1. What generic strategy is Starbucks following. Why?
2. Complete a Porters five forces for Starbucks.
3. What would your recommendations be for Starbucks in order to sustain growth.
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Starbucks had been using the strategy of differentiation to create its brand image. Since the foundation of the company, it has been built to provide highly quality premium and specialty coffee beans to the consumers. It was very stringent on the quality processes and it was clear that no form of artificial flavoring would be used to enhance the aroma of the coffee. This led to delivery of high quality coffee beans to the consumer and that created positive word-of-mouth advertisement for the company which led to the development of a strong brand image in the coffee industry. The commitment of the company to innovate on a consistent basis, in synchronization with the needs of the consumers, further enhanced the brand value of the company. All its outlets across the world are guided by the uniform goal of providing a delighting coffee experience and the company has been very particular about the process in which it had been serving its consumers. In order to ensure that the consumers got good aroma of the coffee when they entered any outlet, it had also discontinued some of its product lines as their aroma diluted the aroma of coffee. It had developed a vertically integrated organization in which the coffee beans were sourced, roasted and made as per the consumer needs and this control over the value chain helped it to provide high-quality products.
Starbucks had been using the strategy of large-scale differentiation since it has been targeting a large consumer market and at the same time, it has been developing different marketing mixes so that it can satisfy the varied needs of different consumer segments...