Differentiation:

Starbucks Over the years, Starbucks has employed different but effective
strategies to establish itself as a leader in the coffee industry. It has done a
number of things to differentiate itself from its competitors. It has also
introduced products and services focused towards certain types of customers.
Innovation has been very important in helping Starbucks differentiate itself
from its competitors.

Starbucks goes as far as employing trained chefs and food scientists to

develop new products. The introduction of its Creme Frappuccino line of
drinks is one example of how Starbucks strives to stay fresh and innovative.
The infusion of Tazo tea drinks into its product line is further evidence of
Starbucks' desire to be viewed as different and unique. The Starbucks Card, a
sort of "fancy gift certificate," is another one of Starbucks' successful
innovations.
Not only has the purchasing tool become popular with its customers, it gives
Starbucks the opportunity to research trends in customers' coffee purchases.
It also helps establish brand loyalty from Starbucks' customers.

Starbucks has also reached out to target audiences using a differentiation

approach.
The rollout of Starbucks DoubleShot espresso drinks is their answer to the
energy drink trend. This product is aimed at a younger crowd, the same
consumers targeted by energy drinks such as Red Bull. Another group of
customers targeted by Starbucks are its more business-minded patrons.
As a result, Starbucks began offering high-speed Internet access available at
many of its stores. The service allows those with T-Mobile HotSpot access to
connect to the Internet inside Starbucks location without turning the store into
an Internet cafe.

Starbucks has enjoyed success not only in North America, but internationally
as well. Starbucks entered the international market by first establishing
locations in Japan.
The question as to why Starbucks entered the international market through
Japan is answered by chairman, Howard Schultz:
"...The maturity of the coffee market in Europe was very strong and was no
going to change much over the years. The Asian market was in its
developmental stage and we had an opportunity to position Starbucks as a
leader in a new industry..."
The advantage of this strategy is stated by Schultz. It gave Starbucks the
opportunity to become a leader in a new industry. This meant that Starbucks
would have very few competitors in doing so. Of course, the potential
disadvantage of this strategy is the fact that it is a new industry. There were
risks that the product would not be received well by the market. In fact, it was
known that coffee market was still in its growing stages in Asia. Still, the
decision was a smart one.
Japan became the launch pad for Starbucks' successful international
expansion.
The brand has become so popular in the Japanese market that, according to
Schultz, "thousands of people now carry Starbucks cups every day, in most
cases with the logo pointed out as proud customers." If Starbucks continues
to utilize its competitive advantages as well as it has in the past, then we
should expect to see continued success from the company.