What is the definition of competitive advantage? According to Enz (2010), the competitive advantage is exists when a firm has a long-lasting business advantaged compared to rival firms that is a significant edge over the competition. In the other words, the firms will do something competitors cannot do. Starbucks apply many competitive advantages in the Chinese market such as strong brand name recognition, large retail distribution system, quality product, extensive product list, good supplier relationships, strong financial history and strong human resources.
The first point is brand name recognition. Starbucks is a well-known branding of coffee product company. According to Venkatraman and Nelson (2008), Starbucks is an iconic emotional brand. These emotional brands become meaningful in part because they become interwove with the narratives of people’s lives. Starbucks create their brand name with offer good environment of store’s which is captured by four themes such as “Starbucks as Home;” “Starbucks as a Constellation of Personal Spaces;” “Starbucks as Exotic;” and “Starbucks as a Bridge between Cultures” (Venkatraman & Nelson, 2008). These entire themes will create good brand name within the customers.
The second point is large retail distribution system. Nowadays, Starbuck is one of the companies that expand their business to the other country such as in
It becomes the first mover in the coffee business in China market. This situation will
create competitive advantage for Starbucks because they were the first company
that successful for enter the coffee business market in the China . The large retail
distribution system also helps Starbucks increase their revenue and profit.
They do the franchising their company to the other country over the world. China
The third point is quality of product. All of products that Starbucks offer to the customer have high quality of item. Starbucks establish their own Total Quality Management System in order to provide and control the quality of product that they sell to the customer. They also have corporate headquarters that exercises controls over individual sites. Other than that, they also have internal controls for the store that is managing by the manager.
The fourth point is extensive product list. This is one of the competitive advantage of Starbucks because the product that they produce is always be consumed by the customer. This is because the demand for food and beverages is constant. Therefore, the extensive product list of Starbuck will help them to compete with other company that in the same business.
The next point is good supplier relationship. This is important to Starbucks in order to produce their product. Starbucks is one of company that cooperates with the other company in order to receive raw material for their products. They have lack of their own coffee farms. Therefore, to ensure that all the raw materials for their production are being supply, they build good relationship with their supplier. Therefore, this will overcome their problem.
Besides that, Starbucks also is a company who has strong financial company. This is because Starbucks was starts operated in many years ago and has good financial management and strategies. They will achieve strong financial in company because they have largest market share in the industry. They also expand their business to the other country and do joint venture with local business partners to help recruit talented individuals and maintain financial control.
The last point is strong human resources who is the employee and staff that working in their company has good skills such as production skills, marketing skills, managerial skills and others. The most important skills in Starbucks is people skills and drink preparation ability. In order to maintain and control the quality that product that they produce, all the employees will give training to learn about products, brewing methods and sales techniques. They also giving rewards to their staff in order to encourage them work in a good performance.
As a conclusion, there are many competitive advantage that Starbucks have for competed with other company. Nevertheless, the most important things are they must have a good missions and visions of their company that lead them to achieved good performance in business. They also must create positive value with their customer to ensure that customer will loyal with their products.