the accessibility
of customers as one of its strategies. The company has over 2000 stores all across the US, and
the stores are not confined to the important regions of the country only. The company has also
opened stores in airports and all the major highways. This would ensure that the company is
reachable by people at every possible place, even in places where no other food company is
present. In addition to that, the company has aimed to provide satisfaction to the customers as
well. As opined by Snell et al. (2017), one of the issues that the company faces from the
customers is the refraining of the middle and lower income group people due to high prices of
the products. However, in order to eradicate this financial issue of the customers, the company
has initiated various vouchers and discounts to the customers, with the help of which the
customers shall be able to avail discounts on the products they buy from Starbucks. Moreover,
the diversification strategy of the company is the initiation of new products such as Teavana and
bay bread for each of the sectors in the market (Schwartz, 2017).