Starbucks Case Study

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Meru University College of Science and Technology (MUCST) *

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STRATEGIC

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Management

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Nov 24, 2024

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1 Starbucks Case Study Student Name: Institutional Affiliations: Date of Submission:

2 Question 1 The competitive advantage that Starbucks seeks to establish is through technological innovations. The company has implemented various technological advancements in its stores, such as mobile ordering and payment, digital menu boards, and automated espresso machines (Schrage et al., 2021). These innovations aim to improve the overall customer experience and increase efficiency and productivity in their stores. One of the main challenges that Starbucks faces in maintaining this competitive advantage is the constant need for updating and upgrading its technology (Schrage et al., 2021). As technology evolves, Starbucks must continue to innovate and incorporate the latest advancements to stay ahead of competitors. This can be costly and requires a significant investment of time and resources. Additionally, the success of these technological innovations relies heavily on the company's ability to train and educate their employees effectively. If employees are not properly trained on using and maintaining these technologies, it can lead to poor customer service and negatively impact the customer experience. Question 2 Starbucks possesses three capabilities: strong brand recognition, efficient supply chain management, and excellent customer service (Schrage et al., 2021). These capabilities have helped Starbucks establish itself as a leading brand in the coffee industry and differentiate itself from its competitors. Out of these capabilities, strong brand recognition can be considered a core competence for Starbucks. The company has built a strong brand image through quality products, customer service, and community involvement (Schrage et al., 2021). This brand image has helped Starbucks to attract and retain a loyal customer base, resulting in consistent sales and revenue.

3 Moreover, Starbucks has successfully expanded its brand globally, showcasing its ability to maintain its brand image and appeal to different markets. Efficient supply chain management can also be considered a core competence for Starbucks. The company has an extensive supply chain involving multiple suppliers, roasters, and distribution centers (Schrage et al., 2021). Despite this complexity, Starbucks has streamlined its supply chain and ensured a steady supply of high-quality coffee to its stores. This has helped Starbucks maintain its consistency in product quality and meet the demands of its customers. Excellent customer service is another core competence for Starbucks. The company strongly focuses on creating a welcoming and personalized customer experience. This is evident through its well-trained and friendly staff, customer loyalty program, and customized recommendations through its mobile app (Schrage et al., 2021). This focus on customer service has helped Starbucks build strong customer relationships and retain their loyalty, contributing to its competitive advantage. Question 3 To reach its mission, I recommend that Starbucks prioritize community involvement and social responsibility (Simpson et al., 2021). This can include expanding partnerships with local organizations and charities to support causes that align with the company's values. Additionally, Starbucks can implement sustainable and ethical sourcing practices to support local farmers and reduce environmental impact. Furthermore, Starbucks should focus on creating a personalized and meaningful experience for each customer (Simpson et al., 2021). This can be achieved through further utilization of technology, such as leveraging data to make personalized recommendations and

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4 creating a more seamless and convenient ordering process. Investing in employee training to ensure consistently excellent customer service will also contribute to fulfilling the company's mission of nurturing the human spirit. Question 4 As the new CEO of Starbucks, Kevin Johnson faces several key challenges in leading the company forward. One of the main challenges is addressing the company's recent financial struggles, which have been attributed to oversaturation in the market and changing consumer preferences (Simpson et al., 2021). Johnson will need to develop a strategic plan to revitalize the brand and attract new customers while retaining loyal ones. Another challenge for Johnson is maintaining the company's competitive advantage through technological innovations (Schrage et al., 2021). As mentioned earlier, constantly updating and upgrading technology is costly and time-consuming. Johnson must carefully prioritize and invest in the right technologies to enhance the customer experience and drive business outcomes. Additionally, he will need to ensure proper training and education for employees to use and maintain these technologies effectively. Failure to do so could result in losing the competitive edge that Starbucks has worked hard to establish.

5 References Schrage, P., Michael, B., Kiron, D., & David, D. (2021). Leadership’s digital transformation. Bonaparte, Y. L. (2020). A Starbucks Blend: Race, Social Marketing and Corporate Social Responsibility. Simpson, J., Kumar, P., Kemp, A., Awate, K., & Manning, K. (2020). 2.2 Vision, Mission, and Goals. Strategic Management . Schrage, P., Michael, B., Kiron, D., & David, D. (2021). Leadership’s digital transformation.

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