According to chairman of the board, Howard Schultz, "You get more than the finest coffee when you visit a Starbucks-you get great people, first-rate music and a comfortable, upbeat meeting place." This is what the company calls "the Starbucks experience."
The impacts of globalisation, the influx of Internet commerce and intense competition in the market have dramatically influenced management in order to sustain the organisation's existence. The primary business objective of a firm has evolved into creating strategic and competitive advantage. Starbucks reinvented the traditional coffee shops and created a global brand because of its corporate strategies and competitive edge.
Strategic advantage is the product of synthesizing different learning of managers from sources such as personal insights, people's experiences and market research. Strategy is the plan that the organisation shall pursue in order to achieve the organisation's purpose. Developing a competitive strategy is developing a broad formula for how business operates and how it is going to compete. (Porter, 1980, p. xxvi) It includes the goals the organisation desired and policies needed to carry out those goals. However, the most successful strategies lie in the leader's vision (Mintzberg, 1994, p. 107).
It is the role of leadership to give purpose and meaningful direction to the company and to cause organisational effort in order to achieve that purpose (Jacobs & Jacques, 1990, p. 281). Successful leaders understand that strategy is not stagnant but instead it is dynamic and changing. Creating strategic advantage requires a leader's deep understanding of the company's strengths, weaknesses, its competitive strategy, and its current and potential customers. (Porter, 1985, p. 4)
Starbucks' mission is to "build customer loyalty around cappuccinos, lattes and other fancy beverages." Starbucks redesigned the coffee industry by shifting its focus from commodity coffee sales to the emotional atmosphere in which customers enjoy their coffee. Howard Schultz made it a point to visit his stores every week and talk with his employees. He spreads his unique gospel of how to run a business. He preaches his vision to as many people as possible in order to engage his employees to the strategies of the company. (Kim & Mauborgne, 2005, p. 74)
The management of Starbucks has invested a great deal of resources to know and understand their customers' perspective. The knowledge that they learned is transformed and utilised to provide services, products and communications. These business processes are long lasting and consistent. The management of Starbucks are aware that customers are the company's most valuable asset. They make it a point to consider the pulse of the customers in creating their strategies.
Starbucks create competitive advantage through a strategy of differentiation. The company offers coffee and fancy beverages, baked goods, and a unique experience that distinguishes them from other market players. Starbucks is good at making consumers feel special when they arrive at their regular Starbucks store because the barista knows the customer's preferred drink. Starbucks has an edge over their