From the Starbucks case, can you identify any organisational capabilities that
Starbucks has been able to develop through these experiences? How will these organisational capabilities
translate to core competencies that give Starbucks a sustainable competitive advantage in their industry? along with Harvard style referencing

Transcribed Image Text:Starbucks is not an ordinary purveyor of a cup of coffee. It is a large and innovative multinational firm that engages in major strategic actions to enter new international and product markets (e.g., acquisitions). It is a multibillion-dollar company with many stores operating in multiple countries. Starbucks set a goal to have at least 12500 stores in the USA by 2015, up from 11128 in 2012. Starbucks has become a major player in Asian markets, which is interesting because it took on a largely tea-drinking culture. Starbucks expected to have at least 1500 stores operating in China by 2015, a major increase over its 700 stores there in 2012. Starbucks adapts to localmarkettastes bydeveloping larger stores where, for example, the Chinese can lounge and meet with friends. It also has introduced flavours specifically for the Chinese market, such as red-bean frappuccinos. It has products that cater to tea drinkers as well. Starbucks' success in China is reflected by the fact that China was expected to quickly become the company's second-largest market. The average annual single store sales in China increased by almost 75 per cent from 2008 to US$886 000 Its experience in Europe has been more mixed. It has had some success but has also encountered another different set of coffee cultures. At first, it tried to have Europeans adapt to the Starbucks approach, but failed. Now, because of the importance Starbucks places on its future in Europe, the company is adapting to the European café culture. This means that Starbucks is building larger, stores with additional seating to allow people to meet and spend time in their stores, as they have done in Asia. It has implemented other practices and products that adapt even more to local (countryl cultures and tastes (e.g., France, England). In addition to Starbucks international thrust, it also engages in significant innovation and strategic actions to add to its product line. In recent years, it has introduced Via, an instant coffee, and a single-cup coffee maker (named the Verismo) that allows customers to make their own lattes at home. Another attempt to add to its product line was evidenced by its acquisition of the tea chain Teavana. In fact, it paid US$620 million to acquire the Atlanta-based company. In recent times it also acquired a juice maker, Evolution Fresh, and Bay Bread, the operator of La Boulange bakeries. at the end of 2012. Starbucks has also entered Vietnam and India with high expectations. In 2013 it opened its first store in Vietnam. Interestingly, Vietnam is the second-largest producer of coffee beans in the world behind only Brazil. Starbucks hopes to work with local Vietnamese farmers to grow a high-quality Arabica coffee bean. In partnership with the Tata Group, Starbucks also opened its first stores in India, with plans to expand rapidly there. In contrast, in Austratia the scorecard has been extremely poor. Business Insider referred to its efforts in the country as a 'huge flop'. Starbucks entered the market hard in 2000 and had 84 stores at its peak. The problems were obvious from the start. The firm charged more than competitors, had stores in low-traffic locations and, basically, the well-established coffee culture of Australia was better than the Starbucks offerings. Melbourne-style coffee is arguably the world's best and Starbucks could not compete on taste. The final 24 stores were sold to the holders of the 7-11 stores. Sources: J. Gertner, 2013, For infusing a steady stream of new ideas to revive its business, Fast Company, http://www.fastcompany.com; A. Gasparro, 2013, Starbucks enjoys sales jolt from its U.S., China stores, Wall Street Journal, http://www.wsj.com, 24 January: J. Noble, 2013, Starbucks takes on Vietnam coffee culture, Financial Times, http://www.ft.com, 3 January: A. Gasparro, 2012, Starbucks: China to become no. 2 market, Wall Street Journal, http://www.wsj.com, 6 December; 2012, A look at Starbucks' U.S. presence aver the years, Bloomberg Businessweek, http:l/www.businessweek.com, 5 December; L. Burkitt, 2012, Starbucks plays to local Chinese tastes, Wall Street Journal, http://www.wsj.com, 26 November; J. Jargon, 2012, Starbucks CEO: We will do for tea what we did for caffee", Wall Street Journal, http://www.wsj.com, 14 Navember; V. Bajaj. 2012, Starbucks opens in India with pomp and tempered ambition, New York Times, http://www.nytimes.com, 19 October; S. Strom, 2012, Starbucks to introduce single-serve coffee maker, New York Times, http://www.nytimes.com. 20 September; L. Alderman, 2012, In Europe, Starbucks adjusts to a café culture, New York Times, http://www.nytimes.com, 30 March.

Question

From the Starbucks case, can you identify any organisational capabilities that
Starbucks has been able to develop through these experiences? How will these organisational capabilities
translate to core competencies that give Starbucks a sustainable competitive advantage in their industry? along with Harvard style referencing

Starbucks is not an ordinary purveyor of a cup of coffee. It is a large
and innovative multinational firm that engages in major strategic
actions to enter new international and product markets (e.g.,
acquisitions). It is a multibillion-dollar company with many stores
operating in multiple countries. Starbucks set a goal to have at
least 12500 stores in the USA by 2015, up from 11128 in 2012.
Starbucks has become a major player in Asian markets, which
is interesting because it took on a largely tea-drinking culture.
Starbucks expected to have at least 1500 stores operating in
China by 2015, a major increase over its 700 stores there in 2012.
Starbucks adapts to localmarkettastes bydeveloping larger stores
where, for example, the Chinese can lounge and meet with friends.
It also has introduced flavours specifically for the Chinese market,
such as red-bean frappuccinos. It has products that cater to tea
drinkers as well. Starbucks' success in China is reflected by the
fact that China was expected to quickly become the company's
second-largest market. The average annual single store sales in
China increased by almost 75 per cent from 2008 to US$886 000
Its experience in Europe has been more mixed. It has had
some success but has also encountered another different set of
coffee cultures. At first, it tried to have Europeans adapt to the
Starbucks approach, but failed. Now, because of the importance
Starbucks places on its future in Europe, the company is adapting
to the European café culture. This means that Starbucks is
building larger, stores with additional seating to allow people to
meet and spend time in their stores, as they have done in Asia.
It has implemented other practices and products that adapt even
more to local (countryl cultures and tastes (e.g., France, England).
In addition to Starbucks international thrust, it also
engages in significant innovation and strategic actions to
add to its product line. In recent years, it has introduced Via,
an instant coffee, and a single-cup coffee maker (named the
Verismo) that allows customers to make their own lattes at
home. Another attempt to add to its product line was evidenced
by its acquisition of the tea chain Teavana. In fact, it paid US$620
million to acquire the Atlanta-based company. In recent times it
also acquired a juice maker, Evolution Fresh, and Bay Bread, the
operator of La Boulange bakeries.
at the end of 2012.
Starbucks has also entered Vietnam and India with high
expectations. In 2013 it opened its first store in Vietnam.
Interestingly, Vietnam is the second-largest producer of coffee
beans in the world behind only Brazil. Starbucks hopes to work
with local Vietnamese farmers to grow a high-quality Arabica
coffee bean. In partnership with the Tata Group, Starbucks also
opened its first stores in India, with plans to expand rapidly there.
In contrast, in Austratia the scorecard has been extremely
poor. Business Insider referred to its efforts in the country as
a 'huge flop'. Starbucks entered the market hard in 2000 and
had 84 stores at its peak. The problems were obvious from the
start. The firm charged more than competitors, had stores in
low-traffic locations and, basically, the well-established coffee
culture of Australia was better than the Starbucks offerings.
Melbourne-style coffee is arguably the world's best and
Starbucks could not compete on taste. The final 24 stores were
sold to the holders of the 7-11 stores.
Sources: J. Gertner, 2013, For infusing a steady stream of new ideas to revive
its business, Fast Company, http://www.fastcompany.com; A. Gasparro, 2013,
Starbucks enjoys sales jolt from its U.S., China stores, Wall Street Journal,
http://www.wsj.com, 24 January: J. Noble, 2013, Starbucks takes on Vietnam
coffee culture, Financial Times, http://www.ft.com, 3 January: A. Gasparro,
2012, Starbucks: China to become no. 2 market, Wall Street Journal,
http://www.wsj.com, 6 December; 2012, A look at Starbucks' U.S. presence
aver the years, Bloomberg Businessweek, http:l/www.businessweek.com,
5 December; L. Burkitt, 2012, Starbucks plays to local Chinese tastes,
Wall Street Journal, http://www.wsj.com, 26 November; J. Jargon, 2012,
Starbucks CEO: We will do for tea what we did for caffee", Wall Street Journal,
http://www.wsj.com, 14 Navember; V. Bajaj. 2012, Starbucks opens in India
with pomp and tempered ambition, New York Times, http://www.nytimes.com,
19 October; S. Strom, 2012, Starbucks to introduce single-serve coffee maker,
New York Times, http://www.nytimes.com. 20 September; L. Alderman,
2012, In Europe, Starbucks adjusts to a café culture, New York Times,
http://www.nytimes.com, 30 March.

Accepted Answer

Starbucks is the leading coffee brand of the world. It has an extensive global presence. The brand…

How will these organisational capabilities translate to core competencies that give Starbucks a sustainable competitive advantage in their industry? along with Harvard style referencing