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Starbucks Coffee is a brand that is known for its broad competitive advantage and uses a generic strategy of broad differentiation to trade successfully. This strategy assumes that the business of a certain company and its products will be different from other companies in this segment. Thus, the value proposition of Starbucks Coffees is that the chain of coffee houses offers visitors a high-quality product and their unique presentation. The brands emphasis is on offering the brands specialty coffee drinks that dont exist in other similar establishments (Hills et al., 2014). At the same time, the company has a stable and broad sourcing policy for its products to better differentiate its brand from competitors.
To manage competition and manage entry, Starbucks could use the Arrow Model as an endogenous strategy. This is because this approach assumes a model of change in practice as a way of explaining economic change. The companys staff undergoes lengthy training, which can be significantly reduced by issuing printed material and a parallel explanation about the product during its direct preparation. Moreover, the strategy considers innovations within the company and their technological advantage. With high-quality devices, Starbucks can successfully apply the endogenous theory. Additionally, labor costs will be reduced through direct hands-on training. At the same time, the company should remember that there are managed entry and blockaded entry. The difference between them is that managed entry is an agreement between firms and service payers. The blockaded entry is a period of restricted entry to the market, even if there are no strategic actions coming from incumbent firms.
To enter the global market, I would recommend Starbucks to use The Cost Focus Strategy. This approach focuses on a niche market within the industry and can become a leading service provider and expert in the field. Thus, the company can provide unique and high-quality products on a global scale. At the same time, franchising can be advised as an entry model. Then Starbucks will be able to license the use of its brand and products to a third-party company, receiving a profit for this.
Reference
Hill, C. W. L., Jones, G. R., & Schilling, M. A. (2014). Strategic Management: Theory: An Integrated Approach. Cengage Learning.
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