Starbucks Core Competencies

Resources and Capabilities

 Tangible

i. Physical: Stores, Distribution Centers and Warehouses ii. Financial: Investments, Expansion activities, Joint Ventures, Licensed agreements and Merchandise

 Intangible

i. Technology: State of the art equipment, highly integrated and advanced information technology ecosystem, mobile and online store ii. Reputation: Strong brand reputation, cult status of Starbucks, strong Association of outlets as “third place” right after home and work, excellent relationship with coffee suppliers

 Human Resources

 Well trained employees, dedicated Real Estate team, innovative R&D team, relatively low employee attrition

 Personalized interaction with

For instance, Starbucks has established unique projects such as Starbucks Card and Starbucks Reward which strengthen the company’s relationship with its consumers through customer satisfaction and loyalty.

Core competencies of Starbucks and their Competitive Advantage

Aesthetic appeal, Customer experience and Cult status: The “Starbucks Third Place Experience” serves as a competitive advantage for the company. This experience is characterized by quality customer service and store ambience that reflects the culture of the communities where it operates. This culture based ambience is believed to have strong contribution to cult following and customer loyalty.

Global brand recognition and equity: Starbucks is the most recognized brand in the coffeehouse segment and ranks 64th of the Interbrand / Business Week list of the top 100 global brands. It effectively leverages its rich brand equity by merchandising its products and licensing its brand. Its immense brand value also allowed for successful tie-ups with leading retail chains for its branded foods and beverages. The brand is so widely-recognizable that the company dropped the words "Starbucks Coffee" from the logo without fear of losing its

Central distribution centers make more than 70,000 deliveries per week to Starbucks 25085 stores located in 75 countries.

Starbucks is also exploring opportunities to grow its own coffee. Such a shift in the sourcing of products can increase the effectiveness of new product development initiatives for the business as the company will have a chance of experimenting with developing new sorts of coffee.

Strategic relationships with suppliers is one of the main sources of value for Starbucks inbound logistics. The company operates farmer support centers staffed with agronomists and sustainability experts who work with coffee farming communities to promote best practices in coffee production designed to improve both coffee quality and yields.

Starbucks Operations

Starbucks operates in 75 countries and there are two store formats:

1. Company-operated stores. They enable the management to observe shifts in consumer tastes and preferences and collect information about market tendencies in a direct manner. By the end of fiscal year 2016 they accounted for about 51% of total numbers of stores. Company-operated stores generated 79% of Starbucks