Starbucks differentiation strategy analysis

However, the company also uses product development and market development as secondary intensive growth strategies. On the other hand, a combination of intensive growth strategies influences the approach that Starbucks uses for growth and expansion.

Starbucks differentiation strategy analysis

A broken chain link illustrating poorly managed business' value chain. Definition Value chain analysis Starbucks differentiation strategy analysis is a process where a firm identifies its primary and support activities that add value to its final product and then analyze these activities to reduce costs or increase differentiation.

Analysis of Amazon's Corporate Strategy

Value chain represents the internal activities a firm engages in when transforming inputs into outputs. Understanding the tool Value chain analysis is a strategy tool used to analyze internal firm activities.

Its goal is to recognize, which activities are the most valuable i. The firm that competes through differentiation advantage will try to perform its activities better than competitors would do.

If it competes through cost advantage, it will try to perform internal activities at lower costs than competitors would do. When a company is capable of producing goods at lower costs than the market price or to provide superior products, it earns profits.

Porter introduced the generic value chain model in Value chain represents all the internal activities a firm engages in to produce goods and services.

VC is formed of primary activities that add value to the final product directly and support activities that add value indirectly. Although, primary activities add value directly to the production process, they are not necessarily more important than support activities.

Nowadays, competitive advantage mainly derives from technological improvements or innovations in business models or processes. On the other hand, primary activities are usually the source of cost advantage, where costs can be easily identified for each activity and properly managed.

The more activities a company undertakes compared to industry's VC, the more vertically integrated it is. Below you can find an industry's value chain and its relation to a firm level VC. Using the tool There are two different approaches on how to perform the analysis, which depend on what type of competitive advantage a company wants to create cost or differentiation advantage.

The table below lists all the steps needed to achieve cost or differentiation advantage using VCA. Competitive advantage types Cost advantage Differentiation advantage This approach is used when organizations try to compete on costs and want to understand the sources of their cost advantage or disadvantage and what factors drive those costs.

Case study on Starbucks Coffee - Assignment Point

Establish the relative importance of each activity in the total cost of the product. Identify cost drivers for each activity. Identify links between activities.Starbucks Differentiation Strategy Analysis. The next option is a broad differentiation strategy providing products or services that offer benefits different from those of competitors and that are widely valued by buyers.

The aim is to achieve competitive advantage by offering better products or services at the same price or enhancing margins by pricing slightly higher. Starbucks and Dunkin Donuts. Search this site. Home. Introduction. DEPEST Analysis. Theses generic strategies include the differentiation strategy, the cost leadership strategy, and the focus strategy.

While the cost and differentiation strategies are implemented industry wide, the focus strategy is only used for individual business. Oct 13,  · Despite the benefits, Starbucks opposes the strategy as it believes that the company’s value and culture are what continuously drive it forward, ahead of its peers.

Google’s homepage accessed through a MacBook Pro. Google uses the differentiation generic strategy (Porter’s model), along with the intensive growth strategies of market penetration, market development and product development.

Porter's generic strategies describe how a company pursues competitive advantage across its chosen market scope. There are three/four generic strategies, either lower cost, differentiated, or focus.A company chooses to pursue one of two types of competitive advantage, either via lower costs than its competition or by differentiating itself along dimensions valued by customers to command a.

Starbucks differentiation strategy analysis

Nokia was founded over years ago in Finland, and since then has become a global organisation that operates in over countries worldwide and a market leader in mobile telecommunications.

Porter's generic strategies - Wikipedia