What type of strategy does starbucks use

From the very beginning, the experiential aspect of the brand has been consistently and effectively implemented in all its stores across the world. In addition, Starbucks has also built its brand on things that tend to be out of the box, by consistently defying conventional wisdom. When companies were aggressively advertising, Starbucks decided not to advertise.

When cost cutting was the dominant paradigm of the industry, Starbucks chose to emphasize non-routine procedures to create excitement among the baristas instead of streamlining procedures to minimize cost. Unlike most other companies, Starbucks made its employees its partners, by offering them stock options and health insurance.

Going against rigorous and complex customer surveys, Starbucks chose casual and informal chats with customers to capture overall mood, understand experience with the store and gather valuable feedback. It is not that Starbucks does not conduct quantitative market research. It has in fact successfully used research findings to shape its market entry strategies in many countries.

The key aspect to highlight here is the fact that the organisation does not have a rigid, compartmentalized view of understanding customers.

These clever and innovative ways of understanding its customers has enabled Starbucks to build an iconic global brand that has resonated with customers across the world for almost 50 years now.

An interesting piece of research conducted in using neuroscience research techniques in Germany suggested that customers would be willing to pay more for a Starbucks coffee, if the brand decides to charge it. Because neuroscience research looks at changes in brain activity when exposed to brands and price points, the results were considered more believable than traditional market research. The real-world evidence of this power in the mind for the brand is the popularity level it enjoys even though the pricing is higher than many of its competitors.

Large numbers that once captivated me — 40, stores — are not what matter. One cup. One customer. One partner. The company operates with a strong sense of attention towards details, and replicating a consistent customer experience across all its stores and its products is a critical focus area. This includes responsible purchasing practices, including supporting farmer loans and forest conservation programs; as well as creating opportunities through education, training and employment. Starbucks also initiates many programs to reduce its environmental footprint through energy and water conservation, recycling and green construction.

In its latest letter to shareholders, it has announced its aspiration to be resource positive — storing more carbon than the company emits, eliminating waste, and providing more clean freshwater than it uses.

It plans to do this through:. These are examples of consistency, attention to detail and a strong customer orientation in practice.

Branding has been one of the pivotal elements of Starbucks strategy over many years. The company has invested significantly in creating a standardised look and feel of its stores, merchandise and food and drinks. The Starbucks Siren logo is one of the most recognisable logos in the world. The global expansion strategy has a key objective of recreating the Starbucks experience in every new country the company enters.

This essentially results in a similar kind of experience in its stores, whether it is located in New York, New Mexico, Moscow, Tokyo or Shanghai. The brand strategy, as mentioned before, focuses in detail on the experience the store creates. In the United States, where the company estimates that majority of its stores will become drive through, it has embraced stunningly appealing design principles to create stores out of unused shipping containers.

Interiors of stores are continuously spruced up through clever and artistically appealing ways of using definite materials, lighting arrangements etc. In its international stores, the strategy is around localising some of the store elements but still staying true to the Starbucks experience.

This logo is in use till date and is one of the most visual and recognisable elements of the company. The company operates a website called ideas. The brand has a sizable social media and digital presence, which has received renewed focus in recent years. This has been driven by the need to better engage with customers and also be visible on platforms where target or future customers spend time online.

In , Starbucks collaborated with Duracell Powermat to roll out wireless charging in its UK stores, thereby adding to the customer experience and bringing digital innovation into its stores. The brand invests heavily and believes strongly in mobile marketing. It has embraced digital innovation by developing and rolling out a Starbucks app for paying for products, tipping baristas, earning and redeeming rewards.

In April , it responded to customer feedback and tweaked the Rewards program mechanics to enable occasional customers to redeem their stars more quickly for beverages. Besides its success in using technologies like QR codes, coupon downloads and virtual gift cards in its promotional campaigns, Starbucks has leveraged on Artificial Intelligence to allow customers to place their orders via voice command or messaging interface through the mobile app.

The Starbucks Siren and its iconic green is synonymous with its quality coffee beverages and relaxing coffeehouse experience all over the world. Through its refreshed design principles which emphasizes legibility and clear communication, as well as expressiveness and emotion, the brand demonstrates its unwaveringly clear and consistent positioning. A brand campaign has the purpose of developing a brand with the aid of communication.

The campaign chronicles a day in the life of Starbucks through a mini-documentary format. The campaign was shot in 59 different stores located in 28 different countries, using 39 local filmmakers, 10 local photographers and one director coordinating all the people involved. Starbucks is not a stranger to brand and marketing campaigns and has spent significant amounts of money in various campaigns. During the low growth phase of the company in , it invested around USD million on campaigns.

The first global brand campaign in is a deviation from its existing brand promotion and communication strategy, where the focus has always been on its products.

But the key thing to note is that the campaign still focuses on the customer experience, which is a direct link with the core values and philosophy.

The taste and quality offered by Starbucks are nearly irreplaceable and that is why customers are willing to pay extra for better quality. This business model has proved profitable which is clear from the rising revenues of Starbucks. While the Americas account for the largest part of its net revenues and income, the brand has been able to find faster growth in CAP China and the Asia Pacific.

Its profits have also continued to rise because of the continuous drop in the wholesale prices of coffee Investopedia. Part of the credit goes to its well-managed supply chain and sourcing strategy. Moreover, its customers do not mind paying the premium prices for what the company offers. The Arabica coffee that the company sources is different from the normal Arabica and Starbucks is also very picky about its beans.

Experts taste thousands of cups daily to ensure maximum flavor and highest satisfaction from coffee. So, if you can ensure the highest quality in the industry, you can expect your customers to be willing to pay more. Starbucks has clearly set standards much above the normal and the results are simply great.

Whether a regular customer or not, people still appreciate its quality and flavors. To understand the culture at Starbucks, you must understand its shared values which Starbucks has defined as follows:. Acting with courage, challenging the status quo and finding new ways to grow our company and each other. Starbucks mission and values. In these words, Starbucks has explained some of the most important traits that define its culture.

Customers are at the core of its culture and with the level of dedication to customer service visible at Starbucks, one can easily know it is a customer-centric culture.

Some other critical traits that define Starbucks culture include inclusion, transparency, courage, dignity, respect, integrity and accountability. It is not just about the customers, but the culture at Starbucks is meant to make its employees whom it calls partners feel included.

A strong culture is essential for many reasons. A strong culture and shared values keep the entire organization together and help create an environment of trust. It increases the efficiency of the organization and also gives it the strength to take new challenges. Successful organizations work as large teams with a strong central culture that is all-pervasive. It brings accountability and on top of all, it brings unity which is critical for being competitive and taking bigger challenges.

A strong culture has some other great benefits too. Sometimes, it is the best tool to form strong customer connections. The company is also great in terms of work culture. Well, it is also true that Starbucks derives much of its strength from its employees. To ensure that its employees are satisfied and can deliver their best performance, it has provided them an excellent work environment.

Mark Henricks notes in his article for Entrepreneur that the Starbucks story is endlessly fascinating. A large and smart enterprise cannot be run only with a good business strategy but you also need to mind your ethics.

Starbucks has shown great performance n this area and the brand has come to be recognized for its efforts in managing its supply chain ethically. A few decades ago when environmental activists were making much fuss about Starbucks exploiting its third world suppliers, the brand took it as a challenge. It started a pilot program aimed to ensure ethical and sustainable sourcing.

The program selected only the farmers suppliers who suited the criteria set by Starbucks. These farmers were required to have a good reputation in several areas from product quality to environmental impact and labor.

While this has ensured the supply of good quality raw material over all these years, it also made sure that all the raw material the company sourced was bought ethically. Moreover, the farmers that perform best in terms of these criteria are paid extra for their beans.

Starbucks business strategy can be classified as product differentiation. Accordingly, the coffee chain giant focuses on the quality of its products and customers pay premium prices for high quality.

Excellent customer services as one of the solid sources of Starbucks competitive advantage further increases the attractiveness of the coffee retailer. International market expansion with the focus on emerging economies is one of the key elements of Starbucks business strategy on long-term perspective.