Starbucks: Sources of Competitive Advantage

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Starbucks Sources of Competitive Advantage
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Key Questions

• Do you like Starbucks?
• Why do people buy Starbucks?
• What are people buying when they buy Starbucks?
• Is the company successful?
• What are key measures of success?
• What are Starbucks core resources? capabilities?
• What should Starbucks do?

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Products

• Coffee
• Made-for-you
• Make-it-yourself
• Bottled/canned
• Coffee-related Products
• Ice Cream
• Beer (Red Hook Stout)

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What is Starbucks?

• Coffee
• High quality
• Interesting blends/brews
• Consistent
• Coffee Drinking Experience
• Upscale, hip
• Consistent
• Place to be

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SBUX Stock Price
30
10
1997 1998 1999
2000 2001
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Keys to Success

• What are Starbucks strengths?
• Are they
• valuable?
• rare?
• inimitable?

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Value Chain of Firm Activities
Firm Infrastructure
Human Resource Management
MARGIN
Technological Development
Procurement
Service
Inbound Logistics
Marketing Sales
Outbound Logistics
Operations
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Resources and Capabilities

• Image, reputation
• Real estate
• Knows customer
• Participation in full industry value chain
• Inbound logistics, Sourcing
• Roasting, operations
• Outbound logistics, distribution
• Marketing
• Service

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External Analysis

• Opportunities

• Threats

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Strategic Recommendations

• Do XX
• Value chain activity a
• Value chain activity b
• Result
• Do YY
• Value chain activity a
• Value chain activity c
• Result