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Case Discussion Questions

1. What functional strategies at Starbucks help the company achieve superior financial performance?

2. Identify the resources, capabilities, and distinctive competencies of Starbucks.

Answer :

Final answer:

Starbucks' superior financial performance is supported by its focus on employee engagement, premium brand positioning, and diverse product offerings. The company's strong brand equity, efficient supply chain, and inclusive culture are its critical resources and distinctive competencies. Together, these elements enable Starbucks to maintain a competitive edge in the coffee industry.


Explanation:

Functional Strategies at Starbucks

Starbucks employs several functional strategies that significantly contribute to its superior financial performance. These strategies include:

  1. Employee Engagement and Training: Starbucks invests heavily in the training and development of its employees, known as partners. This investment not only enhances customer service but also increases employee satisfaction and retention, reducing turnover costs.
  2. Brand Positioning: Starbucks positions itself as a premium coffee brand, which allows it to charge higher prices. The company creates an experience, often referred to as the "third place" between home and work, enhancing customer loyalty.
  3. Product Diversification: By providing a wide range of product offerings, including seasonal drinks and food items, Starbucks appeals to a broad customer base and encourages repeat visits.

Resources, Capabilities, and Distinctive Competencies

Starbucks possesses numerous resources, capabilities, and distinctive competencies that set it apart in the coffee industry:

  1. Brand Equity: Starbucks has cultivated a strong brand that is recognized and respected globally.
  2. Supply Chain Management: The company has an efficient supply chain that ensures the availability of high-quality coffee beans, which is critical for maintaining product standards.
  3. Cultural Focus: Starbucks emphasizes a culture of inclusiveness and respect that drives employee performance and customer satisfaction, as shown by its consistent ranking as one of the best companies to work for.

In conclusion, Starbucks' focus on employee training, brand positioning, and product diversification leads to superior financial performance, while its strong brand equity, supply chain management, and corporate culture represent its key resources and competencies.


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