Q1. ANALYSE STARBUCKS USING THE COMPETITIVE FORCE AND VALUE CHAIN MODELS.
Before the 2008 economic downturn Starbucks offers a unique experience, high-end speciality coffee and beverages, friendly and knowledgeable servers and customer friendly coffee shops. This was the winning formula for many years and enabled Starbucks to charge premium-prices.
During the economic downturn, customers complained that the company had lost its hip, local feel and had become more like a fast food chain. The company also realised that its profits had reduced, and there was a need for major changes. Starbucks had to use different business strategies simultaneously in order to remain at competitive level.
First, Starbucks revamped its in-store technology which sought to integrate its business processes with wireless technology and mobile digital platform. Starbucks engaged in the mobile digital platform when the company realized that over a third of its customers were smart phone owners. Knowing this, Starbucks implemented a technology that allows customers to pay using the smart phone application. This application allows regular customers to top up their Starbucks pre-paid cards and use them at any Starbucks branch to pay for their drinks by scanning the bar codes displayed on their phones. Using this application to pay was much faster than the traditional forms of payment.
Starbucks also pursued a more aggressive product differentiation strategy by emphasizing on high quality of their drinks, efficient and helpful customer services, at the same time focusing on reducing operational cost and eliminating inefficiency where ever possible.
Starbucks made a concerted effort to become more efficient, reduce waste, train baristas to reduce the amount of time spent on making a drink.
Streamlining business processing meant shorter customer wait, due to the reduction in time spent