Its success stems from the fact that it was able to deliver an experience that revolutionised the way the world views coffee shops and how many of us drink coffee outside of our homes. Starbucks has created a space in between home and work where people can unwind, enjoy a cup of coffee, and take in the appealing atmosphere. Starbucks competes not with other coffee companies, but with going to the movies.
The following are the primary components of the company’s success formula:
1. Core Competence and Visions: The Company’s primary job or responsibility is to ensuring that the organisational culture is consistent with the types of individuals they want to attract and retain. Starbucks strives to instil a sense of belonging among its staff and consumers, as well as trust and faith in the company’s values. The quality of the coffee and the quality of the experience are what keep their consumers coming back, and the experience comes to life thanks to the personnel. Starbucks believes in a successful, competitive business approach aided by a strong commitment to the product. The Company’s good leadership and management strategy has resulted in the brand’s outstanding success and a clear vision of core competence. The company’s desire to create the most recognisable brand was fueled by a well-thought-out planning and positioning approach.
2. Promotional Patience: Starbucks has decided to avoid what would be considered standard marketing techniques, which is a departure from the norm. By depending on cafés to advertise themselves, a major reliance on a strong brand and word-of-mouth to spread a good reputation is unavoidable. Sutter (2003) also claims that effective positioning of the Starbucks environment uses powerful marketing techniques to create a setting that encourages individuals to study, hang out, and read.
3. Employee’s Approach: The Starbucks brand’s main retail success is defined by people’s interactions with the company’s experience, as well as the culture and values of how they connect with consumers. By investing in and cultivating a unique relationship with employees, and ensuring that they understand that the primary goal is to surpass the expectations of both employees and consumers. Starbucks employees are never treated as commodities, but rather as business partners.
4. Command of a Premium Brand: According to Hayes (1999), customers are prepared to pay higher costs for Starbucks coffee because they are not only purchasing a beverage, but also making a social statement. Consumers are purchasing an experience, a way of life, and a mindset. While these intangibles are notoriously difficult to quantify, Starbucks consumers are making it easy by flocking in massive numbers.
5. Experimentation and Innovation: Starbucks is a disciplined innovator, and one of the key reasons for the Company’s constant high levels of same-store sales is its effective management of its innovation timetable. In the store, customers can sample a variety of coffee brands. The Company’s capacity to quickly launch new activities and products is a significant competitive advantage. Customers are also becoming more interested in Starbucks’ music compilations, which are produced by Hear Music exclusively for the company. Starbucks aims to launch hi-tech cafés by the end of 2005, with bespoke music CDs in addition to high-speed Internet access (Ruggless,1997; Vishwanath and Harding, 2000; Donation, 2003).
6. Measured Expansion: While McDonald’s is known for its lightning-fast location evaluation and company setup, Starbucks has taken a more careful approach, particularly in international markets. Outlets in China have continuously risen from 8 in 1999 to just under 70 in 2004. Because of rising opportunities and its well-known global brand, the company is expanding into new markets.