Starbucks' Strategic Choice and Evaluation
For an organization to be successful it must define itself. It must know its purpose for existing, identify what it does well, determine its customer value delivery, and develop strategies that afford a competitive advantage while delivering perceived value to the customer. Starbucks’ success is a fine example of an organization taking those steps in a successful progression.
Best Value Discipline
Organizations deliver superior customer value through one of three disciplines; operational excellence, customer intimacy, or product leadership (Pearce & Robinson, 2013). Starbucks focuses on the discipline of customer intimacy. Organizations that use the customer intimacy discipline excel in customer attention through tailoring service and products to individual customers. Starbucks does this by offering different coffee features. They offer three different sizes, several types of beverages (lattes, cappuccinos, espressos, smoothies), and various flavored syrups. Starbucks has even built several systems around customer data. Because customers provide information to Starbucks, the company uses that information to offer free drinks on birthdays and customer reward programs that make good on the customer intimacy concept (Bahel, 2009). Starbucks has taken the customer intimacy discipline another step. It does not just sell coffee products; it sells the Starbucks’ experience. The whole experience is about intimacy. Starbucks is about being in an environment where the customer can relax and reward themselves with an excellent beverage delivered with excellent customer service among friends in what many consider to be a home away from home, or as Starbucks has named it, the third place.
Michael Porter outlined three generic strategies that businesses follow. Those are the cost leadership strategy, the differentiation strategy, and the focus strategy. The cost leadership strategy can be used to...